Water treatment and reuse bill passes its first committee, despite concerns

A water treatment and reuse proposal is moving forward with some changes after more than five hours of discussion in the Roundhouse.

The legislation passed its first committee by a vote of 5-4 on Tuesday, likely a preview of the tough battle it has ahead to get through the rest of the Legislature.

Rep. Angelica Rubio, D-Las Cruces, joined Republicans in voting against the bill, and other Democrats on the committee said they’re still uncertain about the measure as it stands. With two more committee assignments before getting to the floor, it’s a long journey for House Bill 137.

The legislation would allow the state to enter into contracts and award grants for projects using treated brackish or produced water, a way to incentivize businesses to participate in the market. It would also impose a 3 cent tax on each barrel of produced water from oil and gas wells, unless the water is reused for drilling or at a state-permitted reuse facility. Four to seven times more produced water comes out of the ground than oil when drilling, according to the New Mexico Environment Department.

The bill, which moved forward through the committee as a substitute of the initial legislation, lowered the fee on produced water barrels, which was formerly 5 cents per barrel.

HB137 also comes with a $75 million appropriation ask. It’s significantly less than proponents sought last year, when the proposal failed twice.

It’s rare to see oil and gas industry representatives and environmental advocates fighting on the same side, but the strategic water supply proposal has created a united front of sorts for the lobbyists. Some have different reasons for opposing the bill, including disagreement over the tax on oil and gas operators or concern over the safety of treated and reused water.

Gov. Michelle Lujan Grisham, after the bill passed the committee, said in a statement this is a way to support clean energy and advanced manufacturing “without putting our freshwater supplies at risk.”

“I look forward to continued work with the Legislature to advance the bill and secure the needed funding for the program,” she said.

The bill goes to the House Energy and Natural Resources Committee next, then House Appropriations and Finance.

Meanwhile, a bill that would restrict using produced water outside of oil fields, Senate Bill 178, goes before Senate Conservation on Thursday.