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New Mexico Clean Fuel Standard Act advances in Senate

Jan 27, 2021

Credit Laura Paskus, New Mexico In Depth

  LAS CRUCES - Two bills that would give the state more authority to set its own environmental regulations passed through the Senate Conservation Committee Tuesday, Jan. 26.

 

Senate Bill 11, the Clean Fuel Standard Act, and Senate Bill 8 both passed on 6-2 votes. Both bills have two more Senate committees to clear before reaching the floor.

 

Senate President Pro Tempore Mimi Stewart, D-Albuquerque, is the sponsor of the Clean Fuel Standard Act. She argued that the bill would improve our health and environment while at the same time boosting the economy by sparking investment in new energy technology.

 

The bill, cosponsored by state Rep. Nathan Small, D-Las Cruces, would set new standards for gasoline, along with a market-based system to meet those standards. Businesses that produce or import fuel that does not meet the new standard would be able to purchase credits from producers who are contributing fuel to the state pool that is beneath the standard.

 

A similar system has been in place in California since 2011, and has led to increased production of fuels using ethanol, biodiesel, renewable diesel, compressed natural gas, liquified natural gas and hydrogen, as well as greater use of electric cars.

 

Standards would be based on the carbon intensity value of the fuel, and would require a 10 percent decrease from a 2018 baseline by the year 2030, and a 20 percent decrease by 2040. Standards after that would be determined by the state Environmental Improvement Board, based on the technology at that time.

 

State Environment Dept. Sec. James Kenney said the bill would also help the state meet its goal of a 40-percent reduction in emissions by 2040. He said cars and trucks were the second biggest contributor of emissions, behind oil and gas production.

 

Stewart said it was projected that the bill could spark as much as $47 million worth of new investment in clean fuel research and production in New Mexico.

 

“We believe there’s huge potential in the hydrogen vehicle market,” said state Economic Development Dept. Sec. Alicia Keyes. ”All of the major companies are leaning toward this technology, and we would like to attract one of these companies to New Mexico.”

 

She said it would allow businesses in the traditional energy sector to make the transition to a new technology.

 

“It may raise concern for areas that are historically reliant on coal and carbon-intense fuels, but it should really provide hope,” Keyes said. “It allows those traditional carbon industries to use credits that will allow them to keep their levels of operation while still contributing to the economy.”

 

Sen. Carrie Hamblen, D-Las Cruces, said the bill would help the state transition from its reliance on oil and gas.

 

“We talk about moving away from oil and gas,” Hamblen said. “The reality is, we can’t do that yet. It is a long-term vision. And I appreciate that through this bill, along with Sec.  Keyes and her department, we’re looking for opportunities to create new jobs.”

 

David Gallegos, R-Eunice, a senator from southwest New Mexico, wasn’t convinced. He said the bill would result in higher gas prices, placing the heaviest burden on those who live “paycheck to paycheck.”

 

Gallegos and fellow Republican Sen. Greg Schmedes of Albuquerque, voted against the bill. It now goes to the Senate Tax, Business and Transportation Committee for consideration.

 

The second bill, Senate Bill 8, would amend both the state Air Quality Control Act and the Hazardous Waste Act to allow the state to pass regulations that are more stringent than the federal government’s.

 

Bill sponsor Peter Wirth, the Senate majority leader and a Santa Fe Democrat, said right now the state is at the mercy of the federal government, which tends to tighten or loosen its regulations depending on which party is in office. When former President Donald Trump loosened rules on methane released during oil production, the state was powerless to do anything about it, he said.

 

“The (state) Environment Department has been stuck with those emission rules, and the agency is forced to adopt those regulations,” Wirth said.

 

Under provisions of the bill, local governments would also be able to adopt their own rules, as long as they are at least as stringent as state rules. 

 

Jim Winchester, of the Independent Petroleum Association of New Mexico, said the bill would create confusion for producers if there were different standards throughout the state. And, Ashley Wagner of the state Chamber of Commerce said it would send the message that industry could not rely on a predictable regulatory environment in the state.

 

Sen. Gallegos, who said he lives 45 feet from a working oil well, complained that the oil and gas industry was being demonized.

 

“I perceive this as harming the oil and gas sector. If we damage that industry, we also take money away from our students and schools,” he said.

 

But Schemedes voted for the bill, saying it was an issue of local control, even though he was concerned about what the impact could be.

 

The bill now goes to the Senate Judiciary Committee, and then Finance before getting to the floor.