New Mexico’s vast number of depleted oil and gas wells — including those that no longer have owners on record — may be ideal tools for geothermal development or energy storage.
HB 361 would pave the way for those conversions to occur. The House Energy, Environment and Natural Resources Committee voted Tuesday in favor of advancing the legislation.
Bill sponsor Rep. Andrea Romero, D-Santa Fe, said the bill provides the opportunity to support entrepreneurship and innovation while also cleaning up the environment around the wells.
The bill targets wells that are inactive, which could include abandoned wells or wells that have reached the end of their useful lives.
Renewell Energy, a California-based company, is currently experimenting with turning depleted oil and gas wells into energy storage facilities. Renewell’s Director of Government Affairs Evan Taranta spoke to the committee about the potential of using the company’s technology in New Mexico.
Taranta said in California her company works with owners and operators of wells and those owners and operators remain responsible for decommissioning the well once it is no longer being used for energy storage.
HB 361 does not dictate who would be responsible for decommissioning the well. Instead, that would be determined through a rulemaking process should the bill become law.
In the case of orphaned or abandoned wells, there are no operators and owners remaining to decommission the well.
Taranta said Renewell fills the well with water—usually 7,000 to 9,000 gallons per well. She said a weight attached to a rope and a winch slowly drops through the water at some point during the day—usually when demand for electricity is high. As the weight drops, the process turns a motor and the power that is produced can be placed onto the grid. Later on, when there is less demand for electricity, the weight is pulled back to the top.
“It’s just a mechanical battery, essentially,” Taranta said.
Renewell’s process is one option that HB 361 would allow. It could also allow the wells to be repurposed for geothermal energy production, though the bill’s fiscal impact report notes that the areas of the state with the most geothermal potential do not necessarily overlap with oil and gas producing regions.
Mike D’Antonio with Xcel Energy—which owns the utility Southwestern Public Service Company—expressed support for the legislation.
“In our service territory, we have an extreme need for power,” he said.
Matthias Sayer, an attorney who previously served as deputy secretary of the state’s Energy, Minerals and Natural Resources Department, described HB 361 as “a real, innovative opportunity and solution to a problem that I’m sure this committee has looked at over the years, which is inactive wells.”
He said it could also help address electricity shortages in New Mexico.
While Republicans such as Rep. Rod Montoya, R-Farmington, and Rep. Mark Murphy, R-Roswell, voted against the legislation, they both expressed some interest in seeing it move forward in the future. Murphy said there are a few changes he’d like to see in the bill regarding fees and financial assurances.
Montoya said he wants more time to learn about the processes and was disappointed that the topic wasn’t discussed during the interim legislative committee meetings.
“Let’s say I’m supportive of the concept. I think it does potentially answer questions that we have…with some of these wells,” Montoya said.
