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F I S C A L I M P A C T R E P O R T

SPONSOR Cervantes

ORIGINAL DATE

LAST UPDATED

2-10-06

HB 816

SHORT TITLE Aquifer Conservation Re-Injection Permits

SB

ANALYST Woods

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY06

FY07

NFI

NFI

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Energy, Minerals and Natural Resources Department (EMNRD)

New Mexico Environment Department (NMED)

SUMMARY

Synopsis of Bill

House Bill 816 amends the Ground Water Storage and Recovery Act to provide a mechanism for

entities to receive permits for an “aquifer conservation re-injection project.” The legislation also

provides for a prohibition on re-injecting water into an aquifer without appropriate permits, sets

out the State Engineer permitting requirements for aquifer conservation re-injection projects, re-

quires that injected water be potable, and allows the State Engineer to charge a fee for aquifer

conservation re-injection projects.

There is no appropriation attached to this legislation.

SIGNIFICANT ISSUES

The Energy, Minerals and Natural Resources Department (EMNRD) notes that, unlike the

ground water storage and recovery projects currently authorized, the water user undertaking an

aquifer conservation re-injection project would not have the right subsequently to withdraw wa-

ter from the aquifer in addition to its water right by reason of having injected water pursuant to

the project.

House Bill 816 – Page

2

Presumably the purpose of the project would be to provide a means by which a water user could

mitigate adverse effects on other water users that might otherwise constitute an impairment of

their water rights.

EMNRD additionally indicates that HB 816 prohibits re-injection of water into an aquifer with-

out a permit from the State Engineer. [Page 6, Lines 4 through 6] The applicable definition of

the term, "aquifer" [Page 1, Lines 20 through 22] is not limited in any way. Accordingly, an un-

intended consequence of the bill would be to require a State Engineer permit for injection of pro-

duced water from oil and gas operations into deep reservoirs for purposes of secondary recovery

or disposal, an activity regulated by the Oil Conservation Division (OCD) of the Energy, Miner-

als and Natural Resources Department (EMNRD). This unintended consequence could be fore-

stalled by an amendment stating that the requirement for a State Engineer permit would not ap-

ply to injection conducted pursuant to an OCD permit. With respect to injection permitted by

OCD, environmental concerns about injection into a freshwater aquifer are currently addressed

by OCD rules that generally prohibit injection into any aquifer where the native water contains

less than 10,000 ppm of total dissolved solids unless the injected water is of higher quality than

the native water. 19.15.9.701 NMAC.

EMNRD adds that the Environment Department (NMED) permits underground injection wells

not associated with oil and gas operations. Like the OCD, the ED exercises this permitting au-

thority pursuant to the Underground Injection Control (UIC) program authorized by the federal

Safe Drinking Water Act, and must address environmental concerns. HB 816 should also ex-

clude from the requirement for a State Engineer permit injection pursuant to a permit issued by

NMED unless undertaken for the specific purpose of conducting an aquifer conservation project.

NMED notes that the Ground Water Storage and Recovery Act allows governmental entities,

defined as Indian nations, tribes or pueblos or state political subdivisions, including a municipali-

ties, counties, acequias, irrigation districts or conservancy districts, to construct, and operate pro-

jects for the storage and recovery of ground water. HB816 would create a new category of pro-

jects called “aquifer conservation re-injection projects,” defined as projects where a water user

re-injects potable water into an aquifer to reduce effects of the user’s aquifer withdrawals and

reduce effects on other water users from the user’s withdrawals. A permit for an aquifer

conservation re-injection project would not allow the recovery of the injected water and once the

water has been re-injected into the aquifer it becomes public water available for beneficial use.

If the water re-injected is treated wastewater, the permitting requirements would allow applicants

for aquifer conservation re-injection projects to reduce their consumptive water rights usage from

the aquifer.

NMED further notes that HB816 uses the term “potable” and “potability” when referring to the

quality of water that may be re-injected. “Potable” and “potability” do not have regulatory defi-

nitions pursuant to the New Mexico Water Supply Regulations or the New Mexico Water Qual-

ity Control Commission (WQCC) Regulations. It could therefore be subject to differing regula-

tory interpretations, making regulation of aquifer re-injection difficult. [See Technical Issues]

TECHNICAL ISSUES

NMED notes that on page 1 line 25, HB816 defines aquifer conservation re-injection projects as

projects where the water user re-injects “potable water” into an aquifer. On page 6 line 16,

HB816 also establishes a permitting requirement that the water to be injected meets all standards

House Bill 816 – Page

3

for “potability” pursuant to laws and regulation. There is no definition of potability. This

requirement would conflict with WQCC Regulations adopted pursuant to the Water Quality Act.

WQCC regulations require a permit for all discharges that may cause an exceedance of the

WQCC ground water standards. Potability is not a defined ground water standard of the WQCC.

The WQCC has ground water standards for the protection of human health, other standards for

domestic water supplies, and standards for irrigation use. All of these standards must be pro-

tected in WQCC permits for discharges of wastewaters. In addition, New Mexico’s Water Sup-

ply Regulations specify the properties of waters that may be provided to customers for human

consumption. Potability is not one of these properties. Therefore, HB816’s potability re-

injection requirements are inconsistent with other state permits required by law, which is also a

requirement of HB816 in 72-5A-4.C on page 6 lines 4-6.

NMED suggests that proposed language for 72-5A-4.D on page 6 lines 12-13 states: “no aquifer

conservation re-injection permit may allow the recovery of injected water.” However, 72-5A-

4.D(2) on page 6 lines 17-19 states: “once the water has been re-injected into the aquifer it be-

comes public water available for appropriation for beneficial use.” Injected water becomes

ground water in the aquifer and will be later recovered or withdrawn for beneficial use. It ap-

pears that the intent of this language is that the entity re-injecting the water does not get the di-

rect benefit of later recovering the water. Therefore, these two statements need to be clarified.

AMENDMENTS

EMNRD proposes the following amendment in order to avoid the presumably unintended conse-

quence of requiring State Engineer permits for injection projects currently permitted by OCD

and other agencies that are not related to the objectives of the bill:

On Page 7, at the end of Line 6, strike the period, insert a semi-colon, and add the fol-

lowing: "provided that no permit from the State Engineer shall be required for any in-

jection activity that is permitted by the Oil Conservation Division of the Energy, Miner-

als and Natural Resources Department, or by the Environment Department, pursuant to

the Underground Injection Control program authorized by the federal Safe Drinking

Water Act, and is not related to an aquifer conservation re-injection project."

BW/nt