On March 12, 2015, the New Mexico Oil Conservation Commission formally approved a revision to the Commission's produced water regulations.  The revised Rule repeals and replaces existing Rule 34, which regulates the disposition of produced water, and enacts a new rule regulating the reuse and recycling of produced water to reduce reliance on fresh water for well completions. The rule was approved by OCD Order Number 15239, and became effective March 31, 2015.

The revised rule tailors the definition of produced water to the statutory definition in the Oil and Gas Act, which grants the Commission authority to regulate the disposition of produced water. NMSA 1978, §70-2-12(B)(15).  The new rule broadens the scope of the previous rule on permitting and disposal of produced water to now govern "the transportation, disposal, recycling, re-use or the direct surface or subsurface disposition by use of water produced or used in connection with the development or production of oil or gas or both; in road construction or maintenance, or other construction; in the generation of electricity or in other industrial processes." 19.15.35.2 NMAC (March 31, 2015).

The new rule is intended to promote water conservation by encouraging the reuse and recycling of produced water through the regulation of facilities that store, treat and recycle water for use in drilling, completion, production or plugging oil and gas wells.  The rule includes siting, design, construction, operation, closure and reclamation requirements for produced water containments based on standards for multi-well fluid management pits in Rule 17.

Under the new rule, a permit is not required for the use or reuse of produced water for drilling, completion, production, secondary recovery, pressure maintenance or plugging of wells.   A recycling containment facility must be registered with the New Mexico Oil Conservation Division and operated for up to five years, subject to annual renewal.  Operators are also required to notify the surface owner when filing its registration form with the Division.