This story is republished from NM Political Report, a nonprofit news outlet, as a part of our commitment to bringing you the best in independent news coverage that matters to Albuquerque.
By Hannah Grover
State lawmakers are considering legislation that would create a way to fund cleanup of abandoned oil and gas wells by adding a fee to each barrel of wastewater the industry creates.
SB 178, sponsored by Sen. Harold Pope, D-Albuquerque, would impose new fees on produced water — a byproduct of oil and gas production. Those fees would generate funds used to help New Mexico clean up abandoned oil and gas wells.
The legislation cleared the Senate Conservation Commission on a 6-3 vote after more than two hours of debate on Saturday. The bill now heads to the Senate Finance Committee.
“This is really to deal with the issue of abandoned and orphaned wells and protecting our water,” Pope said. “This is not an attack on the industry.”
The abandoned wells in New Mexico pose environmental threats, including leaking chemicals into the air and contaminating soil and water.
Under SB 178, producers would pay 5 cents per barrel of produced water, with exceptions for produced water that is reused in the oilfield.
“The produced water fee would encourage reuse of produced water on the oilfield where it belongs and alleviate freshwater demand from this very thirsty industry,” Colin Cox, an attorney with the Center for Biological Diversity, said.
Mike Miller with the Permian Basin Petroleum Association said the proposed produced water fee will “add an unnecessary financial burden on oil and gas operators.”
According to the fiscal impact report, nearly 73% of the 2.3 billion barrels of produced water from 2023 operations would have been subject to the fee had SB 178 been in effect.
The fee could generate an estimated $85 million to $90 million.
Produced water is often injected into saltwater disposal wells, where it has been linked to eruptions and earthquakes in the Permian Basin. This is one reason why state officials are looking for ways to use produced water outside of the oilfields, however there are concerns about unintended consequences should that occur. SB 178 also addresses those concerns.
“Until produced water is fully characterized and treatment standards are set based on credible scientific evidence, this bill prohibits the reuse of treated or untreated produced water off the oilfield,” Pope said. “This is consistent with the current state of science. In the meantime, research should continue.”
Miller argued restricting the use of produced water off the oilfields to only research purposes could stifle innovation.
“Companies and research institutions have been exploring ways to repurpose treated produced water for industrial and agricultural applications, potentially reducing reliance on freshwater resources,” he said.