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Solar energy powers up EOG oil and gas operations

EOG Resources’ 8-megawatt solar array in Red Hills, shown here, came online in November, helping reduce the oil-and-gas operator’s carbon footprint in New Mexico while lowering operating costs. (Courtesy of EOG Resources)

Copyright © 2021 Albuquerque Journal

State officials are touting a novel solar facility built by oil and gas company EOG Resources in southeastern New Mexico as a prime example of the carbon-reduction projects that a statewide “clean-fuel standard” could inspire.

EOG built its new 8-megawatt solar array, which came online in November, to help power electric motor-driven compressors that provide the pressure needed to move natural gas through pipeline infrastructure. Gas-fired engines typically run the compressors around the clock, constituting the company’s primary source of stationary combustion emissions. But now, solar generation powers the motors during the day, with natural gas used only at night, substantially reducing greenhouse gas emissions while also lowering operating costs, according to the company.

The project – built in Red Hills in the heart of New Mexico’s Permian Basin operations – reflects the efforts of a new “sustainable energy group” EOG recently created to reduce carbon emissions through cost-cutting innovation.

EOG is the first industry operator to broadly employ solar generation in New Mexico. But state officials say more companies could be encouraged to pursue similar efforts through a new Clean Fuel Standard Act introduced this year by Sen. Mimi Stewart, D-Albuquerque, and Rep. Nathan Small, D-Las Cruces.

Senate Bill 11, which the Senate Conservation Committee passed 6-2 in January, will be heard Tuesday in the Senate Tax, Business and Transportation Committee. If approved, the bill would require fuel producers to reduce the carbon intensity of transportation fuels to 10% below 2018 levels by 2030 and 20% by 2040.

It would also provide incentives, allowing producers to earn credits for reducing greenhouse gas emissions, which they could bank to meet mandates in future years, or sell to other producers who face difficulty meeting the mandates.

Environment Department Secretary James Kenney said such incentives could attract clean-fuel companies to New Mexico to produce and distribute alternative fuels here.

“I believe we’d see more clean-energy investments like EOG has made,” Kenney told the Journal. “There are many opportunities to attract new businesses here and help diversify the economy.”

California’s clean-fuel standard has helped that state increase the production of alternative fuels and use of electrical vehicles.

Most fossil fuel companies are seeking to lower their emissions, said New Mexico Oil and Gas Association Executive Director Ryan Flynn.

“All of the larger companies are pursuing ways to innovate and position the industry to be part of a low-carbon future,” Flynn said.

But clean-fuel mandates could drive up prices, adversely affecting local consumers, Flynn warned.

“Refineries need to be able to meet demand with reasonably priced fuel supplies,” he said. “We need to find some middle ground to reduce carbon intensity in a way that’s helpful, not harmful, to consumers.”

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