By Valerie Volcovici

JAL, New Mexico (Reuters)

Flying over the desert landscape of southeastern New Mexico in a four-seat helicopter, Stephen Aldridge could count around a dozen man-made lagoons brimming with toxic wastewater shimmering between drill rigs and pumpjacks.

While this is a growing hazardous waste problem from the region’s booming drilling industry, the mayor of the tiny town of Jal—nestled near the border with Texas in the heart of U.S. oil country—views the scene as an opportunity: a source of water in the second-largest oil-producing state suffering from worsening drought.

“Our future is going to depend on the future of that produced water,” he said.

Aldridge is among a growing group of New Mexico politicians advocating for regulations that allow the millions of gallons of so-called produced water gushing up daily alongside the Permian Basin’s prolific oil and gas to be treated and reused, instead of discarded. He encourages companies to find ways to do this economically, safely, and at scale.

In 2022, the oil and gas industry in New Mexico produced enough toxic fracking wastewater to cover 266,000 acres (107,650 hectares) of land a foot (31 cm) deep. While the state’s drillers reuse over 85% of their produced water in new oil and gas operations, the rest is injected underground.

However, with injection wells filling up, New Mexico has begun restricting deep-underground disposal, which has contributed to earthquake activity. The state is now expected to export over 3 million barrels of that water daily by the end of 2024—a strange dynamic in a water-scarce state.

Around 10 wastewater treatment firms in New Mexico are taking up this challenge under a state-supported pilot program. So far, this has sparked projects to cultivate crops like hemp and cotton and irrigate rangeland forage grasses.

While completed pilots indicate the technology works, it is currently too costly for widespread adoption. The companies and their backers face a political battle, as the debate over how this water should be used is one of New Mexico’s most divisive issues. Opponents express concerns about the potential human health impacts and the implications of subsidizing the oil industry’s waste.

New Mexico’s Democratic Governor Michelle Lujan Grisham introduced legislation last year that would have created a strategic water reserve utilizing treated produced water. Although the bill was defeated by state lawmakers, it will be revisited in the next legislative session in January.

Neighboring Texas is also grappling with increasing issues around wastewater disposal, including an epidemic of exploding orphan wells due to rising subsurface pressure, raising concerns about potential regulatory actions there as well. The Permian basin, spanning Texas and New Mexico, is the top U.S. oilfield.

“It’s getting close to this point of criticality,” said Rob Bruant with energy consultancy B3.

Other states like Colorado and California already use treated produced water in small quantities for agriculture. However, New Mexico’s situation is unique due to the overwhelming volumes and the need for more intensive treatment, as the water is unusually briny—three times saltier than the Pacific.

CRYSTAL CLEAR FISH TANKS

Aldridge stands out in dusty New Mexico, with shoulder-length white hair and a bushy beard, often wearing bright West African tunics. His helicopter tour in late July was part of a visit to one of the state’s wastewater treatment pilot projects run by Aris Water Solutions.

At the mobile trailer field office of the Aris project, Aldridge admired fish tanks on display filled with crystal-clear water processed through Aris’s treatment technology, showcasing around two dozen minnows.

However, the water is hazardous before treatment. Workers on-site are required to wear flame retardant clothing and carry portable monitors to detect toxic gases.

The untreated water is trucked in by local drillers, stored in large tanks, and then piped through a membrane filter to remove solids before undergoing distillation.

The process yields clear water but leaves behind a highly toxic rust-colored mud that is reinjected underground at a registered saltwater disposal site.

Aris claims the treated water is free from pollutants or radionuclides and suitable for industrial and agricultural uses. Starting next year, Aris will commence cultivating non-food crops like cotton with a $10 million grant from the U.S. Department of Energy.

“We view desalinating produced water as a way to create a new water resource for the Permian region, akin to how the water sector has successfully treated municipal wastewater for various purposes,” said Lisa Henthorne, chief scientist at Aris.

The main challenge for Aris and others lies in cost. A barrel of treated water currently exceeds $2, significantly higher than typical costs for industrial or agricultural water. Aris aims to reduce the price to $1, still a sizable expense for users.

Massachusetts-based Zwitter, which recently finalized another water treatment pilot project in New Mexico, indicated that while treated water may never be inexpensive, it could become viable if more affordable than disposal options.

“It is unlikely that agriculture or other water users can afford more than cents per barrel. The value of desalination will be driven by saving disposal costs and could reach $2 to $3 per barrel in the future,” Zwitter stated in its final report.

Currently, disposal costs mere cents per barrel, but that may increase as injection sites reach capacity and waste needs more extensive transport.

Aris has formed strategic partnerships with Permian oil majors, including Chevron, ConocoPhillips, and Exxon Mobil, to develop and pilot technologies for treating produced water for reuse.

“The H2O molecule has no value until you run out of it,” noted Infinity CEO Michael Dyson, whose firm runs a pilot project in partnership with Exxon subsidiary XTO.

TERRIFIED OF GETTING IT WRONG

Avner Vengosh, a professor of environmental quality at Duke University, emphasized that unknown safety risks pose significant concerns. Under federal law, U.S. producers aren’t obligated to disclose all chemicals used during drilling, raising fears that treatment and testing may overlook some hazardous components.

“Numerous technologies can treat the water, but we must evaluate all potential contaminants in produced water. It’s not impossible but must be executed correctly,” he stated.

Infinity’s Dyson concurred that the industry must proceed cautiously.

“We know we’ll only get one genuine chance to get this right, and many of us are anxious about the consequences of failure,” he stressed.

New Mexico’s environment department is revising the 2019 Produced Water Act to tighten water reuse guidelines and enhance research and development for applications beyond the oil and gas sector.

During a week of hearings in early August, strong divisions emerged, with environmental groups and certain scientists expressing doubt regarding the safety of the final product.

Daniel Tso, a former Navajo Nation Council member, reminded that the Navajo have previously suffered from uranium mining’s fallout in New Mexico leading to widespread radioactive pollution.

“Now the industry is trying to make this a public problem, and the public needs to scrutinize the effects,” he stated concerning produced water.

James Kenney, New Mexico’s environment secretary, expressed confidence in technological advancements over the past five years regarding the safety of treated produced water but recognized the state’s troubled history.

“We must acknowledge our record with uranium mining, the promises of wealth, and our failure to protect health. Communities are justified in their skepticism,” he admitted.

For Aldridge, the more he learns about wastewater treatment technology, the more he advocates for the state to open various uses for the water.

“Am I 100% convinced? No, but they are taking steps to convince me, and I need to take those steps with them,” he reflected.

His own rural town of Jal could become a hub for “industries of the future” like data centers or green hydrogen projects, which require substantial water supplies.

Or it could face desolation, similar to the fate of the drilling industry when the Permian basin runs dry.

“I can’t accept that small rural communities like Jal can just vanish.”