New Mexico Legislators Seek Cleaner Transportation Fuels, Would Follow West Coast’s Lead

February 15, 2024

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by Morgan Lee (Associated Press) New Mexico’s Legislature has approved a bill aimed at reducing climate-warming pollution from cars and trucks through financial incentives to reward businesses that produce cleaner fuels.

The Senate voted 26-15 Tuesday, on a party-line vote with Republicans in opposition, to send the bill to Democratic Gov. Michelle Lujan Grisham, who supports the initiative.

California, Oregon and Washington already enforce low carbon fuel standards. New Mexico would be the first to follow suit.

The bill calls for a reduction in the intensity of greenhouse gas emissions for transportation fuels used in the state — of 20% by 2030 and 30% by 2040.

It would require producers of high-polluting fuels to buy credits from producers and importers of low-carbon fuels.

The program and its market for carbon credits would be established by mid-2026, with oversight by the state Environment Department.

Democratic sponsors of the bill anticipate it will spur investments in new fuels and new technologies. The transportation sector is the second largest source of greenhouse gas emissions in New Mexico behind the oil and natural gas industry.

State Sen. Mimi Stewart of Albuquerque rattled off a list of more than 20 companies and coalitions including Chevron that have expressed interest in the low-carbon fuel market under the proposed reforms. She also touted the health benefits through anticipated reductions in airborne pollution that contribute to ozone.

Earlier this month, the bill narrowly won House approval on a 36-33 vote amid concerns about impacts on fuel prices on consumers in the nation’s No. 2 state for oil production.

“I am concerned about what this bill will do to the price of transportation fuel,” Sen. Greg Nibert of Roswell said during Tuesday’s Senate floor debate. “It’s going to be felt the harshest by those who have the least, who can least afford these transportation fuels.”

Bill cosponsor and Democratic state Rep. Kristina Ortez of Taos pushed back against those worries.

“We believe this is fear mongering,” she told a Senate panel Tuesday. “I come from a district that is very poor. I certainly would not bring a bill that would have an impact on my constituents and New Mexicans.”

Republican Senate Leader Greg Baca of Belen cautioned legislators against imposing new pollution regulations on rural communities with clear skies in a sparsely populated state.

“Let’s use common sense ... not this voodoo science that’s being produced for us telling us that we have dirty air in this state in a populace of only 2 million, that we’re somehow contributing to this global catastrophe that’s being pushed on us.”

Separately, a final House concurrence vote sent a $10.2 billion budget plan for the coming fiscal year to the governor for consideration and possible line-item vetoes.

New Mexico would set aside well over $1 billion to guarantee tuition-free college and sustain government spending in case its oil production bonanza fades in the transition to cleaner energy sources, under the general fund spending bill. READ MORE

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New Mexico Clean Transportation Fuels Standard Passes Senate Bill Now Heads To Governor (Biofuels Digest)
Clean Transportation Fuels Standard Passes Senate (Grant County Beat)
New Mexico Fourth State To Pass Clean Fuel Standard (Biodiesel Magazine)
OPINION: Clean fuel standard would reduce emissions, not increase gas prices (Albuquerque Journal)
Clean Transportation Fuel Standards bill clears Senate committee (New Mexico Political Report)
New Mexico Senate passes Clean Transportation Fuel Standard, bill headed to governor’s desk for signing (New Mexico Environment Department/Biobased Diesel Daily)

Excerpt from Biofuels Digest: The legislation had unusually broad support, including clean fuels industry, oil companies, NM Native Votes, electric utilities, the Chamber of Commerce, The New Mexico Gas Company, health and human welfare advocates like New Mexico Voices for Children, and many environmental groups including Sierra Club, NRDC, SWEEP, and Conservation Voters of New Mexico.

The broad support shows that the bill was widely seen as a common-sense solution to lower emissions, reduce impacts on human health and welfare, introduce fuel market competition, and spur economic growth for New Mexico.

With new fuels made from renewable sources such as agricultural or waste products like manure and used cooking oil, or electricity, consumers will have broader access to cleaner and more sustainable fuels that are independent of the volatile crude oil market.

According to the Low Carbon Fuels Coalition, the bill has three major benefits: one, it will clean up the fuels used in our cars and trucks today and in the future; two, it will spur investment in low and no-carbon fuels in New Mexico; and three, it will provide drivers with renewable fuel options at the pump, creating price competition for gasoline and diesel and resulting in lower-priced options during crude oil spikes. The bill will also provide strong encouragement for additional electric charging stations across New Mexico, including in rural areas, which will significantly expand the number of households that can opt for an electric vehicle.

Reaction from the stakeholders

“It is very gratifying that my Senate colleagues have seen fit to pass the bill and send it to the Governor,” said Senator Mimi Stewart, President Pro Tempore and a co-sponsor of the bill. “This legislation will make a huge contribution to cleaner air for our state and a reduction in greenhouse gases. It shows that our state is moving in the right direction and establishes New Mexico as a leader in decarbonizing transportation fuels.”

Camilla Feibelman, Sierra Club Rio Grande Chapter Director, explained the significance of passing HB 41: “This bill is an important complement to state rules established last year that will bring more electric vehicles to New Mexicans who want to take action on climate change. This program will drive electrification and puts New Mexico at the forefront of reducing greenhouse gas emissions from transportation.”

“Not only will having a Clean Transportation Fuel Standard combat climate change and lead to cleaner air, but it will also give consumers more choices and make our fuel market more competitive,” said sponsor Rep. Kristina Ortez (D-Taos). “Reducing the carbon intensity of our transportation fuels is a win for the environment, our economy, and every New Mexican driver.”

A primary advantage of the Clean Transportation Fuels Standard will be that it incentivizes bringing cleaner fuels to market to diversify the sources of energy used in transportation, according to Robin Vercruse, executive director of the Low Carbon Fuels Coalition. “Experience shows that clean fuel standards result in lower-priced fueling options for consumers when gasoline prices rise due to the latest geopolitical drama, demand spike, or supply crunch in the market,” said Vercruse. The fundamental design of this legislation will be to create a credit market. The carrot-based approach is a strong motivator for producers of low- or no-carbon fuels to set up in New Mexico, potentially sparking a major economic boom for renewable fuel manufactures in the state. It will ultimately introduce fuel market competition.

“The Clean Transportation Fuels Standard will increase biodiesel availability throughout the state, offering New Mexicans the benefit of alternative fuels at a competitive price and reduced air pollution,” said Jed Smith, COO of Rio Valley Biofuels. READ MORE

Excerpt from Biodiesel Magazine: While renewable fuels took center stage in HB 41 testimony, the interest in accelerating local investments and health benefits also received significant attention. Just considering the biogas sector, according to the ABC, New Mexico currently has 16 operational systems but the potential for at least 144 new systems to be built. If constructed, the biogas sector could generate over $400 million in new investments, 3,600 construction jobs, and 239 permanent jobs. Furthermore, considering that 1 in 7 New Mexicans suffers from air-related health issues, according to the American Lunch Association, this bill is expected to significantly reduce healthcare costs in the state. READ MORE

Excerpt from New Mexico Environment Department/Biobased Diesel Daily: For more information on the legislation, including the bill text, committee reports and analysis, click here. READ MORE