In Arid New Mexico, Rural Towns Explore Treated Oil Wastewater as a Drought Solution

By Valerie Volcovici

JAL, New Mexico (Reuters) – Soaring over the desert expanse of southeastern New Mexico in a four-seat helicopter, Stephen Aldridge observed approximately a dozen artificial lagoons brimming with toxic wastewater shimmering between drill rigs and pump jacks.

While this increasing hazardous waste problem stems from the region’s flourishing drilling industry, the mayor of the small town of Jal, located near the Texas border and at the heart of American oil production, perceives the expansive view as an opportunity: a potential water resource in the second-largest oil-producing state grappling with severe drought.

"Our future will depend on the future of that produced water," he stated.

Aldridge is part of a growing coalition of New Mexico politicians advocating for the establishment of regulations that would allow for the millions of gallons of produced water, which surface daily alongside the prolific oil and gas operations in the Permian Basin, to be treated and reused rather than discarded. They are also encouraging companies to devise sustainable, cost-effective methods for this process.

In 2022, the oil and gas industry in New Mexico generated enough toxic fracking wastewater to cover 266,000 acres (107,650 hectares) of land to a depth of one foot (31 cm). Although drillers in the state recycle over 85% of their produced water for new operations, the remainder is injected underground.

As injection wells become saturated, New Mexico has started to impose restrictions on deep underground disposal due to related earthquakes. By the end of 2024, the state is expected to export over 3 million barrels of this water daily—a peculiar situation in a state facing water scarcity.

Approximately ten wastewater treatment companies in New Mexico are rising to this challenge through a pilot program supported by the state, which has already initiated projects to cultivate crops such as hemp and cotton and irrigate rangeland forage.

While successful pilot projects have demonstrated the viability of the technology, its current cost remains a barrier to broader implementation.

These companies and their supporters face significant political resistance. The debate over how to utilize this water stands as one of New Mexico’s most contentious political issues, with detractors primarily concerned about potential human health ramifications and the implications of subsidizing the oil industry’s waste management.

New Mexico’s Democratic Governor Michelle Lujan Grisham proposed legislation late last year to form a strategic water reserve from treated produced water. Although the bill was defeated in the state legislature, it will be reintroduced in the upcoming January session.

Texas is encountering similar issues with wastewater disposal, including a rise in abandoned wells that have begun to explode due to increased subsurface pressure, raising concerns about potential regulatory actions. The Permian Basin, which spans both Texas and New Mexico, is the premier oilfield in the United States.

"We’re approaching a critical juncture," remarked Rob Bruant from energy consultancy B3.

States like Colorado and California have already begun using treated produced water in limited quantities for agricultural purposes. However, New Mexico’s situation is distinct due to the overwhelming volume of produced water and the fact that its composition requires more intensive treatment since it is three times saltier than Pacific Ocean water.

CRYSTAL CLEAR FISH TANKS

Aldridge, notable for his shoulder-length white hair and bushy beard, is often dressed in vibrant West African tunics.

His helicopter tour in late July was part of a visit to one of New Mexico’s wastewater treatment pilot projects managed by a local company.

At the mobile trailer field office for this project, Aldridge admired fish tanks filled with crystal-clear water treated using the company’s technology, home to several minnows.

However, before treatment, the water is hazardous. Onsite staff must wear flame-retardant clothing and use portable monitors to detect lethal gases.

The untreated water is transported by local drillers and stored in two large tanks before undergoing a filtration process to remove solids and later distilled.

The treatment process results in clear water, leaving behind a highly toxic mud that is disposed of underground at designated saltwater disposal sites.

The company asserts that its treated water is free of pollutants or radionuclides, making it suitable for industrial and agricultural applications. Starting next year, they plan to cultivate non-food crops like cotton using a $10 million grant awarded by the U.S. Department of Energy.

"The approach we’re taking is akin to how the water industry successfully demonstrated the safe treatment and repurposing of municipal wastewater,” said the chief scientist at the company.

The primary challenge for the company and others in the field is cost. Currently, a barrel of treated water comes at a price exceeding $2, significantly higher than what industrial or agricultural water users are accustomed to paying. The company aims to reduce costs to $1, which would still represent a considerable expense for users.

A Massachusetts-based firm recently concluded a separate water treatment pilot project in New Mexico and indicated that although treated water may never be inexpensive, it could achieve viability if it becomes cheaper than disposal options. Presently, disposal costs only pennies per barrel, but those expenses may rise as injection sites reach capacity and waste needs to be transported farther.

The company has established strategic partnerships with major oil companies operating in the Permian Basin to develop and test technologies for treating produced water for reuse.

The subsidiary of a major oil company has also partnered with another water treatment firm to conduct a pilot project in the region.

"We understand we’ll only have one chance to get this right, which makes many of us apprehensive about the outcome," said the CEO of the water treatment firm.

UNCERTAINTY ABOUT SAFETY

Concerns about undisclosed safety risks are prevalent, according to an environmental quality professor. Federal law does not mandate U.S. producers to reveal all chemicals used during drilling, raising alarms about whether water treatments adequately address dangerous components.

"Numerous technologies can treat the water, but the challenge lies in identifying all potential contaminants in produced water. It’s essential that it is conducted accurately," he noted.

Industry leaders agree that caution is warranted.

The New Mexico environment department is revising its 2019 Produced Water Act to strengthen regulations regarding water reuse and expand research and development initiatives beyond the oil and gas sector.

During a series of hearings in early August, divisions on the issue were stark, with environmental groups and some scientists questioning the safety of the final product.

A former member of the Navajo Nation Council highlighted the historical detrimental impacts of mining in the state, prompting calls for vigilant scrutiny of the industry’s practices regarding produced water.

The environment secretary for New Mexico acknowledged advances in technology over the past five years, expressing confidence in the safety of treated produced water, while also recognizing the state’s tainted history.

"We must confront our past failures, including uranium mining and the promise of wealth that failed to protect health. Hence, communities are justified in their skepticism."

Nevertheless, Aldridge expresses growing willingness to advocate for expanded uses of the water as he learns more about wastewater treatment technology.

"Am I completely convinced? No, but they are making efforts to earn my trust, and I must take those steps with them," he stated.

He envisions his rural town, Jal, transforming into a hub for "industries of the future" such as data centers and green hydrogen projects, which require substantial water supplies.

Alternatively, if things do not change, the area might eventually dry up, mirroring the inevitable decline of the drilling industry once the Permian Basin’s oil and gas reserves are depleted.

"I simply cannot accept the notion that small rural communities like Jal could just disappear."