In April 2025, the State of New Mexico signed the Strategic Water Supply Act (HB 137) into law as a 50-year Water Action Plan component. The 50-year Water Action Plan focuses on Water Conservation, New Water Supplies, and Water and Watershed protections.
The bill designates a $75 million strategic water supply program focusing on the state’s most immediate water scarcity issues, wastewater management, and environmental protection. More specifically, SB 137 expands the states’ implementation of water management strategies to increase resiliency to water shortages, initiative-taking measures focusing on future freshwater resources like brackish water projects, and research on underground aquifers.
Key Areas of Focus
As increased temperatures and drought conditions in New Mexico become commonplace, HB 137’s primary focus is addressing the increasing water scarcity concerns. The newly established Strategic Water Supply Program Fund establishes two key areas of focus to increase resiliency and water availability to ensure the future of New Mexico’s water supply through:
1) Brackish Water Projects ($50 Million)
The Brackish Water Project investments will create more diverse water sources for the state that were not previously accessible without treatment and focus on treating and reusing water with high salinity levels. For example, these projects will focus on water treatment for drinking and irrigation applications and create opportunities for future economic development.
2) Underground Aquifer Research ($28.8 Million)
Investments in research and monitoring underground aquifers will help New Mexico better understand the state’s groundwater resources and identify opportunities to manage the existing critical resources effectively. The New Mexico Institute of Mining and Technology will lead the effort to map and monitor the groundwater resources, collecting essential data and providing insights to support the establishment of long-term statewide water management procedures.
Prioritizing Public Health and the Environment
In addition to the proactive measures that HB 137 establishes, it is also important to note that provisions for reusing produced water from fracking are not a part of the bill’s final version. The decision to remove the provision is to protect public health and the environment, prioritizing the prevention of potential contamination from produced water for future generations and expanding New Mexico’s strategic water reserves. The change will reduce the potential risk of contamination of soil and water resources. However, it can limit the potential for reducing wastewater generated in the energy production sector and lowering overall energy costs.
Establishment of Fees on Produced Water Disposal:
Furthermore, SB 137 puts a new dedicated revenue generation model in place through a 3-cent fee for each barrel of produced water disposed of in New Mexico to account for the environmental considerations associated with produced water disposal. The revenue generated from the fee will fund water supply projects and management initiatives down the road.
In Conclusion
The 2025 New Mexico Legislative Session outcomes have laid a solid foundation for the future of New Mexico’s water resources, starting with HB 137 as a crucial step in New Mexico’s plan for its water future to address water scarcity concerns. The removal of produced water reuse provisions potentially limits economic and water reuse opportunities; it shows a deep commitment to protecting overall public health and the environment. Furthermore, HB 137 is key to the broader water and environmental legislation passed in 2025; Senate Bill 21 creates and funds a surface water permitting program, and Senate Bill 37 expands the uses of the Strategic Water Reserve. These three bills come together to give New Mexico greater control over the future of its water resources.
Source: HB 137 – STRATEGIC WATER SUPPLY ACT
Written by: Andrew Kalemba, Operations Specialist at the Southwest EFC
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