As oil and gas production continues to generate vast amounts of wastewater in southeastern New Mexico, researchers say treated “produced water” could become a valuable resource for agriculture, industrial use and river restoration — if state laws, public perception and regulatory frameworks can catch up.

Produced water is the byproduct that surfaces during oil and gas extraction. In New Mexico’s Permian and San Juan basins, oil and gas wells often bring up far more water than fuel. According to researchers, operators can extract three times as many barrels of water for every barrel of oil, particularly from older wells.

“That water is not being used for any reason,” said Zach Stoll, assistant director of the New Mexico Produced Water Research Consortium. “It’s currently a waste product, and right now it’s mostly reinjected underground or is used for fracking operations.”

The water originates from ancient seawater trapped underground when much of what is now New Mexico and West Texas was covered by ocean between 100 million and 300 million years ago. Over time, pressure and heat formed oil and gas, while also leaving behind highly saline, mineral-rich water.

A current misconception, researchers say, is that oil and gas companies consume large amounts of fresh water during production. In reality, many oil and gas companies have veered away from this practice using variations of produced water.
Because oil and gas companies focus on energy production rather than water treatment, most produced water is reinjected deep underground. Researchers say the growing volume of injection has contributed to an increase in earthquakes across parts of southeastern New Mexico and Texas since about 2010, as pressure builds within underground rock formations.
At the same time, New Mexico faces persistent water shortages driven by drought, climate change and heavy agricultural demand.

Stoll said beneficial reuse of treated produced water could address multiple challenges at once by reducing underground injection, easing seismic risk and supplementing limited water supplies in arid regions.

The New Mexico Produced Water Research Consortium — a partnership among state agencies, universities and industry — is studying whether produced water can be treated to meet safety standards for non-potable uses such as agriculture, industrial cooling and river discharge. Greenhouse and rangeland tests using treated produced water have shown no negative impacts on crops such as alfalfa, Stoll said.

“It looks very promising,” he added.

One focus of the research is surface discharge, releasing treated produced water into waterways like the Pecos River rather than reinjecting it underground. The Pecos has experienced reduced flows in recent years, making it a potential candidate for reuse if water quality standards are met.

Stoll said treated produced water could also help New Mexico meet its legal obligations under the Pecos River Compact and the Rio Grande Compact, which require the New Mexico to deliver water to Texas through these natural waterways. In dry years, those obligations have forced the New Mexico Office of the State Engineer to cut water rights, including in small communities such as Questa and Mora.

“If we can use treated produced water instead of pumping fresh groundwater, that helps preserve our natural aquifers while also meeting compact deliveries,” Stoll said.

Stoll emphasized that produced water would never be used for drinking. Even though after treatment, the water is of much higher purity standards, the water would be suitable only for industrial uses, crop irrigation or environmental flows. The produced water contains high levels of salt and minerals, including lithium and copper, which researchers say could represent an additional economic opportunity for the state.

“There’s a lot of value in that water beyond disposal,” Stoll said.

Interest in produced water reuse extends beyond agriculture and river restoration. We reached out to Kit Carson Electric Cooperative about whether produced water could be used for the proposed green hydrogen project planned in Questa and other parts of northern New Mexico.

CEO Luis Reyes said the idea is a viable option — but current regulations do not allow it.

“Right now, the regulations aren’t in place that would allow us to use produced water for the facility,” Reyes said. “However, we are hopeful Senator Gonzales’ legislation moves forward, because it would enable regulation to consider this as a safe alternative to redistributing the water rights from the Questa mine.”

Sen. Bobby Gonzales has proposed a Senate memorial (SM 11) that calls on the Water Quality Control Commission to consider the science for a rule enabling produced water reuse in New Mexico. California and Texas already allow treated produced water for certain agricultural and industrial uses, and supporters say similar policies could help New Mexico address its water shortages.

In addition to Sen. Gonzales’ memorial, House Bill 207 has been messaged by the Governor for the adoption of regulation enabling produced water re-use.

Draft permits for reuse are currently in development, but Stoll said lawmakers must still decide how produced water should be regulated and when it becomes a usable water resource.

“We need to define at what point treated produced water becomes a regulated water resource,” he said. “That’s the next big step.”

Questa native Louis Herrera, CEO of FUGU Solutions, is also advocating for the legislation. Herrera has submitted a petition to the Legislature calling for regulations that would allow companies to explore produced water reuse and treatment.
In an open letter to the Questa del Rio News, Herrera wrote that New Mexico generates roughly 10 million barrels of produced water daily through oil and gas production — volumes that could help meet compact obligations and support emerging industries without placing additional strain on freshwater supplies.

“At present, substantial quantities of this produced water are transported out of state and utilized in Texas without being quantified, credited or accounted for under New Mexico’s interstate compact delivery obligations,” Herrera wrote. “This results in a systemic loss of potential compliance benefit and strategic water value to the state.”

As drought conditions persist and weather patterns grow more unpredictable, Stoll said expanding sustainable water sources will be critical for New Mexico’s future.

“Reuse is important,” Stoll said. “You can only reuse what you have — and produced water is one of the largest untapped water sources in the state.”