New Mexico among three states chasing $1.25B for hydrogen

In an effort to transition to a fuel source that is less polluting than oil and gas, a group of western states, including New Mexico, are trying to develop hydrogen energy and are seeking federal funding.

The group’s plans were presented to the federal government last month.

The Western Interstate Hydrogen Hub, which consists of New Mexico, Colorado, Utah, and Wyoming, published a concept paper on November 15 in an effort to secure funding from the U.S. Department of Energy through the Infrastructure Investment and Jobs Act that President Joe Biden signed last year. The funding would amount to up to $1.25 billion.

The states hired Rocky Mountain Alliance for the Next Generation of Energy and engineering firm Atkins (RANGE).

RANGE encompasses a number of educational institutions in New Mexico, including the University of New Mexico, New Mexico State University, and New Mexico Tech. It also includes the Los Alamos and Sandia national laboratories.

The states anticipated that by banding together, they might be more competitive for the federal monies provided by the DOE to set up numerous “hubs” devoted to creating hydrogen electricity across the nation.

It is a component of a larger federal government initiative to move away from fossil fuels in order to prevent pollution and the effects of ensuing climate change.

The Hub intended to set up eight hydrogen power projects spread across the four states, transport the hydrogen by pipeline, and store it both below ground and on the surface.

The northwest section of the state, which includes the state’s Escalante power plant, as well as along its western border with Arizona, will house facilities for the generation of hydrogen as well as renewable energy, storage, and transportation.

The plan called for other industrial initiatives to be situated in south-central New Mexico.

Transport of the hydrogen produced will move from New Mexico through Colorado, Wyoming, and Utah.

According to the plan, utilities involved included Tallgrass, which manages Escalante in New Mexico, and New Mexico Gas Company.

The project was anticipated to lower regional carbon emissions by 35,000 metric tons per day in total.

Is using hydrogen a way to decarbonize energy generation in New Mexico?
The development of hydrogen, according to James Kenney, cabinet secretary for the New Mexico Environment Department, would also assist diversify the oil and gas-dependent economy of his state.

About a third of New Mexico’s budget was made up of revenue from oil and gas, which is also mainly responsible for the state’s projected $2.5 billion surplus.

While the oil and gas industry was expanding and production was rising in southeast New Mexico’s Permian Basin at the time of the bonanza, state officials had to deal with a $400 million budget deficit when the market crashed in 2020 due to the COVID-19 pandemic.

Kenney and other authorities were convinced by this that New Mexico would be exposed to abrupt economic changes as a result of unstable energy markets.

According to Kenny, “New Mexico and our Western State Partners are Leading the Way to Develop Sustainable Clean Hydrogen Markets that will Grow Our Economy, Use Our Energy Workforce, and Continue Reducing Climate Change Emissions.”

In order to further our efforts to produce clean hydrogen, “our bipartisan collaboration with Colorado, Utah, and Wyoming put us as a strong contender for federal funding for hydrogen hubs.”

After numerous unsuccessful attempts by state politicians to increase hydrogen production through bills sponsored in the Legislature, New Mexico formed alliances with other states.

Several bills that would have given incentives to fossil fuel companies for developing hydrogen and classified it as renewable energy were rejected by lawmakers during the 2022 legislative session, which took place in January and February of this year, in the face of protests from environmental organizations.

During the 30-day session, four distinct pieces of legislation were rejected or put on hold amid claims that state funding for hydrogen production would primarily benefit fossil fuel businesses and that, depending on how it is produced, hydrogen power could still contribute to carbon pollution.

Despite this, the governor of New Mexico, Michelle Lujan Grisham, issued an executive order requiring lawmakers to find a method to create a hydrogen power program in the state after joining a group of states to pursue $8 billion in federal funding in February.

According to a statement from Lujan Grisham, “New Mexico is a state that believes in bold, inventive solutions that solve our climate concerns while creating green employment and diversifying our economy.” We certainly have the chance to have it all, and this government is driving the effort to turn New Mexico into a hub for clean, zero-carbon hydrogen.