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Permian Drillers May Face Freshwater Shortages

New Mexico’s State Land Office is putting an end to the commercial sale of fresh water for oil and gas developments to protect the state’s scarce freshwater resources.

Effective December 15, 2020, the State Land Office will not issue any new easements for the purpose of commercial sales of freshwater for oil and gas development, and will no longer re-issue or renew existing easements for such use once they expire, Commissioner of Public Lands Stephanie Garcia Richard said in a letter on Tuesday.

As fresh water is an increasingly scarce resource in New Mexico—which is home to some of the most prolific shale formations of the Permian basin—the State Land Office now moves to protect that resource and to encourage oil and gas drillers to reuse and recycle water. 

“Rather than looking at fresh water as a commodity for sale to the highest bidder, we should look at the advancements in water recycling and produced water as our way forward,” Commissioner Garcia Richard said.

Drilling and completing an oil and gas well, including the process of fracking, can mostly be accomplished without fresh water, the State Land Office said, noting that a relatively small amount of fresh water is needed for drilling to avoid contamination of geologic formations where other fresh water exists.

Fracking, for its part, consumes millions of gallons more water than drilling, but doesn’t need fresh water.

According to data on water use by drillers reported to FracFocus, almost 14.5 billion gallons of water were used for oil and production in New Mexico in 2019. Yet, recycled or produced water accounted for only a fraction of the total water use, the State Land Office said.

“If we are reliant on an economy based on getting oil out of the ground, we should be prioritizing the use of recycled or produced water to do so,” Commissioner Garcia Richard said.

By Charles Kennedy for Oilprice.com

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