New Mexico Senate Passes 'Clean Fuel Standard.' Lujan Grisham's Climate Agenda Advances

February 07, 2022

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by Adrian Hedden (Carlsbad Current-Argus) A bill that would see less pollutive fuel for cars and trucks passed the New Mexico Senate Thursday and will now go before the State House of Representatives for consideration.

If Senate Bill 14, the Clean Fuel Standard Act, passes the House, its next stop will be Gov. Michelle Lujan Grisham’s desk to be signed into law.

SB 14 previously passed the Senate Tax, Business and Transportation Committee Jan. 19, and then the Senate Finance Committee on Wednesday.

Before the full Senate, the bill received a passing vote of 25-16.

Sponsored by Sen. Mimi Steward (D-17), the bill would require producers of transportation fuel like gasoline of diesel to decrease the carbon emissions each year.

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It would not apply to fuel retailers like gas stations, but also incentivize the development of charging stations for electric vehicles throughout New Mexico. READ MORE

Bills targeting air pollution see early success in 2022 New Mexico Legislative Session (Carlsbad Current Argus)

'Clean fuel standard' sought again by lawmakers to reduce pollution from cars and trucks (Carlsbad Current Argus)

Lawmakers table bill to expand hydrogen power in NM amid environmental concerns (Carlsbad Current Argus)

New Mexico partners with Los Alamos, Sandia national labs to develop 'clean' hydrogen power (Carlsbad Current Argus)

New Mexico Senate passes Clean Fuel Standard Act (Biomass Magazine)

New Mexico Senate passes Clean Fuel Standard Act (Biodiesel Magazine)

House deadlocks on Clean Fuel Standard Act, which fails on tie vote (NM Political Report)

MY VIEW CHET THOMPSON: A clean fuel standards bill will raise driving costs (Santa Fe New Mexican)

Excerpt from Carlsbad Current Argus: During the six-hour committee hearing that was exclusively focused on HB 4, oil and gas industry leaders and economic development officials voiced support while environmentalists argued against hydrogen development as perpetuating fossil fuel pollution.

A draft of HB 4 was released publicly in November 2021 and drew immediate criticism from New Mexico’s environmental community, with groups arguing hydrogen power still represented a fossil fuel as most present hydrogen energy in the U.S. is generated through the burning of natural gas.

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New Mexico Environment Department (NMED) Cabinet Secretary James Kenney said the version of the bill introduced Tuesday in the legislature was altered to alleviate some of those concerns.

The carbon intensity (CI) limit imposed on projects in the previous bill for them to qualify for incentives as lowered from 9 to 4, Kenney said. After July 1, 2028, it would lower further to a CI maximum of 3, per a fact sheet released by NMED.

Carbon intensity would also be considered throughout the supply chain, Kenney said, meaning if a project used extracted natural gas, it’s production and transportation would be included in the CI rating.

He said the highest tax incentives would be prioritized for “carbon-negative” hydrogen projects that could sequester carbon emissions or absorb it from the air.

Hydrogen electric generating facilities would be required to meet a limit of 375 pounds of carbon dioxide per megawatt hour generated to qualify for incentives and must use only “clean hydrogen” to generate electricity.

"I understand the environmental community had concerns about the industry stepping up,” Kenney said, “We worked very hard to mitigate those concerns."

The bill would help the extraction industry decarbonize but could also benefit agriculture, food production and manufacturing, he said.

It could help lower emissions from diesel vehicles and other equipment, Kenney said, that were unable to benefit from renewable energy sources like wind or solar power.

Hydrogen can also be generated using renewables like wind and solar, which many labeled “green hydrogen.”

Kenney said “about a dozen” companies were already showing interest in New Mexico due to the State’s recent efforts in the hydrogen sector.

“It’s really targeting low carbon projects,” Kenney said. “It’s allowing us to decarbonize industries we would be able to for years.”

But even with the release of the updated bill, environmentalists continued to oppose efforts to incentivize hydrogen development.

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Upon HB 4’s introduction, Heinrich (U.S. Sen. Martin Heinrich (D-NM)) said the bill was the next step toward establishing an “economic driver” in the hydrogen sector.

"As we make strides toward electrification and clean energy generation, there will still be difficult to decarbonize sectors like heavy trucking, aviation, and parts of the industrial sector. Clean hydrogen will be critical in solving these challenges,” he said.

“By taking this step, New Mexico can become the nation’s leader in clean hydrogen production, research, and workforce development.” READ MORE; includes VIDEO

Excerpt from NM Political Report:

With the clock ticking down to the end of the Legislative session, the House of Representatives rejected a bill on a tie vote during the early morning hours on Thursday aimed at reducing the carbon intensity of transportation fuels.

The House voted 33-33 for the Clean Fuel Standard Act following several hours of debate after 3 a.m on Thursday.

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Opponents argued that SB 14 would lead to increased gasoline costs that will disproportionately impact rural and low-income New Mexicans.

“You cannot talk about this without talking about the burden on the backs of New Mexicans,” House Minority Leader Rep. James Townsend, R-Artesia, said.

Rep. Larry Scott, R-Hobbs, said the bill would have a limited impact on global climate change. He compared it to squirting an eyedropper of green liquid into Niagara Falls and measuring how much greener the water is at the bottom.

“One thing we’re not going to do is alter the course of climate change,” he said.

Proponents say the bill was technology neutral, meaning reductions could come from increased adoption of electric vehicles or from the use of biofuels or other methods that could arise in the future.

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During the House Government, Elections and Indian Affairs Committee meeting on Wednesday, Small said one of the great things about the bill is that it considers the lifecycle emissions in determining the carbon intensity of the fuels.

“I think this is really learning and applying the best practices on decarbonization,” he said.

While on the House side, the bill was amended to include what Small described as insurance to prevent power shortages for Public Service Company of New Mexico this summer. The amendment, which was approved by the House Government, Elections and Indian Affairs Committee prior to it going to the House floor, allows PNM to request that the San Juan Generating Station be allowed to operate for four months following the approved abandonment date.

The Democrats who voted along with Republicans were Reps. Eliseo Alcon, D-Milan, Anthony Allison, D-Upper Fruitland, Harry Garcia, D-Grants, D. Wonda Johnson, D-Rehoboth, Raymundo Lara, D-Chamberino, Derrick Lente, D-Sandia Pueblo, Willie Madrid, D-Chaparral, Roger Montoya, D-Velarde, and Patricia Lundstrom, D-Gallup.

This amendment, which Rep. Daymon Ely, D-Corrales, introduced during the committee discussion, came following news that the state’s largest utility may not have enough power to provide electricity to its customers during peak demand this summer. This is largely due to the fact that a solar array and battery storage project intended to replace a portion of the energy currently received from the coal-fired power plant has been delayed due to supply chain issues.

Legislators can bring the bill for reconsideration, though the bill’s rejection came with fewer than nine hours left in the legislative session. READ MORE