Water Reuse

Water is among New Mexico’s most critical resources, and the oil and gas industry understands that. In a drought-prone state like ours, where aquifers, agriculture, and communities compete for limited supply, the industry’s commitment to produced water reuse is one of the most tangible examples of stewardship in action. Companies are not recycling produced water because they were ordered to — they are doing it because it reduces freshwater demand, lowers operating costs, and represents the kind of innovation that makes production more sustainable over the long term.

New Mexico’s oil and natural gas industry is helping address this challenge by recycling and reusing produced water, the water that returns to the surface during oil and gas production. Instead of relying solely on fresh groundwater, companies increasingly treat and reuse produced water within oilfield operations and participate in research programs exploring additional beneficial uses. These efforts are helping conserve freshwater supplies while advancing new technologies that could unlock additional water resources for the state in the future.

What Is Produced Water?

Produced water is the largest byproduct of oil and gas production. It includes naturally occurring water found in underground formations as well as fluids used during drilling and hydraulic fracturing.

Source: New Mexico Environment Department

New Mexico generates very large volumes of produced water because of the scale of energy production in the Permian Basin. Estimates suggest the state produces roughly 4 million barrels of produced water per day — about 160 million gallons daily.

Source: New Mexico Water Advocates

Historically, much of this water has been disposed of through underground injection wells. Increasingly, however, companies are recycling this water for use in new drilling and completion operations, reducing the need for fresh water.

Reuse Is Already Happening in the Oilfield

Within oil and gas operations, produced water is routinely reused in closed-loop systems where it is treated and then used again in hydraulic fracturing or other industrial processes. This recycling provides immediate conservation benefits:

Reusing water in the oilfield has become standard practice in many areas of the Permian Basin.

New Mexico Research and Pilot Programs

The Produced Water Act and Research Consortium

The Produced Water Act (2019) created a framework for studying how treated produced water could potentially be reused outside the oilfield. The law also led to the creation of the New Mexico Produced Water Research Consortium, a collaboration among universities, state agencies, and industry.

The consortium is conducting scientific research to evaluate treatment technologies, environmental impacts, and potential beneficial uses of treated produced water.

Source: U.S. Environmental Protection Agency

State-Approved Pilot Projects

The New Mexico Environment Department allows controlled pilot projects designed to study produced water treatment and reuse technologies. These projects operate under strict rules:

• Closed-loop systems with no discharge to the environment
• Scientific monitoring and reporting
• Review by state regulators and technical experts

The purpose of these pilots is to gather the scientific data necessary to determine how produced water might be safely reused in the future.

Source: New Mexico Environment Department, Pilot Projects

Agricultural and Environmental Research

Some pilot studies are examining whether treated produced water could support plant growth in controlled environments. For example:

• Greenhouse research has evaluated crops such as alfalfa grown with treated produced water
• Tree seedlings have been grown in controlled greenhouse environments to study plant health and soil impacts

Early research results suggest that treated produced water could potentially support certain non-potable uses if treatment technologies meet strict safety standards.

Source: Inside Climate News

Potential Benefits for New Mexico

Science-Based Progress and the Path Forward

New Mexico has taken a science-first approach to produced water reuse. Current regulations prohibit the discharge of produced water into surface or groundwater outside controlled research settings, ensuring that environmental protections remain in place while scientific research continues. Pilot programs, university research, and technological innovation are helping generate the data needed to guide future policy decisions.

Source: N.M. Admin. Code § 20.6.8.400

Water reuse represents one of the most promising areas of innovation in New Mexico’s energy sector. By turning a byproduct of energy production into a potential resource, the state has an opportunity to address two major challenges at once: energy development and water scarcity. Through continued research, responsible pilot programs, and advances in treatment technology, New Mexico can remain a national leader in exploring new ways to conserve water while supporting economic growth.

Produced Water by the Numbers

Why These Numbers Matter

Produced water reuse can help:

• Conserve freshwater resources in an arid state
• Reduce wastewater disposal volumes
• Support new treatment technologies and research
• Create opportunities for additional beneficial uses in the future