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Within weeks of taking office in 2019, Gov. Michelle Lujan Grisham signed Executive Order 2019-003, pledging to reduce greenhouse gas emissions statewide. It was a decisive gesture that brought hope to New Mexicans eager for a climate leader. Five years later, this pledge has yet to be codified into law and the state is nowhere near achieving the emissions goals that it set out.[i]

Meanwhile, under the governor’s leadership and with her explicit support, natural gas production has nearly doubled and oil production has grown by 127 percent.[ii] The governor has gone out of her way to court the oil and gas industry, seeking its “collaboration” in policy matters, and has promised to balance environmental protections with “driving . . . all of our energy industries forward.”[iii] No matter how you spin it, these goals and these actions are at cross purposes.

Since the start of her second administration, in 2023, Lujan Grisham has attempted to reconcile the two through an unpopular and ill-fated campaign to build New Mexico’s hydrogen economy – a false solution that will do nothing but further derail our progress toward clean energy. Near the end of the year, at the COP28 climate change conference in Dubai, she capped this effort with the announcement of a plan to develop a “strategic water supply,” using state funds to underwrite the acquisition of treated brackish and produced water for use outside the oil field – another false solution.[iv] She’s couched the plan as an effort to “strengthen our climate resiliency,” “support the nation’s transition to renewable energy” and “protect our precious freshwater resources.”

Let us be clear, however: The governor’s strategic water supply plan is not a climate initiative; it is an oil and gas initiative. It serves three interests above all:

1. Oil and gas producers, particularly in the Permian Basin, by helping to solve their problem with wastewater disposal and allowing for continued growth in the Permian.

2. Hydrogen advocates – most of whom are also tied up in oil and gas – by ostensibly enabling the development of hydrogen, an extremely water-intensive technology, in one of the most water-stressed states in the country.

3. The governor herself, by promoting her image as a tech-savvy climate leader on the national stage while appeasing an industry whose astronomical growth in recent years has allowed her to preside over a sequence of record-breaking budgets.[v]

There is no question that the oil and gas industry should be prohibited from utilizing New Mexico’s dwindling freshwater resources. But this can and should be achieved through a ban written into a long-awaited update to the state’s Oil and Gas Act, not by incentivizing voluntary action.[vi] Rep. Debra Sarinana (D-21) has sponsored a bill with just such a ban (HB 30) in the current session, along with a bill that would increase penalties for spills and leaks of produced water and require companies to make public the chemical composition of spilled produced water (HB 31), both of which they have long resisted.[vii] Protecting our water supply is not what the governor’s “strategic water supply” plan is about.

In this report, we analyze campaign contributions, meeting schedules, public records and press reports to illuminate the paths of influence and association that lie behind the governor’s produced water plan. They are many, and nearly all lead back to fossil fuels. Our key findings:

The governor has benefited significantly from oil and gas industry support.

• Between 2017 and 2022, Lujan Grisham received at least $1.38 million in campaign contributions from energy-related interests. Sixty-four percent of this total – $882,100 – came from entities primarily engaged in or associated with oil and gas production.

• Between Lujan Grisham’s first and second elections, her energy sector contributions grew by more than 100 percent. Her oil and gas industry contributions grew by 75 percent. In other words, Lujan Grisham went into her second administration with twice the energy-related money she had going into her first administration.

• Energy sector interests have also made use of Lujan Grisham’s two inauguration committees to make additional, unregulated contributions. These amounted to at least $78,700 in 2018 and $89,000 in 2022.

• These contributions have succeeded in buying the industry access. Lujan Grisham’s public calendar lists more than 130 meetings with energy-related interests going back to 2019. Just over half of these (51 percent) were with oil and gas interests; another 21 percent were with electric utilities and 5 percent were with hydrogen interests. Only 16 percent were with renewables interests.

• Nearly all the governor’s top oil and gas contributors have expanded their operations in the Permian significantly in recent years through acquisitions totaling hundreds of billions of dollars, and several have announced plans for continued growth in the coming decade. 

The oil and gas industry has been pushing produced water initiatives from the beginning.

• Wastewater disposal is a major problem for oil and gas producers in the Permian Basin due to the current shortage of in-state disposal options. Most produced water originating in New Mexico is transported out of state to injection wells in Texas. Texas has begun to limit the practice due to an increase in seismic activity – raising the prospect of a crisis for producers in New Mexico.

• Oil and gas interests shaped the 2019 Produced Water Act, which set the groundwork for the governor’s current initiative. Marathon Oil boasts on its website of having “spearheaded” the legislation.

• The Produced Water Act was a key factor in Lujan Grisham’s winning over of oil and gas interests. A Marathon Oil executive stated publicly after its passage, “The policies pursued by the administration in 2019 demonstrate that the Governor’s Office seeks to promote both development and sustainability within the Permian Basin.”[viii]

• The New Mexico Produced Water Research Consortium (NMPWRC), established by the New Mexico Environment Department and New Mexico State University to “develop a framework to fill scientific and technical knowledge gaps necessary to establish regulations and policies for the treatment of produced water,” is industry funded, and most of its members are industry players.

• The governor’s top oil and gas donors are well represented in the NMPWRC as well as in produced water trade groups, often as top-level sponsors. This is an issue they are actively prioritizing.

The oil and gas industry is also leading the push for a hydrogen economy, which relies on the prospect of produced water.

• The development of a hydrogen economy in New Mexico has become a signature issue for the governor in her second term, despite resistance from a majority of environmental advocates.

• Hydrogen serves the interests of natural gas, and most of the key players in the governor’s hydrogen program have ties to the natural gas. Many are also major donors to Lujan Grisham’s campaigns.

• Hydrogen research was an item on the budget of the NMPWRC as early as 2021.

Using public funds to incentivize the commercial treatment of oil and gas wastewater is not a climate solution. It is a handout to oil and gas companies looking for ways to dispose of their toxic waste while meanwhile creating more and more of it. It is also a left-field attempt to prop up a technology – hydrogen – that has no future in New Mexico without a ready supply of water. 

The real threat to our climate resiliency, our transition to renewable energy and our precious freshwater resources is the oil and gas industry’s current practices, including its insistence on growth at all costs in the Permian Basin. Oil and gas companies could choose to be climate leaders themselves, but they have not. The real solution – the only solution – is putting an end to new oil and gas development; immediately phasing out fossil fuel sources; building out clean, renewable energy sources like wind and solar; and ensuring a just transition for impacted communities.

[i] Alex DeGolia, “New Mexico Is Off Course for Reaching Its Climate Goals, but There’s Enormous Opportunity for Action,” Environmental Defense Fund, September 11, 2023.

[ii] Production totals for the period between January 2019 and October 2023 (the most recent available). U.S. Energy Information Administration, “Petroleum & Other Liquids: New Mexico Field Production of Crude Oil,” https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MCRFPNM1&f=M. U.S. Energy Information Administration, “Natural Gas: New Mexico Natural Gas Marketed Production,” https://www.eia.gov/dnav/ng/hist/n9050nm2m.htm.

[iii] Adrian Hedden, “New Mexico Gov. Michelle Lujan Grisham calls for unity with oil and gas in climate goals,” Carlsbad Current Argus, October 6, 2021.

[iv] “Gov. Lujan Grisham to Establish First-of-Its-Kind Strategic Water Supply – $500 Million Investment Will Leverage Advanced Market Commitments” (press release), Office of Governor Michelle Lujan Grisham, December 5, 2023.

[v] “State of New Mexico Budget in Brief, Fiscal Year 2024,” New Mexico Department of Finance and Administration, April 11, 2023. https://www.nmdfa.state.nm.us/wp-content/uploads/2023/04/FY24-Budget-In-Brief-FINAL.pdf

[vi] Jerry Redfern, “New Mexico Governor Kickstarts Effort to Overhaul Oil and Gas Regulation,” Capital & Main, December 5, 2023.

[vii] Adrian Hedden, “Top Oil and Gas Bills to Watch During New Mexico’s 2024 Legislative Session,” Carlsbad Current Argus, January 10, 2024. “Fracking With ‘Forever Chemicals’ in New Mexico,” Physicians for Social Responsibility, April 12, 2023, p. 12. https://psr.org/wp-content/uploads/2023/04/fracking-with-forever-chemicals-in-new-mexico.pdf

[viii] Adrian Hedden, “New Mexico Governor Michelle Lujan Grisham Vows to Collaborate With Oil and Gas During Boom,” Carlsbad Current Argus, May 20, 2019.