Low-carbon fuels manufacturer selects New Mexico for $1.6 billion facility

The Land of Enchantment has yet again enchanted another company to establish roots in the state.

Blue Pony Energy, a Houston-based startup chemical manufacturer that turns natural gas into cleaner-burning fuels and industrial materials, has elected to build a clean fuels manufacturing facility in Lovington, state officials told the Journal Monday.

Blue Pony CEO Justin Rencurel said it was Lovington and New Mexico’s “world-class” energy resources and infrastructure, sustainability policies and goals, and engaging business and community environment that helped the state beat out other sites in Texas, the Appalachian Basin and Canada.

“There’s an ecosystem that’s in place (in New Mexico) that’s very unique and hard to replicate in other parts of the country,” Rencurel said.

The project is expected to create 107 permanent jobs, 90 of which will be reserved for New Mexicans, the company projects. It will also support an additional 221 direct and indirect jobs, and generate more than $4.6 billion in economic impact over the next decade, according to the New Mexico Economic Development Department.

Rep. Nathan Small, D-Las Cruces, hailed the announcement, stating that the company’s selection of New Mexico “is a clear demonstration that our efforts to attract sustainable businesses and good jobs to our state are paying off.”

Blue Pony joins several other high-tech companies that have, in recent months, announced plans to establish roots in New Mexico for the first time, including space startup Mantis Space and hypersonic missile manufacturer Castelion Corp.

“This one is particularly exciting to me,” said New Mexico Economic Development Secretary Rob Black, who was born and raised in Lovington.

“To have a project like this — that impacts rural New Mexico (and) that helps decarbonize very hard-to-decarbonize technologies, like jet fuel or diesel or lubricants — is a unique win for New Mexico,” Black said, adding that the project is “aligned with what we're trying to do, both around job creation, but also with addressing climate change and decarbonization of the economy.”

The advanced energy industry is one that New Mexico is targeting for growth — a focus set forth by Gov. Michelle Lujan Grisham and the Economic Development Department’s state plan and science and technology roadmap. The department highlights New Mexico’s energy goals, oil and gas legacy, scientific research innovations and renewable energy resources as reasons why the state is well-positioned for investment and growth in the industry.

Blue Pony will use the Lovington facility to produce a low-carbon version of products, including diesel, hydrogen, lubricants, coolants and other resources used in industrial spaces and energy-intensive industries across the globe, Rencurel said.

“We are part of the energy transition. We’re trying to make products that make sense today, at today’s prices,” Rencurel said. “There’s so many challenges with energy transition, where people try to jump a canyon. … We’re part of an ecosystem. We’re not trying to change it, but we’re doing it in a cleaner way.”

The company will be the first manufacturer of this type in New Mexico, Black said. He also said Blue Pony will likely be one of the first companies to participate in the state’s recently established Clean Transportation Fuel Program, which goes into effect in April.

It will cost $1.6 billion to build the facility, but the project is eligible to benefit from up to $2 million in state Local Economic Development Act, or LEDA, funds.

LEDA allows the state and local municipalities to invest public money into private companies that are expanding or relocating in order to help with costs associated with land, building and infrastructure, according to EDD’s website.

The project could also utilize local LEDA funds from the city of Lovington, but such funds are yet to be determined, said Lovington Mayor Howard Roberts.

Roberts said the Blue Pony project is a continuation of economic diversification for Lovington, a small town in the Permian Basin of roughly 11,000 people in Lea County. The city has made a push to diversify its economy over the last several years, partly by growing its dairy business.

“We go through oil and gas booms and busts, but we’ve learned how to survive them,” Roberts said. “Anytime you can diversify our industry, then it stabilizes what we would call ‘the bottom.’ … Our bottom is a lot more elevated than it was whenever we were just oil and gas only.”

Roberts said he and the community are “very excited” to be selected for the project and to see it come to fruition — but it will be a while before tangible progress is made.

The project — which still has to go through engineering, design, fundraising and permitting — is expected to break ground in early 2028 and reach completion by 2031, Rencurel said.

There’s some available acreage next to Blue Pony’s site — 350 acres situated in the Lovington Industrial Park — that Rencurel hopes will open the door for other advanced energy projects and partners to come onboard in the meantime.

“It’s not just the potential for our project,” Rencurel said. “We really have an opportunity to set a standard to show other parts of the world just what can be accomplished here.”

Kylie Garcia covers retail and real estate for the Journal. You can reach her at kgarcia@abqjournal.com.