Summary:

 Senate Bill 178 (SB 178) amends and enacts sections of the Produced Water Act and amends the Water Quality Act and the Tax Administration Act. It restricts the use of produced
water off the oilfield for research purposes only and imposes a five-cent ($.05) produced water fee on barrels of produced water from oil or gas wells. SB 178 creates the Plugging and Remediating Abandoned Wells Fund and deposits money collected from the produced water fee into the Plugging and Remediating Abandoned Wells Fund.

 

Legislation Overview:

 Senate Bill 178 (SB 178) enacts a new section of the Produced Water Act that creates the Plugging and Remediating Abandoned Wells Fund, a nonreverting fund. It imposes a five-cent ($.05) produced water fee on barrels of produced water from oil or gas wells with three exceptions. The produced water fee is deposited into the Fund. The Oil Conservation Division (OCD) will administer the Fund to plug and remediate abandoned wells. It requires the OCD to establish rules for reporting of each barrel of produced water and it specifies the deadline for monthly reports. It directs the Taxation and Revenue Department to administer and collect the produced water fee and applies the Tax Administration Act to the administration and enforcement of the fee.
SB 178 amends the duties and powers of the Water Quality Control Commission (WQCC) in adopting rules for the use of produced water permitted by the NM Environment Department (NMED). It specifies that produced water will be used for research only and that the NMED may not allow use permits for the discharge of produced water or its use for certain specified activities including agriculture, irrigation potable water, aquifer recharge, industrial processes, environmental restoration, road construction maintenance, roadway ice or dust control or other
construction. 
SB 178 makes a technical change in a title of a statute and applies Section 7-1-2 NMSA of the Tax Administrative Act to the collection of produced water fees.
 

Current Law:

 The Produced Water Act (Section 70-13-1 et seq NMSA 1978), passed in 2019, states that all produced water that is produced from an oil or gas well is the responsibility of and under the control of the working interest owners and operator of that oil or gas well. It requires  to obtain a permit from the NED before using the produced water, the rec cycled or treated water or treated product or any byproduct of the produced water. 

Produced water is the wastewater from oil and gas drilling and exploration. This wastewater includes flowback of the fluid pumped into wells for hydraulic fracturing and the ancient, highly saline water that has been in contact with oil and gas in the geologic formations tapped by drilling, for eons. Data to characterize and understand the contaminants and toxins in this wastewater are not readily publicly available.  Some data are considered proprietary by the oil and gas industry. https://mrgwateradvocates.org/produced-water/ 

Amendments:

 2/15/25
The Senate Conservation Committee (SCONC) amended SB 178 (SB 178A SCONC) by removing any references to the Plugging and Remediating Abandoned Well Fund or to plugging and remediating abandoned wells. It orders that the produced water fee be deposited into the Oil and Gas Reclamation Fund. It changes the criteria for the requirement of a permit when water is used in irrigated agriculture in subsection M of Section 70-13-1 NMSA 1978 to require a permit only when the specific practice has shown it to be hazardous to the public health and deletes the requirement for a permit for produced water in this subsection.