A Rising Tide Sinks All Ships
By Patrick Patton, Vice President Product Management, B3 Insight
Take a drive east on State Road 128 from Jal, New Mexico, toward Andrews, Texas, and you’ll be traveling atop a portion of the Permian Basin, the largest proven oil reserves in the United States. This 45-mile stretch of highway cuts through the arid northern Chihuahuan Desert. Convoys of trailer trucks branded with corporate logos rumble steadily by. The flat landscape is littered with creosote bushes, power lines, metal tanks, and above ground pipelines, giving it the rugged, utilitarian look of a contemporary western. Grocery bags cling to the barbed-wire fence on both sides of the road, fluttering in the ever-present wind. Industrial activity hums in all directions, a constant reminder that energy in this state-line region flows from the ground into the veins of the global economy.
The town of Jal, NM, takes its name from the JAL Ranch, a 200,000-acre cattle operation established in the 1880s, whose brand, J-A-L, was tattooed into the hindquarters of livestock and eventually into the identity of the town. A region once dominated by cowboys and cattle trading is now prosperous with cowboys turned roughnecks and oil production.
You’ll hardly notice when you cross into Texas – the change in road signage, now reading TX State Highway 176, is the only indication you’ve left New Mexico. No sign marks the less obvious border you crossed a few minutes earlier – the geologic boundary between the Delaware Basin and the Central Basin Platform (CBP).
Both the Delaware and the CBP are formally sub-basins of the greater Permian Basin, the most productive oilfield in the world and the cornerstone of American energy independence. Hidden beneath the surface lies a mounting crisis – one that could destabilize global oil markets if left unresolved.
The Delaware Basin’s Growing Water Burden
Conterminous with oil production is water production – and the Delaware Basin produces more of it than any other oilfield on earth. Each day, the basin generates more than 13 million barrels (545 million gallons) of “produced water,” a byproduct of oil and gas production laden with high concentrations of salt, heavy metals, and hydrocarbons. Careful disposition is required. Saltwater disposal wells (SWDs), specifically drilled to inject this waste into deep underground formations, are the industry’s primary solution.
Traveling east from the Delaware Basin into the CBP, two things become immediately apparent. First, the geologic character of the subsurface changes – reflected at the surface by the noticeable lack of horizontal drilling rigs. Second, the number of SWD facilities increases dramatically on the Texas side of the border, particularly in Andrews County.
Since the start of 2025, 26 new SWD permits have been approved in Andrews County, nearly twice the number issued in nearby Martin County, Texas, one of the most active oil producing regions in the Permian Basin. In fact, over the past 12 months, Andrews County has had more SWD permits applied for and approved than any other county in the basin.
Why are injection well operators turning their attention to Andrews County? The explanation is twofold: regulation and capacity.
First, permitting SWDs in Texas is faster and far less restrictive than in New Mexico. That’s one reason why an estimated 3 million barrels per day of produced water originating in New Mexico are sent across the state line to Texas for disposal. That number continues to grow.
Second, SWD capacity is shrinking in the Texas Delaware Basin. Historically, shallow injection intervals in Loving, Reeves and Culberson counties (just south of the New Mexico border) have served as the convenient and cost-effective disposal region for interstate water from New Mexico. But those same shallow zones are reaching pressure limitations due to sustained high volume injection. This has resulted in reduced available capacity and rising operational risk. Put simply – space is filling up and without scalable water takeaway solutions, production in the Permian will slow.
Is the CBP the Next Frontier? Yes—But It’s Complicated
Operators are now flocking east to the CPB in search of available pore space—betting that geology, timing, and policy will align to give them the capacity they need to reliably dispose of produced water. The eastward migration isn’t just about availability, it’s about operational security and the assurance of long-term injection capacity. Pressurization of shallow injection intervals is rapidly becoming one of the most disruptive constraints for operators on both sides of the state-line. As subsurface pressure increases so too does the risk of groundwater contamination, drilling complications, and capacity driven curtailments.
Is the CPB the next disposal frontier? Not exactly. Geologically, the CBP is older, structurally higher, and its injection intervals are generally thinner. It also has far more historic oil and gas activity, meaning nearly twice as many wellbores penetrating disposal zones compared to the Delaware Basin. And while the CBP hasn’t yet seen the scale of water injection experienced in the Delaware Basin, it is not immune to pressure build-up or induced seismicity. It’s simply less impacted, for now. But the tide is turning quickly.
CBP geology may be permissive, but history is not always forgiving. Any large-scale shift of injection activity into the CBP must account for the legacy infrastructure woven into its subsurface fabric. The stakes are higher. Still, for operators needing new capacity without immediate curtailment risk, the CBP is starting to look like the safest bet.
This shift underscores a growing reality: the Delaware Basin’s ability to absorb water is finite. Capacity limits are already present in key areas. E&P operators, midstream providers and regulators are all grappling with how to ensure produced water takeaway doesn’t become the bottleneck for Permian oil and gas development. After all, if produced water cannot be managed, oil can’t be produced.
Recent declines in crude oil prices may temporarily slow the development pace across the Permian, but it won’t erase the constraints looming in the subsurface. A natural slowdown in drilling and completions could delay the most acute effects of limited disposal capacity, however the produced water problem isn’t a cyclical challenge, it’s a systemic one. When prices rise again, as history suggests they will, the industry will be forced to confront it head-on.
While some capital sprints east to secure pore space, policy struggles to keep pace. Without a coordinated regional water strategy, Texas will continue to shoulder the pressure created by New Mexico’s regulatory gridlock. And let’s not overlook the untapped capacity within New Mexico itself – abundant shallow pore space exists, but the political appetite for reform appears limited.
The Real Limiting Factor: Water
The move toward CBP injection reveals a hard truth: produced water is no longer just a byproduct – it’s the limiting factor in the future of oil and gas development. The Delaware Basin’s disposal capacity is finite – operators and regulators are having to adapt.
Andrews County may be booming, but that growth is underwritten by pore space – an underground resource as critical as hydrocarbons themselves. The CBP may offer short-term relief, but its long-term viability carries geological and historical baggage. Solving this challenge will require more than permits and pipe. It demands regional coordination, infrastructure investment, and a clear-eyed recognition that energy security and water management are now one and the same. And if production in the Permian slows, the effects won’t be confined to Texas or New Mexico, they’ll be felt in global crude prices, strategic reserves, and international energy diplomacy.
The Permian produced water problem won’t solve itself. It must be engineered – because the future of American energy production depends on it.
Related Products: Oilfield H2O | Subsurface Injection Pressure