New Mexico announces strategic water supply to address water shortages
NEW MEXICO – In order to increase drought resilience and advance clean energy production and storage, New Mexico Governor Michelle Lujan Grisham announced a strategic water supply, the first of its kind in the United States.
The strategic water supply will support the nation’s transition to renewable energy by providing resources for water-intensive processes around the creation of green hydrogen, the storage of energy produced by wind and solar power, and the manufacturing of electric vehicles, microchips, solar panels and wind turbines.
“In arid states like ours, every drop counts,” said Gov. Lujan Grisham. “The warming climate brings this fact into sharper focus every day. This is innovation in action: We are leveraging the private sector to strengthen our climate resilience and protect our precious freshwater resources.”
Global warming and aridification are exacerbating water shortages throughout the southwestern United States. As a result, some of the region’s reservoirs and groundwater reserves are critically low and are not recharging at a sufficient rate to ensure future water security.
Through a $500 million investment, New Mexico will purchase treated brackish water and treated produced water to build the strategic water supply. In early 2024, the New Mexico Environment Department will issue guidelines and seek proposals from companies interested in entering into a contract.
This contracting model, used in other sectors such as healthcare for vaccine manufacturing, is known as advanced market commitment. Advance market commitments reduce private sector investment risk and encourage first movers to build otherwise costly infrastructure.
Companies awarded an advanced market commitment contract can raise private capital to build and operate water treatment facilities with the guarantee that the State of New Mexico will purchase the water. The state will then make the water available for the creation of green hydrogen; the storage of energy produced by wind and solar power; the manufacture of electric vehicles, microchips, solar panels and wind turbines; and other uses as treatment and demand allow.
New Mexico sits on significant brackish water aquifers, which cannot be used for human or agricultural consumption without treatment. Estimates indicate that there may be between two and four billion acre-feet of brackish water beneath the state. A 25 million gallon per day brackish water treatment plant could produce up to 27,900 acre-feet of potable water per year. By way of comparison, this would cover approximately 70% of the annual water consumption in the Albuquerque area, which is about 40 thousand acre-feet.
In addition, more than 2 billion barrels of produced water were generated by oil and gas operations in 2022, of which 1.2 billion barrels were simply injected into deep wells for permanent disposal in New Mexico. Diverting just 3% of the produced water disposed of in injection wells to make hydrogen could result in enough energy to fully power more than 2 million homes a year.
Governor Lujan Grisham will seek the $500 million in non-general funds. This includes $250 million to be appropriated in the next legislative session and $250 million in the 2025 legislative session. This funding is provided through revenues from taxes collected on oil, gas and other natural resources extracted from the ground.
The strategic location of brackish and produced water treatment facilities throughout the state can offset the demand for fresh water. In the future, the development of science-based regulatory standards may allow for expanded uses of treated water from strategic water supplies.
