Dry New Mexico Actually Has Lots of Water. Unfortunately, It’s Toxic — So Far.

One could make a strong argument that New Mexico is peppered with more than 50,000 active water wells that happen to produce oil and gas. Those wells draw more than three barrels of water for each barrel of oil, but it’s not anything you’d want to drink or water your chiles with. That wastewater — also called produced water — is highly saline, chemical-laden and often radioactive. 

And as the state’s oil and gas production again rises to some of its highest levels ever, wastewater amounts rise as well. In 2025, New Mexico’s oil and gas producers drew more than 800 million barrels of oil and 2.7 billion barrels of wastewater out of the ground. 

That’s a multifaceted problem. The water is poisonous, few people want it, and its disposal creates expensive knock-on effects. Last year, a Dallas Federal Reserve Bank report said that 75% of more than 100 oil executives surveyed expected that by 2031, wastewater disposal problems will throttle oil and gas production in the Permian Basin, the most productive oil and gas field in the country. And all of that water leads to some spectacular accidents.

New Mexico’s Water Quality Control Commission regulates how and where that toxic water can be used, and it’s a short list — it can be used in closed-loop testing projects or oilfield applications like drilling wells, a process that can use up to 380,000 barrels per well. But that’s nowhere near enough to account for all of the state’s wastewater. The rest is reinjected underground in deep rock formations, a process that can pollute aquifers, contaminate oil pools and even trigger earthquakes. A lot of the wastewater is piped and trucked over the state line to Texas, where looser regulations make it easier to dispose of, though the risks remain.

The Water, Access, Treatment and Reuse (WATR) Alliance thinks New Mexico’s answer lies in new technology and science that it contends can clean the water to the point where it can be used “without adverse impact to aquatic species, soils and plants, or human cells.” Environmental groups vehemently disagree, and say the technology isn’t ready for broad public use. 

The alliance has a petition before the Water Quality Control Commission to change state rules and allow treated wastewater to be used outside the oilfield. They say the technology is ready for broad use. A previous petition from the alliance was rejected last year when it was revealed that Gov. Michelle Lujan Grisham had meddled in the process. All of this follows a commission ruling last May to keep the status quo and revisit the issue in 2030.

At this point, the commission has agreed to hear the new alliance petition, but no dates for those hearings have been set. In the meantime, Matthias Sayer, vice president of the WATR Alliance, sat down with Capital & Main at the New Mexico PBS studios in Albuquerque to discuss what’s driving the petition, who’s behind the alliance and the state of wastewater science. 

This interview has been edited for clarity and brevity. It also differs slightly from the NMPBS video, which changed the order of some questions.

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Capital & Main: I think a big question is why are we so concerned about this wastewater? What’s in it that has people so worried?

Matthias Sayer: Well, I think using the term “wastewater” is a good indicator of why we should be concerned when we’re talking about a waste product and then potentially recycling or reusing that waste product. Legitimate questions should be answered about what’s in the waste and what are the intended uses of that waste. And so in the context of produced water and reusing treated, produced water, there are chemical compounds in that water that we need to be worried about. And so when we have a conversation about reusing this treated wastewater, we need to be very mindful of the answers to those questions. 

So what are those compounds? Your proposal before the Water Quality Control Commission notes 400-plus chemical compounds. There are pages of chemicals noted on there. Are those all of the compounds that could show up in oilfield wastewater? Are there more?

The list that you’re talking about is included in the draft rule as an appendix. That list comes from work generated from the New Mexico Produced Water Research Consortium. And that list was developed on the back of years of work and sampling of water from the Permian Basin, both the New Mexico and Texas side.

An awful lot of what we’re talking about is new technology to clean the water to make it usable. But there’s also the science aspect of it, and I think those two terms get conflated. 

The gold standard of science is peer review, where you take the new technology and you offer it to third parties — not influenced by or part of the group that did the research in the first place — and you see if they can reproduce your results. 

How many of the technologies from the Produced Water Research Consortium or other groups have gone through the peer review process?

It’s an important question, and my first response is to clarify a little bit when we talk about technology to treat produced water. It is not so much that there is new technology to treat this water, but it’s a combination, it’s a treatment train. It’s putting together the right treatment train, the right pieces of treatment in your train to address the chemicals that we know are in the water. And in terms of which of these treatment trains — have they been reproduced, has there been peer review analysis of the ability of these treatment trains? I don’t have a number for you to say how many replications of a particular train have been attempted or executed, but it certainly has happened. 

And then there is a body of peer review literature looking at the data that came from these different treatment trains of treating this specific water because that is relevant, right? When we talk about produced water, it exists across the globe. Anytime water comes up with oil and gas production, we call that produced water, but just like water in the Pecos River as compared to water in the Susquehanna River, those water qualities are going to be very different. [In the same way], produced water from the Permian Basin is very different from produced water in the Marcellus Basin in Pennsylvania.

Last year I talked with Dr. Pei Xu, a scientist at New Mexico State University and a lead scientist on a lot of this work. She refers to it as science and she said, “If everybody looks for the peer reviewed publications, I think we still need some time, especially related to all these ongoing studies.” 

So wouldn’t slowing this process down a bit give time for peer reviewed work to come in? You could say, “Look, we’ve done the work, we’ve got these new trains. The trains check out. Not only do they check out, we have third parties that say these new trains check out.” Wouldn’t that get rid of a lot of the issues you’re bumping into at this point in the public sphere?

I think there’s two answers to that question, or at least two ways to examine the question. First, if you spend a lot of time with Dr. Xu and her team, what becomes very clear is that the state of the science, the body of research examining the data that’s been produced is conclusive: We can do this in ways that are protective of human health in the environment today. 

She did say that. I agree.

And so what we think is appropriate is a hearing, and through the course of that hearing, put all of this body of research in front of them and show how that science supports the framework that’s been proposed in the draft rule. Ultimately, it’s not my opinion, your opinion or even Dr. Xu’s opinion that matters. It’ll be the commission reviewing the testimony from the experts to say, you know what? We think based on the state of the science as of today that X is appropriate, maybe not X plus Y, maybe it’s just X. Maybe it is X plus Y, but it’s a decision for the commission to make.

But that’s still not quite the idea that you give it to a third party to check it out, check your work, check their math. And I still don’t see why you wouldn’t let that process play out. 

I’ll tack something onto this as well, and it’s the way the Methane Waste Rule was brought up for oil and gas production. That came about because the state brought together players from oil and gas, brought together environmental groups, brought together citizen groups, and everybody sat down in several rooms over a long period of time and they hammered it all out in advance before rulemaking.

Why don’t we wait for that science to be done or why didn’t we start with a process where you bring everybody together first and figure out where the problems are and then hammer it out from there?

I think it’s a good comparison, but I think there’s an important distinction here in terms of what we’re talking about, and this is when I mentioned there’s two different ways to look at that question. The first is what I said earlier. The second is a conversation about social license and negotiating social license. And I think when you think about and talk about the Methane Advisory Group, that really was a negotiation of social license between the different stakeholders. 

What do you mean when you’re talking about social license and negotiating social license?

I suppose my definition of social license would be trust from the community and the community to appreciate what is being proposed and ultimately adopted by a regulatory body is something that communities and the average New Mexican can trust in. And that is a hard thing to negotiate. I think that that’s a harder thing to negotiate than the actual technical merit of the rule itself. 

Speaking of your group, the WATR Alliance, I think there’s a good question about what is the WATR Alliance? Who are you? 

We’re a collection of water stakeholders. I can tell you some of the different stakeholder groups who were involved in the WATR Alliance. Some of them you know about. 

There’s been a lot of publication and discussion about the fact that the membership of the WATR Alliance includes oil and gas producers. They’re water stakeholders, and in the case of produced water, they’re a large water stakeholder. But they’re not the only members of the WATR Alliance. 

We have technology companies, we have water treatment companies, some of which are large multinational water treatment companies, smaller water midstream companies whose job it is to move water. We have some local government entities who are members of the Alliance. We have traditional water resource managers who are water members of the Alliance. So it’s a relatively diverse group of, again, water stakeholders.

I will just point out again though, that’s not a public list. I can’t really go back and fact check you on this in some way, can I?

It’s not a public list, and I haven’t looked at our website recently to see what we include on there.

It’s you and Jennifer [Bradfute, the president of the WATR Alliance], the secretary and then the board members.

Yeah.

One of the board members is a group called B3 Insight, and its vice president has been pretty vocal in the past year saying the real reason we’re here: The increasing amount of produced water coming out of the Permian Basin [creates a disposal shortage that] runs the risk of restricting oil and gas production from the biggest basin in the United States. 

This is something that was echoed by the Dallas Federal Reserve Bank. Last year it came out with a study of more than a hundred oil and gas executives, 75% of whom said within the next five years, the biggest brake on oil and gas production without question is produced water. And we’re actually at four years now. It came out almost a year ago. 

Isn’t that really what we’re looking at here? Isn’t that really a huge driver of the WATR Alliance?

Yes and no. I will say when we first started this effort, I actually worked for the state of New Mexico. I was inside the Energy Minerals and Natural Resources Department working on issues related to water. 

And this was at a point in time when constraints on production were nowhere on anyone’s horizon, but what was on our horizon was water scarcity, and we saw the volume of water coming up out of the ground and then being disposed of — and it’s a robust volume of water, right? We thought we should look at the regulatory framework and the technical frameworks and the state of the science as it pertains to produced water and ask the question: Is this a water source we should be pursuing for beneficial reuse in the state of New Mexico? And so we did work to look at and answer that question. We put together a white paper between EPA and the state of New Mexico.

When was that? 

That was in 2017, 2018. So the white paper was published in 2018. Then in early 2019, we had the Produced Water Act, which tried to close some of the gaps that we identified in the white paper. And then the Produced Water Research Consortium was stood up in 2019 focusing on the technical questions and closing some of those gaps as well. 

And at that time, again, the question was: Can we use this water resource? Over the last two or three years, it’s become more of a logistical problem. The volume of water is starting to exceed the solutions for management. And so it has become a relevant point of the inquiry where we will face production curtailment if we don’t manage the water solution or the water problem. 

I will say the bulk of the water today that’s produced in New Mexico does move across the state lines and is disposed of in Texas. And so if New Mexico does not do anything with produced water, and if we don’t want to reuse the water, what will happen is that the bulk of New Mexico water will again continue moving to Texas. And Texas will either dispose of it as it presently does or reuse portions of it as it’s currently on trajectory to do.

The big question gets back to what happens when there’s an accident. What happens when this process falls apart? Yes, there is a great deal of technology that’s coming up. It looks very promising. Let’s say that in a year, two years, five years, whenever it is, we get through all the science and this stuff starts getting used. What happens when the accidents happen?

So if we assume the rule that we drafted and is sitting in front of the commission, in its present form or similar to its present form were adopted, and this permitted activity were taking place — so we’re assuming it’s a permitted activity under the rule as it’s presently written — the permitted entity would be the responsible party. And there’s some presumptions built into the rule that again, that the operator is the responsible party. So that’d be risk and liability that would be shouldered by the operator, the permitted entity.

The operator being the oil and gas company that brought it up in the first place, or the company that’s selling the treated produced water?

It’d be the permitted entity. So whichever entity obtained the permit to treat and distribute that water. And there are provisions built into the rule which require financial assurance on the front end for estimated cost of closure and management post-closure as well as costs associated with remediation type activity. 

Like the bonding you have for oil and gas wells, is that kind of what you’re talking about?

Well, it’s not like for oil and gas wells, it’s more like for mines. Because bonding for an oil and gas well is not based on the estimate of cost of closure, whereas the bonding and financial assurance for a mine is based on an estimate of cost of closure, where you have an engineer produce a report that says this is what the estimated cost is for closure, post-closure, and there’s parts of the rule, a piece of the rule, kind of a mechanism where the department would determine and when they’re reviewing the application, do we think that abatement will be something that’s necessary based on the proposed end use? And if we think abatement is necessary and relevant, then there’ll be financial assurance associated with abatement.

The amount of stuff the Environment Department already has to do is pretty astronomical. This has been an issue for the Oil Conservation Division as well. It does not appear to be receiving the amount of money to do the job that they’re tasked with doing. 

Where is the money going to come from to set up this whole new office at the Environment Department? I didn’t see those numbers in the proposal you put forth for the new rule.

There has been discussion of that both with the Environment Department and inquiry from the Water Quality Control Commission as well. And it’s a live issue and we see some of it playing out in the context of the rulemaking pending right now before the Water Quality Control Commission as it pertains to the surface discharge rule where a new fee structure is being proposed and contemplated. 

There is a fee structure component of our draft rule as well. And a necessary piece of that conversation about fees is the very issue you raise. And so we’ve had a lot of discussion with the Water Protection Bureau at the Environment Department about appropriate fees for a program like this. 

One thing I do want to just really stress as it pertains to this rule is that if it were adopted and an applicant were to submit an application for a permit and receive a permit, the permit would not allow them to go do anything tomorrow. It could not go discharge tomorrow at the full capacity that they were requesting. 

And this is an important piece of Dr. Xu’s work when she says, we want to see some additional data here or there. They’re always going to want to see additional data and we think that’s important. So the first year of any applicant’s permit would be essentially a phase-in period. You demonstrate that you can do this at a larger scale than a pilot scale. Produce data that says, we can do this, we can meet these permit terms and conditions. And only once you’ve demonstrated that would you then be able to move into your full requested volume of production and operation.

If there is still so much up in the air and if there is still so much pushback against what you’re doing, why the rush to push it right now? Why not still wait for 2030 and get all your ducks lined up and hit it then?

Well, I think some of the uncertainty you’re pointing to is mild uncertainty, like what is the appropriate cost or fee structure? That’s an open question that can be answered relatively succinctly and quickly. It’s being asked and answered right now in the rulemaking that’s in front of the commission on another topic. So I don’t think that’s a reason to wait five years [now four years]. 

But the primary reason why I don’t think we need to wait five years and why we’re pushing this now is because the experts, some of the global experts — some of the leading minds are Dr. Xu and her team — and they’re saying: We can do this now. And if we lived in a place, if we lived in Minnesota, where our water supplies were not scarce, then Dr. Xu’s research would be intriguing at best. But given where we live, given the fact that over the next 50 years we will experience a 25% reduction in our freshwater availability, we think that it’s imperative that we move now on nontraditional water resources.

Right now we produce around 7 million barrels a day in New Mexico of produced water. Somewhere between a third and two-thirds of that is transported to Texas for management. We know Texas is moving forward with reuse applications. They’re right now advancing a rulemaking for surface application on soil as well. 

So what will happen if New Mexico does nothing with this? We’ll continue to move that water to Texas, and Texas will put the water to beneficial use. And so if we wait five years, there’s a high likelihood that there’ll be very little produced water remaining in New Mexico that’s not otherwise spoken for in Texas.

Instead of asking for all of these possibilities for treated produced water, why not just say: industry. And then come back later and look at it for agricultural or other uses. Why not start with glass production, cement work, chip manufacturing, AI data centers? 

That’s a really good question and a really good point. The quickest answer to your question is because the science says that we can do more now. 

Right now … we’d like to put the full body [of options] in front of the commission and let them decide what they think is appropriate.

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