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Hydrogen incentives get cold reception in New Mexico

The U.S. and New Mexico state flags are presented during the opening ceremony of a 30-day legislative session in the House of Representatives in Santa Fe on Jan. 18. (Morgan Lee/Associated Press file)

SANTA FE – A panel of state legislators on Tuesday rejected a bill that would have provided new financial incentives in New Mexico for the hydrogen fuel that is derived from natural gas.

A Senate panel suspended the bill from further consideration on a 7-2 vote amid lengthy and impassioned public comments.

The initiative – sponsored by Democratic Sen. George Muñoz of Gallup – would treat some hydrogen and hydrogen-fueled generating stations for electricity much like renewable energy sources such as wind turbines and solar-panel arrays that get favored treatment in the procurement process for electricity by utility companies.

The preferences would only apply to hydrogen made from “responsibly sourced” natural gas where climate-warming pollution from hydrogen production is captured and stored underground. Some carbon dioxide emissions still would be allowed at hydrogen-fueled power plants, though at lower rates that gas-fired power plants.

Environmental groups and consumer protection advocates said the proposal would undermine climate protection goals of the state’s Renewable Energy Act, while relying on unproven carbon capture techniques.

Muñoz said the bill could help New Mexico become a staging ground for an emerging hydrogen industry. Proponents of hydrogen research and development predict a path to cleaner sources of fuel for industrial sectors and the deployment of fuel-cell vehicles in heavy, long-haul trucking.

A federal infrastructure bill last year set aside $8 billion for as many as four “hydrogen hub” production and distribution centers somewhere in the United States.

“This just gives us the ability in New Mexico to say that this is going to be in our portfolio ... which allows us to get $2 billion from the feds and begin to look at it,” Muñoz said.