A. Unless otherwise provided by law, a contract, bill of sale or other legally binding document:

(1) all produced water that is produced from an oil or gas well is the responsibility of and under the control of the working interest owners and operator of that oil or gas well. The working interest owners and operator shall have a possessory interest in the produced water, including the right to take possession of the produced water and to use, handle, dispose of, transfer, sell, convey, transport, recycle, reuse or treat the produced water and to obtain proceeds for any such uses. The operator of the oil and gas well that the produced water is produced from shall handle the use, disposition, transfer, sale, conveyance, transport, recycling, reuse or treatment of the produced water as a reasonably prudent operator;

(2) when produced water is transferred, sold or conveyed to another operator, transporter, pipeline, midstream company, plant, processing facility, refinery or entity that provides recycling or treatment services for produced water, the transferee shall have control of and responsibility for the produced water until the water is transferred to another operator, transporter, pipeline, midstream company, plant, processing facility, refinery or recycling or treatment facility. A transferee shall have a possessory interest in the produced water, including the right to use, possess, handle the disposition of, transfer, sell, convey, transport, recycle, reuse or treat the produced water and to obtain proceeds for any such uses. Upon transfer of the produced water, transferees shall be liable for the use, disposition, transfer, sale, conveyance, transport, recycling, reuse or treatment of the produced water; and

(3) when an operator of an oil or gas well or a transferee listed in Paragraph (2) of this subsection takes possession of produced water for the purpose of recycling or treating the water, the operator or transferee may transfer recycled or treated water, treated product or any byproduct to another operator, transporter, pipeline, midstream company, plant, processing facility, refinery or entity that provides recycling or treatment services for produced water. Upon transfer, the transferee shall have control and responsibility for the produced water, recycled or treated water or treated product or byproduct. A transferee shall have a possessory interest in the produced water, recycled or treated water or treated product or byproduct, including the right to use, possess, handle disposition of, transfer, sell, convey, transport, recycle, reuse or treat the produced water, and to obtain proceeds for any such uses. Upon transfer, a transferee shall be liable for the use, disposition, transfer, sale, conveyance, transport, recycling, reuse or treatment of the produced water, recycled or treated water or treated product or byproduct.

B. Subsection A of this section only applies to transfers of produced water between an operator, transporter, pipeline, midstream company, plant, processing facility, refinery or recycling or treatment entity and shall not affect liability in an action brought by other persons for damages, including damages for personal injury, death or property damage, arising from exposure to produced water, recycled or treated water or treated product or byproduct.

C. A permit or other approval from the state engineer is not required for the disposition of produced water, recycled water or treated water. The disposition of produced water, recycled water or treated water, including disposition by use, is neither an appropriation of water for beneficial use under Chapter 72 NMSA 1978 nor a waste of water, and no water right shall be established by the disposition of produced water, recycled water or treated water.

D. For uses regulated by the water quality control commission pursuant to the Water Quality Act [Chapter 74, Article 6 NMSA 1978], a person shall obtain a permit from the department of environment before using the produced water, the recycled or treated water or treated product or any byproduct of the produced water.

History: Laws 2019, ch. 197, § 4.

Effective dates. — Laws 2019, ch. 197, § 13 made Laws 2019, ch. 197 effective July 1, 2019.

Applicability. — Laws 2019, ch. 197, § 12 provided that the provisions of Laws 2019, ch. 197 apply to contracts entered into on and after July 1, 2019.