New Mexico to invest $500M in first-of-its-kind strategic water supply build-out

New Mexico will invest $500 million in securing a first-of-its-kind strategic water supply to bolster drought resilience and clean energy production, Gov. Michelle Lujan Grisham (D) announced on Tuesday.

To build up this reserve, the state intends to purchase treated brackish water — naturally occurring, somewhat salty water — and produced water, generated as a byproduct of fossil fuel extraction. 

The supply will help expedite the national power sector’s shift to renewables by providing resources for water-intensive processes, according to the announcement, which the governor issued on the sidelines of the U.N. climate summit in Dubai. 

Among these potential uses are the creation of green hydrogen, storage of energy produced by wind and solar, and the manufacture of electric vehicles’ microchips, solar panels and wind turbines, state officials noted. 

“In arid states like ours, every drop counts,” Lujan Grisham said in a statement, after announcing the initiative at a U.S. Chamber of Commerce event. 

“A warming climate throws that fact into sharper relief every day,” the governor added. 

The New Mexico Environment Department in early 2024 will begin requesting proposals from companies interested in pursuing a contract through what’s known as an “advanced market commitment,” the governor’s office explained. 

Such commitments — used in other industries like health care for vaccine manufacture — decrease the risk of private sector investment and encourage early stakeholders to back expensive infrastructure, per the announcement.

Companies awarded these contracts can secure private capital to construct and operate water treatment facilities with the guarantee that New Mexico will purchase the resultant water. 

From there, the state will make that water available for a variety of water-intensive renewable energy projects, the announcement said. 

New Mexico has a robust brackish water supply, as the state sits on top of substantial aquifers filled with salty water that is unsuitable for human or agricultural consumption without treatment, the governor’s office explained. 

More than 2 billion barrels of produced water were generated by oil and gas operations in 2022, of which 1.2 billion barrels were injected into deep wells for permanent disposal. 

Diverting just 3 percent of that quantity of water to generate hydrogen could produce enough energy to power more than 2 million households each year, per the governor’s office. 

“While New Mexico is doing everything we can to reduce climate warming emissions, it is equally important to focus on water resiliency,” New Mexico Environment Secretary James Kenney said in a statement. 

“Water reuse safeguards freshwater for communities while offering opportunities for clean energy expansion and green manufacturing,” Kenny added. 

To fund this initiative, the governor’s office said Lujan Grisham will be seeking $500 million in non-general fund dollars — $250 million in this upcoming legislative session in the same in 2025.

“This is innovation in action,” Lujan Grisham said. “We’re leveraging the private sector to strengthen our climate resiliency and protect our precious freshwater resources.”