SANTA FE —A bill that aims to establish a visionary Strategic Water Supply for New Mexico cleared its first legislative hurdle on Tuesday.

The House Agriculture, Acequias and Water Resources Committee passed House Bill 137 on a 5-4 vote. This is an important step toward realizing Gov. Michelle Lujan Grisham’s goal of ensuring that the state has enough water to support future economic growth without depleting or endangering its valuable freshwater supplies, part of her 50-Year Water Action Plan.

The bill now goes to the House Energy, Environment and Natural Resources Committee.

HB 137 would establish a Strategic Water Supply Program Fund, which state natural resource agencies would use to award grants and contracts for projects that will advance state, tribal or local economic development goals which reduce reliance on freshwater resources. Experts say there may be up to 650 trillion gallons of brackish water in New Mexico’s underground aquifers, and the state’s oil and gas industry generates more than 80 billion gallons of produced water every year. A strategic water supply is an innovative and resourceful way of safely treating that water and putting it to use for manufacturing and clean energy development projects that support good jobs and grow local revenue.

“The Strategic Water Supply will support clean energy and advanced manufacturing initiatives without putting our freshwater supplies at risk,” said Gov. Lujan Grisham. “I look forward to continued work with the legislature to advance the bill and secure the needed funding for the program.”

Once signed into law, HB 137 would establish the Strategic Water Supply program with important guardrails and immediate opportunities for eligible deep brackish water projects to secure funding through the program. Also, once produced water reuse rules are adopted by the Water Quality Control Commission, the bill provides for a new three cents per-barrel fee on the volume of produced water generated by industry while incentivizing more recycling and reuse by the oil and gas industry itself. Revenue from the produced water fee will go into the Strategic Water Supply Program Fund and be available for future projects.

Four state agencies — the Energy, Minerals and Natural Resources Department, the Environment Department, the Office of the State Engineer, and the Economic Development Department — will collaborate on the Strategic Water Supply to spur companies or other entities to develop projects to make treated produced or deep brackish water suitable for industrial use, while leaving more freshwater for people, crops, livestock and nature.

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