Dirty Hands and Dirty Water
Is it okay if the oil and gas industry benefits from green energy policy?
New Mexico potentially faces a bleak future, as far as water is concerned. The semi-arid state depends on winter snow pack and summer monsoon rains, both of which are anticipated to disrupted by climatic changes. Reductions in surface water flows could eventually reach 750 thousand acre-feet, or a little under a quarter of the state’s current water usage.
In January of this year, Democratic Governor Michelle Lujan Grisham unveiled the Strategic Water Supply (SWS), a state proposal to bridge this shortfall by tapping two unconventional water resources. The first is a vast supply of brackish waters, reservoirs that are normally far too salty or otherwise contaminated to use. New Mexico has on the order of 15 billion acre-feet of brackish waters
The second source is more controversial: Produced waters. These are the wastewaters “produced” by the state’s oil and gas extraction. Each 42-gallon barrel of oil in the state is paired with between four and seven barrels of water. The total amount is not huge, but rather a sizable hundred thousand or so acre-feet per year.
The governor’s plan aims to take advantage of the oil and gas industry’s desperate need to manage its growing wastewater problem. Lujan Grisham has asked for $500 million to commercialize recycling technologies and infrastructure and line up water-demanding green industries as purchasers of the cleaned-up produced waters, with the likely intention of eventually pivoting to brackish waters as the states’ oil and gas wells start to run dry.
Not so fast, argues some critics. Julia Bernal, the director of Pueblo Action Alliance, calls the SWS a “bailout for the oil and gas industry.” Environmental nonprofit New Energy Economy claims the Governor’s plan amounts to “poisoning our well for private profit.” To many of these groups, this plan, and literally any other, that doesn’t push for the immediate phase out of fossil fuels, is a “false solution.”1
There are problems with Luhan-Grisham’s proposed SWS, challenges that we have already started to dig into and will continue to examine in the coming months. But what I want to touch on here is the similarities to the case of Grizzly Bear reintroduction that I wrote about two weeks ago. For all the SWS’s faults, which I’ll get to, it at least gets one thing right: It seeks to partly reconcile, however clumsily, the interests of one of the state’s biggest industries with environmental goals. In their hopes for a purification of politics, a realization of their personal ideal, opponents are missing an opportunity to get much of what they want.
The Fuel Efficiency Alliance That Wasn’t
It is easy to forget how car mileage standards came about. In the light of the salience of today’s environmental challenges, it is tempting to tell a just so story about it being a hard-fought victory by nature’s advocates. Really, its aim was to save Detroit’s auto industry.
The first Corporate Average Fuel Economy (CAFE) standards were passed at the behest of the United Auto Workers and Detroit car companies in 1975. It was an era of soaring gasoline prices and fierce competition from up and coming Japanese automakers. Combating air pollution was simply the environmentalist icing on an otherwise appetizing special-interest cake.
Yet when environmental left sticks intransigently to their vision of the environmental ideal, they don’t necessarily get what they want.
Fuel efficiency increased dramatically through the 70s and early 80s, but then stalled out. An exception for light trucks created a perverse incentive that spurred the rise of the SUV, counteracting the previous efficiency gains made with sedans and coupes.
In the renewed conflict over mileage standards, environmentalists greatly overestimated their clout, thinking they could go at it alone. As Michael Shellenberger and Ted Nordhaus pointed out, that merely turned the issue “into a zero-sum game in which either the environment…or the autoindustry…would win.” But environmentalists typically only succeed in political trench warfare when they have an especially advantageous legal position, such as when enforcing Endangered Species Act protections or when intervening in nuclear power plant’s construction. And even then, they’re far better at stopping things they don’t like than bringing about what they say they want. Unsurprisingly, CAFE standards remained roughly unchanged for two decades.
Fortunately, mileage standards started moving again in 2007. It was driven by similar worries as were present in the 1970s. Oil prices were once again hitting record highs, diminishing the attractiveness of the SUVs and trucks that US automakers had prioritized. What was different this time was that higher mileage standards offered a path to make good on carbon emission commitments made by the Obama administration. The need for an industry bailout in 2009 and renewed industry competition from Asia gave him the leverage to make it happen.
This isn’t simply another lesson about the perils of political purism. It is about the oft-repeated mistake in thinking made by activists of all stripes. Their conviction, their sense of moral righteousness, blinds them to the reality that people invariably interpret reality differently. Environmentalists are too often “naïve realists.” Bathed in the seemingly self-evident rightness of raising mileage standards tout court, they failed to engage in basic political strategizing. What do my current opponents really care about? And how might I negotiate with them so that we both get some of what we want?
But neither having “science” on your side nor a seemingly overwhelming moral case makes political opponents’ power go away. The hope that *our* beliefs are so indisputable that we no longer have to compromise is self-stultifying.
Accepting (Partial) Defeats on the Path to Victory
To be frank, I am also wary of Lujan Grisham’s SWS plan. I worry that it tries to do too much, too fast. Michael Bouchey and I responded to the state’s Request for Information and said just as much. Recycling brackish and produced waters in an energy efficient and clean way is a hard enough technical and regulatory problem (nearly all treatment technologies leave behind a highly contaminated “condensate” to deal with). Adding the challenge of attracting and growing a home-grown green technology industry, while keeping the public on your side, adds still more layers of unpredictability.
Nevertheless, we should recognize that the state has a unique opportunity. Oil and gas production is through the roof, leaving the state flush with cash. But all that production has left the industry awash in produced waters that is becoming ever more difficult to dispose of. Firms face new limits when it comes to disposing of it. Injecting the water back underground can lead to earthquakes. New rules to prevent induced seismicity will essentially force oil and gas firms to invest in water recycling.
Simply put, the state has the money to subsidize new green ventures, a potential resource in the form of recycled waters, and rare leverage on the oil and gas industry. While there’s no guarantee that the SWS would succeed, it is smart environmental politics. The state has recognized that the Permian Basin deposits will eventually be tapped out. If New Mexico can kick start alternative industries while also creating a technological basis for turning the state’s plentiful brackish reservoirs into usable water, the state can help avert a lot of future economic pain.
No doubt that there’s an important place for environmentalists in all this. We need people who care deeply about the environment to hold the state accountable. But it is equally important to note that those people will have a different vision of the good society than other citizens. And it is often one where oil and gas firms are an unquestionable moral blight on the world and the answer to all our ecological and social problems entails living in better harmony in nature.
Yet when the environmental left sticks intransigently to their vision of the environmental ideal, they don’t necessarily get what they want. In the legislative session, the governor’s proposal was cut to $100 million and recycling oil and gas produced waters taken off the table. Then it failed to make it to a vote. However, the short-term outcome will be the continuation of the status quo, not a sudden about-face to make the state run on pure renewable energy. It looks like CAFE standards all over again.
Ironically, the SWS proposal offered a potential pathway to achieve what NM environmentalists say they want: The eventual reduction of the political power of oil and gas firms. Were the state able to build local green industries and shift from treating produced waters to pumping brackish reservoirs, the political landscape in New Mexico would become far more diverse and pluralistic. An ostensible “handout” to oil and gas interests could be deft strategy, a way to get those industries to help support their eventual competitors. That outcome is, no doubt, far from guaranteed. But we have little hope of realizing it if we don’t even try.
As I was drafting this post, I received an email from “Reboot Our Democracy.” It’s an offshoot of the “Indivisible” movement that sprung up after Trump was elected in 2016. In any case, it was an invite to a rally in Santa Fe on May 6th to protest the state’s Produced Water Act. What caught my eye was the following claim:
The draft Wastewater Reuse Rule (WQCC 23-84) at the Water Quality Control Commission is the next step in that long term effort, seeking to set definitions and permitting processes that will pave the way for expanding that effort to demonstration and industrial projects that require only a Notice of Intent and include no water quality or treatment standards for “reus[ing] produced water on agriculture, irrigation, potable water supplies, aquifer recharge industrial processes or environmental restoration.”
The Act is publicly accessible, so you can read it for yourself. Its main purpose is to make produced waters into a legal thing, something that could be regulated, whereas before it lived in a nebulous gray area. There are few details about water treatment standards mainly because rulemaking is still evolving, to be determined in light of expert guidance and public input that the state has been very openly seeking. What the Act doesn’t do, and neither does the draft rule, is exempt projects from regulation. It explicitly states,
“[the rule] prohibits any person from conducting a demonstration project or industrial application involving treated produced water unless and until the Department has received a notice of intent and made a determination that no permit is required because there will be no discharges that can move directly or indirectly into groundwater or a surface water of the state.” (emphasis added)
We can quibble about whether the state will adequately follow through with determining that pilot project waste will pose no risk to ground or surface waters, but what is being claimed by NM environmental groups is deliberately misleading. No discharge permits required, because all projects that require one will be rejected by the state. Although I long ago recognized that people on *my side* of politics are equally capable of the same kind of truth bending as people on the far-right, this really irked me.
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