Governor plans major push to make NM a 'hydrogen hub' - Albuquerque Journal

Governor plans major push to make NM a ‘hydrogen hub’

BayoTech is installing its first hydrogen production unit, shown here, at the company’s headquarters in Albuquerque. More units will be established in other sites around the country in coming months. (Courtesy of BayoTech)

Copyright © 2021 Albuquerque Journal

Gov. Michelle Lujan Grisham wants New Mexico to become a leading national hub for hydrogen development, with new framework legislation in the works for next year’s session.

The governor and Environment Secretary James Kenney unveiled the initiative in a joint Sept. 21 interview on the national podcast program “Everything About Hydrogen,” where Lujan Grisham touted New Mexico’s ability to “leap-frog” other states in efforts to build a “clean hydrogen” economy.

The podcast, however, raised concern among local environmental organizations, which question whether hydrogen production and distribution truly represent a “clean” alternative to fossil fuels. They fear state and federal authorities are racing forward to promote an unproven and risky technology that could actually slow the transition to renewable resources by reorienting public and private sector investment away from rapid development of solar, wind and battery storage technology.

Hydrogen development is emerging as a significant part of federal plans to help decarbonize everything from electric generation and long-haul shipping to heavy industrial processes like steel and cement production over the next 30 years. It has substantial bipartisan support in the U.S. Congress, including a proposal for $8 billion in federal grants to build four initial “hydrogen hubs” around the country.

Those investments – plus $1 billion more for hydrogen “demonstration” projects – are included in President Joe Biden’s $1.2 trillion infrastructure bill, already approved by the U.S. Senate and currently pending approval in the House.

Now, Lujan Grisham wants to lay the groundwork for New Mexico to become one of the national hubs, establishing a legal framework to incentivize public-private sector partnerships that can accelerate development. The new “Hydrogen Hub Act,” which the Environment Department and other state agencies are finalizing, would set statutory provisions to regulate the new industry, while offering investors the legal stability and certainty they need for long-term commitments, Lujan Grisham said.

“This is going to be our signature piece of legislation” in the upcoming session, Lujan Grisham said on the podcast. “… Businesses need predictability. They want to understand exactly where we are, where we’re going and what those rules are so that as they’re investing and innovating and hiring, they know that it’s sustainable.”

New Mexico is particularly well poised to build a local hydrogen hub, the governor added.

It has abundant natural gas reserves that can be used, at least at first, to derive the methane needed to produce hydrogen, she said. And it has extensive, existing energy infrastructure in place, such as pipeline systems and transmission lines, along with a skilled workforce that can be rapidly re-trained to transition from traditional fossil-fuel production to clean-hydrogen operations.

“We think it’s unlimited potential,” Lujan Grisham said. “I mean, if you just look in our current energy sector … you’re talking about tens of thousands of jobs for a state that’s got 2 million people in it. It is enormous, both in terms of converting current jobs so you don’t lose them, and building future jobs.”

Those statements, however, generated sharp reactions from the local environmental community, which has major reservations about relying on hydrogen to decarbonize the energy industry or other sectors of the economy.

That’s because most development today is focused on “blue hydrogen” production, which uses steam methane reform, or SMR, to pull hydrogen from methane in natural gas, along with carbon-capture technology to sequester emissions.

That’s a significant advance over today’s “gray” hydrogen production, which also uses SMR to separate hydrogen from methane or other fossil fuels, but without carbon capture to sequester the emissions.

Environmentalists, however, say carbon capture is an emerging technology that has yet to be successfully deployed on a commercial hydrogen plant. They question how much carbon can actually be captured in the process, and they doubt the wisdom or efficacy of later sequestering the captured carbon in underground geological formations.

Similar efforts to equip coal-fired power plants with carbon-capture have provoked near-universal opposition among environmental groups, who see it as indefinitely perpetuating coal-based generation rather than replacing that aging, high-polluting technology with renewable resources.

Likewise, environmentalists believe blue hydrogen will indefinitely prolong natural gas production, with no proven guarantee that emissions will be fully captured in the SMR process, nor during industrial operations to pull natural gas from the ground, process it, and transport it to hydrogen plants.

In contrast, most environmentalists favor potential future deployment of “green hydrogen,” which, unlike blue, relies exclusively on electricity from renewable resources like wind and solar to separate oxygen and hydrogen molecules in water in a process known as electrolysis. That technology has no carbon emissions.

But it’s still expensive, and until costs come down, it’s unlikely to enjoy broad industry deployment for another decade or more. In addition, even if it were deployed in New Mexico, green production would require huge amounts of fresh water, endangering scarce water resources in an arid state that’s already facing chronic drought from climate change.

Rather than pursue a hydrogen economy, most environmental organizations advocate full-scale development of renewable resources like solar, wind and battery storage, said Sierra Club Rio Grande Chapter Director Camilla Feibelman.

“We need to be careful when there’s such hype around one technology, especially technology that in many ways is untested and unproven,” Feibelman told the Journal. “We’re concerned that this drive to a ‘hydrogen economy’ will lock us into more fossil fuel use.”

But Lujan Grisham and Environment Secretary Kenney say New Mexico and the nation need to tap all available tools to rapidly decarbonize the economy on a massive scale over the next couple of decades. And hydrogen offers a path to clean up carbon emissions in industries like heavy trucking and long-distance shipping, as well as industrial processes like steel and cement production that can’t easily use renewable electricity to lower emissions.

Using hydrogen to generate electricity can also shore up the grid as the country shifts to heavy dependence on intermittent solar and wind generation. And for New Mexico, which already has the natural resources and energy infrastructure in place to facilitate a rapid transition to hydrogen, building a local hub allows the state to turn its abundant natural gas into a “clean” energy source, while preserving jobs and creating new ones.

It can provide a critical “bridge” in the transition to a clean energy future, Lujan Grisham said.

“Hydrogen is the only productive, clear path where you’re using what typically can be a problem – methane, natural gas – and capturing that so that you are investing in a much cleaner, reliable energy source that allows us to be building this transition,” the governor said on the podcast.

Regarding concerns about carbon capture and sequestration, the governor said many entities “don’t quite understand” the technology.

“I think it’s become sort of a rallying point for and against making it have any movement in the energy sector,” Lujan Grisham said. “But you have states that are really looking at it now – Texas, Wyoming and Nevada.”

New Mexico officials are coordinating closely with the U.S. Department of Energy on the forthcoming legislation to make sure the legal framework here coincides with emerging federal standards for hydrogen production, distribution and consumption. That can pave the way for New Mexico to tap into the $8 billion proposed for hydrogen hubs, plus other federal assistance, to accelerate development, the governor said.

“Utilizing the power and expertise of the DOE at the federal level heightens the ability of states to be incredibly successful as we innovate and provide hydrogen strategies,” Lujan Grisham said.

New Mexico’s congressional delegation, particularly Sen. Martin Heinrich, is aggressively pursuing federal funding for hydrogen development in general, while specifically promoting New Mexico’s leadership in building the industry. In August, for example, DOE Secretary Jennifer Granholm visited the state under Heinrich’s invitation, touring businesses and meeting with officials in Albuquerque and Farmington to learn first-hand about local hydrogen initiatives.

New Mexico still needs to continue building out solar, wind and other renewable resources, but there is no “one-size-fits-all approach” to the clean energy transition, Heinrich said.

“I’m working at the federal level to ensure that important environmental questions and concerns are taken into consideration,” Heinrich told the Journal in an email. “As we continue working towards our goals for clean hydrogen, it is critical that we put the necessary guardrails in place to ensure that we have a responsible path forward that meets our climate action goals and maintains our trajectory towards a zero-carbon economy.”


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