$1.25B grant targeted by New Mexico-led hydrogen power project, using oil and gas areas
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Oil and gas regions in New Mexico led the state's efforts in targeting a $1.25 billion federal grant for hydrogen power via a joint project with three other western states.
The Western Interstate Hydrogen Hub saw the State of New Mexico partner with Colorado, Utah and Wyoming to target funds made available by the U.S. Department of Energy as it intended to devise multiple “hubs” of hydrogen development across the U.S.
The hub proposal included projects both in the northwest San Juan Basin and southeast Permian Basin – the state’s two main fossil fuel regions.
It’s part of the DOE’s broader agenda of creating new sources of energy less pollutive than traditional fossil fuels, as the federal administration works to address climate change in the U.S.
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The proposed hub spans about 408,000 square miles in the four states, which already produce about a sixth of the nation’s energy, according to an announcement by the New Mexico Environment Department (NMED).
The energy-producing states signed an agreement in February 2022 to create the hub and coordinate a regional plan to target the federal funds and hired engineering firm Atkins as the lead contractor.
A proposal for the hub was submitted to the DOE’s Office of Clean Energy Demonstrations ahead of the April 7 deadline, which saw the hub selecting eight companies to partner in the project including universities, national laboratories and private companies.
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NMED said the hub developers planned to exceed a 50 percent matching requirement for the federal grant.
What are the hydrogen projects in New Mexico, other states in the hub?
Seven projects were included in the proposal spanning the four states.
In New Mexico, this included Avangrid which has and planned to leverage its experience in renewable energy projects and planned to produce hydrogen in the Navajo Nation in San Juan County and in Torrance County.
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Libertad Power would also produce New Mexico hydrogen for heavy haul transportation and power generation and storage in Lea County in the southeast and San Juan County in the northwest.
Navajo Agricultural Product Industries, a 275,000 acre commercial farm owned by the Navajo Nation in San Juan County would also be included as it aims to become energy self-sufficient in growing produce for tribal members, while Tallgrass Energy would also produce hydrogen power in New Mexico, Colorado and Wyoming.
The plan also included projects from Xcel Energy Colorado to generate hydrogen via wind and solar power in that state’s eastern plains, along with Dominion Energy Utah’s high-pressure natural gas system and AVF Energy to produce hydrogen from biomass as part of wildfire mitigation in Utah.
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New Mexico leaders ague hydrogen to curb pollution amid criticism
Hydrogen energy proved controversial in New Mexico as environmental groups opposed a series of bills that ultimately failed in the 2022 Legislative Session backed by state officials to incentivize the industry in the state.
Concerns grew around the method of developing the energy source, which can use extracted natural gas, and environmentalists argued the legislation lacked assurances that it would require the process be what its considered “green hydrogen” that uses only renewable energy.
New Mexico’s signing of the interstate deal was also met with opposition as groups argued the bills’ failure proved a negative referendum on the concept in their state.
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But New Mexico Gov. Michelle Lujan Grisham maintained that hydrogen would bring economic diversity to her oil- and gas-dependent state but maintain New Mexico’s position as a lead state in energy production and in addressing pollution.
“Through bipartisan collaboration with states and project partners, we are advancing a vital economic development initiative that will power the nation and create thousands of jobs — all while reducing emissions,” Lujan Grisham said in a Monday statement as the grant application was announced.
“I look forward to the Department of Energy approving our plans for the premier hydrogen hub in the nation.”
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San Juan County Commission Chair Steve Lanier said the economic boon brought to his community from the hub could offset jobs and tax revenue lost in the recent closure of the coal-fired San Juan Generating Station.
Overall, the hub and its projects were expected to bring 26,000 jobs to the four states, including 7,000 construction jobs, read the NMED’s report.
“We’re very excited to see three hydrogen projects interested in locating in San Juan County, New Mexico,” Lanier said. “The opportunity to land high-wage jobs and replace some of the property tax base lost with the closure of the coal-fired San Juan Generating Station is exactly the kind of energy transformation and economic development we need.”
Anja Richmond, program director of the hub said the collaborative nature of the project meant multiple communities in the American West would benefit from the federal funds while also advancing national goals of less-carbon-intensive energy.
“We have conducted social characterization assessments for each impacted community and are confident that hydrogen will benefit these communities and their workforces for many years to come,” Richmond said.
Adrian Hedden can be reached at 575-628-5516, achedden@currentargus.com or @AdrianHedden on Twitter.
This article originally appeared on Carlsbad Current-Argus: $1.25B grant targeted by New Mexico-led hydrogen power project
