RAPID/Geothermal/New Mexico/Water Access & Rights

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Regulatory and Permitting Information Desktop Toolkit

New Mexico Geothermal Water Access & Water Rights(19-NM)

In New Mexico, pursuant to Geothermal Resources Conservation Act, for geothermal development projects that utilize a “closed loop” system and where the resource is over 250 degrees Fahrenheit, developers can avoid the vast majority of water rights/access considerations specific to extracting the geothermal resource by obtaining a Permit to Drill a Well with No Consumptive Use of Water. Along with submitting the application, developers need to provide the New Mexico Office of the State Engineer (NMOSE) with supplementary information that allows the NMOSE to determine whether the project impairs existing groundwater rights (impairment analysis). For ancillary water uses involved in geothermal development projects (cooling water, dust suppression, etc.) that do involve the consumptive use of water, developers will likely need to purchase water or water rights from a private entity, municipality, or other right holder. If a purchase is involved, developers may need to undergo the necessary processes to formally change ownership and purpose or place of use or point of diversion

In addition to the most common water rights/access scenarios related to geothermal development explained above, New Mexico has additional processes for specific types of water rights and access that may apply in rare cases, including:

  • Temporary Water Use;
  • Deep Groundwater Appropriation;
  • Water Use in Restricted Basins;
  • General Appropriation Process; and
  • Additional Requirements Where Water Resource is on State Trust Lands.

COMMON SCENARIOS RELATED TO GEOTHERMAL DEVELOPMENT

No Consumptive Use of Water For geothermal development projects that utilize a “closed loop” system and where the resource is over 250 degrees Fahrenheit, developers can avoid the vast majority of water rights/access considerations specific to extracting the geothermal resource by obtaining a Permit to Drill a Well with No Consumptive Use of Water. NMSA 72-12-12. Along with submitting the application, developers need to provide the NMOSE with supplementary information that allows the NMOSE to determine whether the project impairs existing groundwater rights (impairment analysis). As part of the permitting process, the developer will need to hire a licensed well driller and submit both a Proof of Completion of Well following completion and a complete well record within 20 days after drilling is complete.

Whenever the water rights/access process requires impairment analysis, the NMOSE and the Oil Conservation Division of the New Mexico Energy, Minerals and Natural Resources Department (NMOCD) must examine the project specifications to determine whether existing groundwater rights will be impaired by the proposed diversion and reinjection of groundwater. The NMOSE will request specific information from the developer to assist in making this determination. Developers may be required to submit a Water Replacement Plan (WRP) that must be approved by the NMOSE before the project can continue. Consumptive Use of Water For ancillary water uses involved in geothermal development projects (cooling water, dust suppression, etc.) that do involve the consumptive use of water, developers will likely need to purchase water or water rights from a private entity, municipality, or other right holder. If a purchase is involved, developers may need to undergo the necessary processes to formally change ownership and purpose or place of use or point of diversion.

In order to apply for a change of ownership through the NMOSE, developers must submit a Change of Ownership of Water Right, the NMOSE will accept the change for filing purposes, and the developer must record the change in the county clerk’s office. Either prior to or subsequent to a purchase and the formal change in ownership process, developers or sellers may need to change the purpose and/or location of use and point of diversion of the water right.

The NMOSE has authority to administrate the change of purpose and/or location of use and point of diversion of a water right pursuant to NMSA 72-12-17, NMAC 19.27.1, and NMAC 19.26.2. In order to change the purpose and/or location of use and point of diversion, (1) the water right must be declared and (2) the developer must formally apply to change the water right. As part of the application process, the developer must provide notice to the public of the proposed change. In some cases, given public protest, the NMOSE will hold a formal hearing in order to give protestants an opportunity to present grievances and applicants an opportunity to respond and present the merits of the application. The NMOSE will determine whether to approve or deny the Application for Permit to Change an Existing Water Right and what, if any, conditions to attach to an approved application.

In addition to the most common water rights/access scenarios related to geothermal development explained above, New Mexico has additional processes for specific types of water rights and access that may apply in rare cases.

OTHER MECHANISMS TO OBTAIN WATER RELATED TO GEOTHERMAL DEVELOPMENT

Temporary Water Use

Developers desiring to appropriate water for less than a year, in an amount less than three acre-feet, are exempt from the general water appropriation process and instead only have to abide by the requirements outlined in NMSA 72-12-3. The statute excepts temporary (and limited) use for specific purposes, including any highways and roads or drilling operations designed to discover or develop the natural resources of New Mexico. Geothermal energy development projects fall within this exception so long as the amount of use and period of use conform to the requirements in NMSA 72-12-1.3. Developers must submit a Application for Permit to Use Underground Waters in Accordance with 72-12-1.3 and the NMOSE will conduct impairment analysis, provide public notice, and respond to any protests on the application.

Deep Groundwater Appropriation

In cases where a groundwater aquifer is entirely 2,500 feet or more below the surface and the water therein is “nonpotable,” certain types of development activities (including the development of geothermal resources) are relieved of the general water appropriation process and instead must only submit to minimal reporting requirements. Under NMSA 72-12-25, “nonpotable” means water containing not less than one thousand parts per million of dissolved solids. Developers must submit a Notice of Intention to Drill Wells to Appropriate Nonpotable Groundwater, a NMOSE Artesian Well Plan of Operations, and an Application for Permit to Drill a Well with No Consumptive Use of Water.

Water Use in Restricted Basins

Even if one of the above exceptions (temporary water use / deep groundwater appropriation) is applicable, developers must consider whether the NMOSE has declared the relevant groundwater basin “restricted.” The NMOSE has administrative authority over all 39 groundwater basins in New Mexico. Generally, the process, law, and regulations for permitting new and changed uses are the same for all groundwater appropriations. However, the NMOSE has developed administrative guidelines for certain “mined” groundwater basins. Groundwater mining occurs when groundwater is pumped faster than it replenishes within a basin. In most cases, basin guidelines result from an order by the NMOSE that a basin is fully appropriated, effectively prohibiting new appropriation permits under NMSA 72-12-3. Some basin guidelines allow for new appropriations under NMSA 72-12-1.3, others do not. Most basin guidelines allow for changes in a right that existed prior to the implementation of the guidelines, but the guidelines in such cases may be more restrictive depending on the purpose and amount of consumptive use. Developers should consult the NMOSE to determine if NMOSE Basin Guidelines apply and to what extent those guidelines affect (or prohibit) the project.

General Appropriation Process

In rare cases, developers may be able to satisfy the project water need by obtaining a Permit (and subsequent license) to Appropriate Water. New Mexico utilizes a “prior appropriation” system to determine water users’ rights to utilize water within the state. The prior appropriation system contains two essential principles:

  • The first appropriator in time has the right to take and use water; and
  • That right continues against subsequent users as long as the appropriator puts the water to beneficial use.

Most of the water in New Mexico has been fully appropriated, however, if an appropriator ceases using water beneficially for four years the water becomes available to other appropriators. NMSA 72-12-8. Surface and groundwater rights are under the jurisdiction of the NMOSE. Surface Water Appropriation Pursuant to NMSA 72-5-1, any person, association or corporation intending to acquire the right to the beneficial use of any waters, must submit a Application for Permit to Appropriate Water. “Beneficial use” is defined as the direct use or storage and use of water by man for a beneficial purpose including, but not limited to, agriculture, municipal, commercial, industrial, domestic, livestock, fish and wildlife, and recreational uses. Beneficial use shall be the basis, the measure, and the limit of a water right.” NMAC 19.26.2.7(D).

Ground Water Appropriation

The water of underground streams, channels, artesian basins, reservoirs or lakes, having reasonably ascertainable boundaries in New Mexico have been declared public and are subject to appropriation for beneficial use. NMSA 72-12-1. The NMOSE has jurisdiction over groundwater after a groundwater basin has been “declared” to have reasonably ascertainable boundaries. Today, over 99% of New Mexico’s groundwater is under NMOSE’s jurisdiction. Most of New Mexico’s groundwater has been fully appropriated, but new appropriations of groundwater still occur.

Additional Requirements Where Water Resource is on State Trust Lands

Finally, where a project requires a water right and the water resource is located on state trust lands, a developer must receive prior written permission from the New Mexico State Land Office (NMSLO) in addition to subsequent necessary approval from the NMOSE. The NMSLO will only grant permission when the desired use of the water resources is in the best interests of the trust. NMAC 19.2.12. The necessary forms include either a NMSLO Application for Exploration/Development Water Easement or NMSLO Application for Water Easement, and potentially a NMSLO Water Rights Agreement.

More Information

Determine Which State and Federal Permits Apply

Use this overview flowchart and following steps to learn which federal and state permits apply to your projects.

Permitting at a Glance

New Mexico Federal

Water Right Agency: New Mexico Office of the State Engineer
Water Right Classification: Prior Appropriation None. Water rights classifications are defined at the state-level.
Geothermal Right Classification: Mineral and Water
Geothermal resources are classified similar to minerals if the water temperature is greater than 250 degrees Fahrenheit. However, use of the geothermal resources cannot impair existing water rights and all diverted ground water must be reinjected.
Geothermal resources are classified as water rights if the water temperature is less than 250 degrees Fahrenheit.
Geothermal resources include: #All products of geothermal processes, including indigenous steam, hot water, and hot brines; #Steam and other gases, hot water, and hot brines resulting from water, gas, or other fluids artificially introduced into geothermal formations; #Heat or other associated energy found in geothermal formations; and #Any byproducts. 43 CFR 3200.1.
Is a Water Right Required to Pump Geothermal Fluids? No, if the water is over 250 degrees Fahrenheit and all diverted ground water is reinjected as soon as practicable into the same ground water source, resulting in no new new depletions. Given the rights conveyed and the applicable definition of “geothermal resources,” developers do not need to obtain a state water right related to the extraction of hot water and brines that are part of the geothermal resource/formation. The right to extract water, brines, and fluids for the purposes of geothermal development is inherent in the rights conveyed under a federal geothermal lease.

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