I analyzed and interpreted magnetotelluric data from 10 locations in the Española basin, New Mexico. These data were collected during the SAGE (Summer of Applied Geophysical Experience) program from 1994 to 1996. Two important features are the Velarde graben and a conductor at a depth of approximately 22 km. The graben is approximately 3 km deep and 10 km wide, with a steeper northwest side. I believe that the graben was formed by the NW-SE spreading that has been taking place in the center of the Española basin for about 13 Ma. Motion on the Embudo fault zone appears to be mainly dip-slip near the study area. The cause of the deep conductor is probably saline fluid or graphite. The expected salinity of fluid would provide low resistivity (about 1 ohm-m for fluid). For a fluid volume of 1-4%, some connectivity of fluid should occur, especially if the fluid lacks CO2. This moderate connectivity would allow low bulk rock resistivity. A horizontal, stronger rheology at the brittle-ductile transition may trap water beneath it for geologically long periods of time. Graphite may form when carbon precipitates out of deep crustal fluids or when organic matter is metamorphosed, and only 100 ppm is necessary to produce very low rock resistivity if it is interconnected.