New Mexico teams with three western states in applying for $1.25B in funds for hydrogen power

A consortium of western states including New Mexico working to develop hydrogen energy and seeking federal funds filed its plans submitted to the federal government last month, as the state hoped to transition to fuel sourcing less-pollutive than oil and gas.

The Western Interstate Hydrogen Hub, made up of New Mexico, Colorado, Utah and Wyoming released a concept paper Nov. 15, hoping for up to $1.25 billion in funding from the U.S. Department of Energy through the Infrastructure Investment and Jobs signed by President Joe Biden last year.

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

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RANGE includes several institutions in New Mexico, including Los Alamos and Sandia national laboratories, University of New Mexico, New Mexico State University and New Mexico Tech.

By grouping together, the states hoped they could be more competitive for the federal funds offered by the DOE to establish multiple “hubs” around the country dedicated to producing hydrogen power.

It’s part of a broader effort by the federal government to shift away from fossil fuels to reduce pollution in the impacts of subsequent climate change.

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Under the plan, the Hub planned to establish eight hydrogen power projects across the four states, while moving the product via pipeline and storing it both underground and at the surface.

New Mexico will host hydrogen production, renewable energy, storage and transportation facilities in the northwest region, including the Escalante power plant of the state and along its western border to Arizona.

Other production projects, according to the plan, would be located in south-central New Mexico.

Transportation of the produced hydrogen will flow from New Mexico, to Colorado, then Wyoming and into Utah.

Utilities involved included Tallgrass, which operates Escalante in New Mexico and New Mexico Gas Company, according to the plan.

In total, the project was expected to reduce carbon emissions in the region by 35,000 metric tons per day.

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Hydrogen a path to decarbonizing New Mexico energy production?

James Kenney, cabinet secretary of the New Mexico Environment Department said hydrogen development would also help diversify his state’s oil- and gas-dependent economy.

Oil and gas revenue accounted for about a third of New Mexico’s budget and was largely credited for an up to $2.5 billion surplus in state coffers reported this year.

That windfall came while oil and gas markets were growing and production increased in the Permian Basin of southeast New Mexico, but when the market collapsed in 2020 amid the COVID-19 pandemic state leaders were forced to contend with a $400 million budget deficit.

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This illustrated to many officials, like Kenney that volatile energy markets could leave New Mexico vulnerable to dramatic economic shifts.

“New Mexico and our western state partners are leading the way to develop sustainable clean hydrogen markets that will grow our economy, utilize our energy workforce, and continue to reduce climate change emissions,” Kenny said.

“Our bipartisan collaboration with Colorado, Utah and Wyoming positions us as a strong contender for federal hydrogen hub funding to further our clean hydrogen efforts.”

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New Mexico’s partnerships with other states came after multiple failed legislative attempts by state lawmakers to bolster hydrogen production via bill introduced in the Legislature.

During the 2022 lawmaking session, which ran from January to February earlier this year, several bills to provide incentives to fossil fuel companies for hydrogen development and to classify it as a renewable energy were rejected by lawmakers amid outcry from environmental groups.

Four different bills were voted down or tabled during the 30-day session, amid accusations that state financial support of hydrogen production would only support fossil fuel companies and that hydrogen power could still produce carbon pollution depending on the method its generation.

Despite this, New Mexico Gov. Michelle Lujan Grisham via an executive order demanded lawmakers find a way to develop hydrogen power policy in the state, signing onto the multi-state coalition in February to target $8 billion in federal funds.

“New Mexico is a state that believes in bold, innovative solutions that address our climate challenges while creating green jobs and diversifying our economy,” Lujan Grisham said in a statement. “We are truly in a position to have it all – and this administration is leading the charge toward making New Mexico a national clean and no-carbon hydrogen hub.”

Adrian Hedden can be reached at 575-628-5516, or @AdrianHedden on Twitter.

This article originally appeared on Carlsbad Current-Argus: New Mexico teams with three states in applying for hydrogen power funds