Water management

Have the water wars begun in West Texas? New Mexico State Land Commissioner Aubrey Dunn has accused Texas landowners of circumventing New Mexico state laws, and of water theft. In simple terms, New Mexico has a more restrictive policy on issuance of water rights. The state has a priority system for groundwater, which favors older permits. As a result, it has been easier to obtain permits in Texas and move water into New Mexico, which is all perfectly legal.

Texas has a “Rule of Capture,” where landowners basically can pump water from below their properties and pump as much as they like. So, it’s easier to obtain a permit in Texas, and that has led to the movement of water from Texas into New Mexico. Other parts of Texas form Groundwater Districts, which help regulate the Rule of Capture, so a specific landowner doesn’t drain one area to supply another.

Many Groundwater Districts ban exports out of their districts, unfortunately or fortunately, depending on how you see the issue. Loving County doesn’t have a Groundwater District, and Rule of Capture prevails. Rule of Capture has been challenged before. In the 1950s, Comanche Spring in Fort Stockton, Texas, dried up, and Rule of Capture was challenged because of public interest concerns. Yet, Rule of Capture prevailed, reaffirming the original decision that created Rule of Capture back in 1904.

New Mexico has other concerns, as officials claim unpermitted water lines are using state or tribal lands without permission. Another significant difference is that in New Mexico, over 50% of the land is government- or tribal-owned, while in Texas, over 90% is privately owned. Transferring water between two private parties may be simple, but not as simple when you have a government agency to deal with.

Commissioner Dunn believes New Mexico is losing out on tax revenue and doesn’t like the fact that the water is coming from the same aquifer, the Pecos Valley Aquifer. He claims that this is theft, but as I stated, Rule of Capture prevails, and transferring water across state lines isn’t restricted. You may need additional approvals on government or tribal lands, but that is a smaller part of the issue.

Aubrey Dunn feels strongly enough about the issue that he briefly ran for the U.S. Senate. Meanwhile, more and more midstream companies are advertising water delivery from Loving County, Texas, to Eddy County, New Mexico. A major midstream just announced an 11-mi pipeline from Loving County, Texas, to New Mexico, carrying 150,000 bwpd. Is there more to this whole story of water theft—well, maybe?

Water wars between Texas and New Mexico are nothing new. In 1906, the U.S., in a treaty with Mexico, obligated itself to deliver water to Mexico. This water came from the Elephant Butte Reservoir, which was completed in 1916. This reservoir was part of a larger federal government Rio Grande project.

So, in 1938, Texas, New Mexico and Colorado entered the Rio Grande Compact, which requires that a specific allotment be sent to the reservoir, and then an allocation between states, giving roughly 57% to New Mexico and 43% to Texas. In 2008, this allocation changed to 38% to New Mexico and 62% to Texas, when Texas brought up the issue of New Mexico farmers being allowed to drill wells that were hydraulically connected to the Rio Grande.

This led to a pending lawsuit between New Mexico and the Bureau of Reclamation over the change in allocation between Texas and New Mexico, which was filed in 2011. New Mexico argued that it should have been a party to this agreement between Texas and the Bureau. New Mexico’s legal action prompted Texas to act. In 2013, Texas filed suit against New Mexico for the withdrawals from the Rio Grande. New Mexico sought a dismissal, because the compact didn’t specify a quantity of water.

But that didn’t work, and the case is heading to the U.S. Supreme Court. To complicate things, reservoir levels are getting lower, so the quantity of water will be lower, but that’s really nothing new for the Rio Grande. Will Rogers was claimed to have once said of the Rio Grande, “the only river I ever saw that needed irrigation.” So, things are likely to get worse before they get better. But did all this background fighting lead to what is taking place in Loving County and the claims of water theft? Who’s to say? If you’ve been paying attention, the Water War has been going on for some time now.

So where does this leave us in unconventional oil and gas and water management? People underestimate the volume of produced water and the need to consider reuse. It’s not just drilling freshwater wells that is more difficult to permit in New Mexico, but also disposal wells. And some say for good reason, because the injection zones that produced water is injected into are pressuring up or losing capacity. And this is giving re-use a boost, and there is more produced water for unconventional completions than they will ever need. We’re talking nearly 500 MMbbl of produced water generated each month in the Permian, and 200 MMbbl needed for all the completions.

So, why are there big investments in getting freshwater across the border, when companies are producing water that they can re-use at a much lower cost than injecting it into a well? Why should it take talks of pressuring up to get people to pay attention to re-use, when it is cheaper? Well, partly because landowners can’t make money on re-use of produced water, and some restrict produced water transfers across their properties. There is a deal here, when someone figures this out. I guess that’s why water management in unconventional areas is so challenging. Welcome to the Water Wars, and let’s hope logic prevails. 

About the Authors

Mark Patton

Hydrozonix

Mark Patton is president of Hydrozonix and has more than 30 years of experience developing water and waste treatment systems for the oil and gas industry. This includes design, permitting and operation of commercial and private treatment systems, both nationally and internationally. He has seven produced water patents and two patents pending. He earned his B.S. in chemical engineering from the University of Southern California (USC) in 1985.