Carbon Management in New Mexico

New Mexico is positioning itself as a national leader in carbon management, leveraging its geological storage potential, existing CO₂ infrastructure, and active participation in enhanced oil recovery (EOR) operations. As fossil fuel emissions remain a significant contributor to the state’s greenhouse gas (GHG) profile—especially from the oil and gas sector—carbon capture, utilization, and storage (CCUS) offers a viable pathway for emissions reduction while supporting economic activity.

Existing Infrastructure and Leadership

New Mexico has one of the largest and most developed CO₂ pipeline networks in the country. Carbon dioxide from the Bravo Dome and other sources is transported to the Permian Basin for EOR, where it is injected into depleted oil fields to enhance production while sequestering CO₂ underground. In 2023, the state ranked second nationally in CO₂ sequestration, accounting for 32% of total U.S. sequestration activity.

This infrastructure makes New Mexico a strategic hub for future CCUS initiatives, enabling both short-term emission reductions and long-term storage capabilities.

Class II and Class VI Injection Wells

Carbon management activities in the state are divided into two main categories under the EPA’s Underground Injection Control (UIC) program:

• Class II Wells: Used for Acid Gas Injection (AGI) and EOR. These wells inject CO₂ (often mixed with H₂S) into deep geologic formations. Operators benefit from the federal 45Q tax credit, which incentivizes permanent sequestration.

• Class VI Wells: Designed specifically for long-term CO₂ disposal from industrial and hard-to-abate sectors. The San Juan Basin, with its favorable geology, is a focus area for future Class VI development. The Navajo Transitional Energy Company (NTEC) and New Mexico Tech (NMT) are leading feasibility and characterization studies in the region.

New Mexico is also seeking primacy from the EPA to oversee Class VI wells directly, which would streamline permitting and oversight.

Direct Air Capture (DAC) and Emerging Technologies

The Four Corners region has been identified as a promising location for Direct Air Capture (DAC) due to its proximity to suitable CO₂ storage formations. DAC facilities remove CO₂ directly from the atmosphere and store it underground. Projects like the 1PointFive DAC plant across the border in Texas demonstrate regional momentum in this space.

Data and Monitoring

The EPA’s Greenhouse Gas Reporting Program (GHGRP) provides data on CO₂ sources, storage sites, and pipeline infrastructure. New Mexico’s contributions are prominently featured in national reporting, including both EOR and dedicated storage projects.

Challenges and Opportunities

Key challenges include water use in some carbon management technologies, regulatory hurdles, and the need for public acceptance—especially in areas historically impacted by energy development. However, with strong institutional support, geological resources, and federal incentives like the 45Q tax credit, carbon management is poised to become a cornerstone of New Mexico’s energy transition.