Copyright © 2022 Albuquerque Journal
SANTA FE – A high-profile hydrogen energy bill is in limbo at the Roundhouse after an attempt to revive it through legislative maneuvering fizzled amid a deluge of criticism from environmental groups.
House Speaker Brian Egolf, D-Santa Fe, announced Monday that the revived bill, which was filed after a previous proposal stalled, had been withdrawn from its only assigned House committee.
Egolf did not cite a reason for the change of plans on the House floor, but later told the Journal the legislation would remain parked until “day 31” of this year’s 30-day legislative session.
The latest developments came as the Legislature enters the final stages of the session and after an influential sponsor of the hydrogen bill backed by Gov. Michelle Lujan Grisham used a “dummy” bill, or a generic bill, as a vehicle to rewrite the legislation with substantial changes.
The new bill, House Bill 227, was filed by Rep. Patricia Lundstrom, D-Gallup, and subsequently assigned to the House Appropriations and Finance Committee, which she chairs.
If approved by that committee, the bill would have gone directly to the House floor, since “dummy” bills are typically assigned to only one legislative committee.
Lundstrom said last week she expected “good things” for the hydrogen bill despite it stalling in its first assigned House committee, telling reporters, “It’s not over until it’s over.”
But Rep. Matthew McQueen, D-Galisteo, the chairman of the House Energy, Environment and Natural Resources Committee, said on Sunday he was “very concerned” that the new bill appears to be bypassing not only that committee but also another House panel the original bill had been assigned to.
In addition, a group of about 20 youthful Indigenous advocates rallied outside the Roundhouse on Monday against both the rewritten hydrogen bill and the legislative maneuver used to bring it forward.
One of the speakers, Julia Bernal of the Pueblo Action Alliance said the bill seeks to continue New Mexico’s fossil fuel industry, which she and others described as exploitative.
“We are here to denounce the undermining of our democratic process,” said Bernal, who is an enrolled member of Sandia Pueblo.
Lujan Grisham has been pushing legislation creating the legal framework for a new hydrogen industry as “priority” legislation in this year’s session, encouraging Cabinet officials to work with legislative proponents to address concerns raised during a House committee hearing last month.
She told the Journal in a recent interview she was not giving up on the issue, despite pushback from environmental advocates and some lawmakers.
“Nothing’s ever done in the Legislature until they say, ‘Sine Die,'” said the Democratic governor, referring to the motion to adjourn that is made at the end of legislative sessions.
The original Hydrogen Hub Development Act, House Bill 4, was tabled on a bipartisan 6-4 vote last month in the House Energy, Environment and Natural Resources Committee.
Since then, proponents rewrote the standards and language in the bill dealing with carbon emissions from hydrogen production.
Those changes strengthen the emission limits imposed to qualify for new tax incentives and more clearly define the monitoring and verification procedures to enforce those standards, said Rep. Nathan Small, D-Las Cruces, who co-sponsored the original bill.
“(The new bill) incorporates extensive, earnest feedback that said New Mexico needs to meet or exceed federal standards when decarbonizing the economy with hydrogen,” Small told the Journal before the bill was pulled back. “We tightened up every portion of the bill based on that feedback. It now meets and exceeds federal standards, while still putting New Mexico in a leadership role in hydrogen development.”
Among other changes, the revived-then-shelved bill would have strengthened emission limits to meet, and in some cases exceed, federal standards to qualify for tax incentives.
In addition, it included clearer definitions regarding enforcement of those mandates throughout the full life cycle of hydrogen production, starting at the well head where natural gas is pulled from the ground, continuing through its transport to hydrogen facilities, and then verifying near-zero carbon emissions when extracting hydrogen from the gas.
The new bill ran into similar opposition as the original measure, however, as some environmental groups oppose any state promotion of natural gas-backed hydrogen production, which pulls hydrogen molecules out of the methane contained in gas, emitting substantial carbon in the process.
Supporters say producers will be required to capture and sequester nearly all emissions, turning the hydrogen into a “clean” product that could be used to decarbonize everything from long-haul trucking and shipping to electric generation.
But environmentalists say that, even with the modifications, the new legislation is still fundamentally aimed at creating new subsidies for fossil fuel production, since natural gas production will likely increase to supply the gas-based feedstock needed to produce hydrogen.
“Our basic objections still stand,” said Tom Solomon of the environmental group 350 New Mexico. “This bill is fundamentally about approving tax subsidies to expand the use of fossil methane to produce hydrogen. The new bill has minor improvements – they tweaked the emission limits somewhat to qualify for tax deductions – but those subsidies are still in there, and that’s a show-stopper for us.”
Likewise, Western Environmental Law Center Executive Director Erik Schlenker-Goodrich called the bill a “boondoggle” that provides subsidies for wealthy natural gas producers to increase their operations under the guise of “clean hydrogen.”
“The hydrogen bill isn’t about protecting the climate,” Schlenker-Goodrich told the Journal in an email. “It’s about politics, power, and profit in service of perpetuating New Mexico’s dependence on fossil fuels.”
However, Noah Long of the Natural Resources Defense Council – which adamantly opposed the first hydrogen bill – said the revised bill still needed some improvement, but added state and legislative proponents seem to be working to address concerns.
“These are complicated, difficult issues with lots of stakeholders and viewpoints to consider, but I’m heartened by the leadership we’re seeing at the state level to do this right,” Long told the Journal.
With just nine days left in this year’s session, it was unclear Monday whether the hydrogen legislation might still surface in another bill at the Roundhouse.
At least one other bill pending at the Capitol, Senate Bill 194, also deals with hydrogen energy and would amend an existing state law to include hydrogen power plants as an allowable type of renewable energy.
That bill has been introduced by Sen. George Muñoz, D-Gallup, and is also drawing scrutiny from environmental groups.
Meanwhile, a budget bill approved last week by the House would earmark $125 million in federal relief funds for hydrogen energy development in New Mexico, but only if lawmakers approve a bill setting up a legal framework for hydrogen during this year’s session.