I am writing today to announce the closure of the New Mexico Independent. After three and a half years of operation in New Mexico, the board of the American Independent News Network, has decided to shift publication of its news…
Funds drying up for N.M.’s new water sources
It will take tens of millions of dollars to turn any of the three reported supplies of brine into water fit for human consumption, and neither private nor public sources of money appear to be overflowing these days.
All three organizations that want in on the brackish-water boom are confident the money will be found, simply because there’s not enough water now and demand is only going to increase. But, according to Peter Sanchez of Atrisco Oil & Gas LLC, one of the prospective water businesses, “I don’t think it’s going to be easy, simply because of the economic climate.”
The water is there. Drillers have tapped into two distinct brackish-water deposits at least 2,500 feet deep in the Rio Puerco basin and a third deposit is suspected from geological survey data. Because the Office of the State Engineer has no jurisdiction over water that deep, it belongs to whomever can pump it out and use it. Ideas include selling the water locally to allow continued growth in the Albuquerque metro area as well as pumping it through pipelines to thirsty communities as far away as Phoenix or Las Vegas, Nev.
But those hoping to enter the water business are learning that the tricky part is not finding the water, but paying for it. Not only will it be energy-intensive to pump the water and purify it, there’s the additional cost of disposing of thousands of tons of salt or brine that result from desalination. Even the simplest plans will require millions of dollars of investment.
Sandoval County appears to be the furthest along among the “desal” dreamers. Since its test wells hit paydirt earlier this year, the county has made steady progress toward its ultimate goal — providing a clean source of water for Sandoval County communities into the next century. But it’s shaping up to be a long march, said Guy Bralley, the county’s water planner.
“We’re trying to keep it going along,” he said, referring to ongoing tests of its water deposit to determine whether it’s the mother lode or fool’s gold. “We’re trying to be a little more deliberate than this land rush that’s going on south of us.”
Preliminary results about the deposit’s volume have been promising — they spurred a Sandoval County commissioner earlier this month to claim it would yield nearly 1.5 trillion gallons of drinkable water. But Bralley said a more important test regarding the future of the project is being conducted now. Over the next month or two, sensors will determine how fast the water moves through the rock, gravel or sand deep below to recharge the reservoir around each well. The experts want to see the water moving quickly, he said.
Another analysis is looking at the age of the water coming out of the ground, Bralley said. “If you know the age of the water, and then see it come down over time, it’s probably because [the deposit] is being infused with new water,” he said.
This begs the question of where the new water is coming from, and whether the deposit is somehow connected to another aquifer, he added.
As testing continues, “[Y]ou could live well for a year on what we pay just on lab tests,” Bralley said.
The county is now attempting to move ahead on the next major step: It wants to hire a firm to design a desalination plant. The planning work alone is expected to cost $4.6 million, Bralley said, and the county is looking to the state Water Trust Board for the money. The board nixed an earlier request.
In better times, state money to fund the project might be easier to come by. But in light of the unexpected budget crunch caused by falling oil and gas revenue, there’s a question about whether the Legislature will be able to appropriate that much to get the Sandoval County project rolling, Bralley said.
And once the planning is done, the county and its business associate, Recorp Partners Inc., would need an estimated $20 million to $40 million to build the desalination plant itself.
Atrisco Oil & Gas is looking to both the public and private sectors for the several million dollars necessary just to conduct tests of its find west of Albuquerque, said Sanchez, the company CEO. The company’s drilling partner hit water while searching for natural gas earlier this year, but additional testing is necessary to determine the size, volume and other characteristics of the deposit, he said.
Sanchez estimated testing will cost several million dollars, and while the company has had promising conversations with potential investors, he said, “Everybody is having trouble lending money at the moment.”
The testing phase could be the linchpin to the whole project, Sanchez said. Then Atrisco will know how much water it has and whether the deposit is hydrologically connected to other deposits above or below, and it will have a better idea of how much it will cost to purify the water.
“Once we get through testing it’s going to be much easier” to round up financing, he said. “You’ve attached a dollar amount to the project.”
Paul Powers also has his eyes on a brackish-water deposit farther south than the other two, but he said he’s stuck in neutral until investors start spending money again.
“It looks good except for the financing,” he said of his plan to drill wells southwest of Albuquerque and sell the water. “Funding is a little slow to come by.”
His Commonwealth Utilities Inc. expects to spend $30 million on the first phase of the project, which would include two deep wells and a desalination plant, he said. Expanding the operation to its ultimate goal of producing 110,000 acre-feet per year — slightly more than Albuquerque currently uses — would run to $500 million, he said. Eventually, Powers said, he could build a water pipeline to wherever there was a buyer.
State Engineer John D’Antonio tried earlier to get the Legislature to close a loophole in state law and give him authority over the brackish water, but legislators balked. Now he has little say over the competing projects, which has led some to suggest there could be a Klondike-style gold rush for water.
Sanchez said he’s not worried that another company will try to jump any of the water claims and said he isn’t particularly worried about the competition posed by Powers and Sandoval County.
“We live in a community that doesn’t have a lot of water, and it’s people like Powers, Sandoval County and us that are presenting this area with a new resource,” he said. “It doesn’t matter (to Atrisco) to have these three finds around us. We have a shortage and these kinds of finds will help fill that gap.”
All they need is funding.