Combine all ingredients in a nonreactive 2-quart saucepan over medium heat. Bring to a simmer and cook until jalapeños are very soft, about 25 minutes. Remove from heat and allow to steep for 30 minutes; remove bay leaves. Can jalapeños in sterile quart-size jars or place in plastic containers in the refrigerator. Try to resist eating them and store for 2 weeks before using so the flavors develop well.