HB 4 Hydrogen Hub Reborn in dummy bill HB 227, then again in HB 228; SB 194 related

ANOTHER UPDATE, 2-8-22: The Hydrogen Hub was introduced yet a third time in “dummy” bill HB 228. Are you laughing yet? We don’t think HB 228 will get through in the 9 days remaining in the Session, but we’ll keep you posted. Talking points against hydrogen production below remain the same. No time to update it, so just assume “228” where you see “227.” Bills are nearly identical; HB 228 removes the tax credits that were in HB 227 and HB 4.

LATEST UPDATE, 2-7-22: As he said he would, Speaker Egolf effectively killed HB 227 today (Feb. 7) by putting in on the “Speaker’s Table” on the House Floor. More about this later. Whew!

The Governor’s Hydrogen Hub (HB 4) has been re-introduced in a new bill: HB 227. While the new bill includes some minor changes, all of the points in opposition to HB 4 below are still germane. We have clarified what is different in HB 227 and updated our speaking points.

On another related front, SB 194 has been introduced to amend the Rural Electric Cooperative Act and the Renewable Energy Act and uses the same disingenuous definiions of “clean hydrogen” in HB4-HB227. The intent of the legislation is to legitimize clean hydogen as a renewable energy source. While not containing all that is contained in HB4-HB227, this is yet another effort on the part of hydrogen proponents, to legitimize it in statute. It should be opposed.

Link to HB194 bill language.

HB 4-HB 227 Summary: This bill would initiate a number of efforts toprovide economic and administrative efficiencies in connection with the development of hydrogen hubs.” HB 4 would have established criteria and conditions under which a “clean hydrogen electric generation facility” may operate and defined what such a facility is. It outlined how a board would be formed to oversee hydrogen development and defined an array of tax credits and other financial incentives for operating a “clean hydrogen electric generation facility.”

HB4-HB227 Summary. HB 227 retains the tax incentives found in HB4, and is designed to authorize the expenditure of $150M already set aside in the pending appropriations bill, HB 2. HB 227 maintains the same definitions of “clean” hydrogen that characterizes what a hydrogen production facility is and what it does. That definition allows emissions of up to 375 lbs. of CO2 per 1MWh and describes that as “clean.”

Why HB 227 (previously HB 4) Is Bad for New Mexico

Erik Schlenker-Goodrich, executive director of the Western Environmental Law Center, said after reviewing the new bill it is very similar to HB 4.

“Effectively they are just rearranging the deck chairs in the bill,” he said. “It includes all the same tax credits and tax deductions, it sets up private-public partnerships. It is very much a pro-hydrogen bill.”

HB 227, like HB4, goes on to define clean hydrogen as “hydrogen produced with a carbon intensity equal to or less than two kilograms of carbon dioxide equivalent per kilogram of hydrogen produced.” Defining “clean hydrogen” as something that allows an unacceptable level of greenhouse gases (GHG), does not make it clean.

HB227, like HB 4, is not a climate bill; it is a bill to support the gas and oil industry, and environmental groups are not fooled. From Western Environmental Law Center: “Let’s be crystal clear,” said Director Erik Schlenker-Goodrich of HB 4, “this bill isn’t a climate or clean energy bill. It’s a fossil fuels bill.” While the bill no longer includes tax incentives for gas and oil, it does provide them a market to continue to operate their extraction operations, essentially propping up a failing industry.

HB227 and HB4 call for the same form of Blue Hydrogen, which emits more GHGs than coal. A dozen highly credible national environmental orgs. joined Food and Watch in a letter to U.S. Sen. Schumer & Speaker Pelosi against blue hydrogen and carbon capture: [bold emphasis ours] “New research from scientists at Cornell and Stanford outlines how fossil fuel based hydrogen, coupled with carbon capture and storage has larger greenhouse gas emissions than coal. This hydrogen is generally referred to as blue hydrogen, and sometimes referred to as low-carbon or decarbonized hydrogen. Despite the huge emissions of blue hydrogen, the fossil fuel industry is pitching blue hydrogen as a way to make sustainable hydrogen from fossil fuels. By ignoring the impacts to climate change, public health and the environment, proponents of blue hydrogen are essentially pushing for more fossil fuel development, including fracking, pipelines and harms to Black, Indigenous, and other people of color, often hurt first and worst because of the systemic patterns of industrial development built alongside marginalized communities.”

Blue Hydrogen Is Not a Prudent Financial Investment: Energy researchers project that within the decade, the cost to produce “green hydrogen” (authentically clean hydrogen), will be lower than the blue hydrogen proposed by our Gov. From Academia: “developments in this field are so fast that the price for green hydrogen will drop in this decade below that of blue hydrogen. The implication is that most heavy industry can switch directly to green hydrogen rather than invest in blue hydrogen, because installations for its [blue hydrogen] production and CO2 capture and storage could soon become ‘stranded assets.’”

In other words, not only is “clean hydrogen” not clean, but within a few years it will be uneconomical and NM’s investments in the hydrogen hub will be worthless. Hydrogen hubs will succeed only in states with plentiful water or on the ocean where desalination processes can produce vast amounts of water needed to create green hydrogen.

What Should the Legislature Do?
Vote NO on SB 194. Refuse to invest in a dirty production process that will be unprofitable by the time the infrastructure is in place. Instead, invest in development of energy storage coupled with wind and solar energy, of which NM has an abundant supply. The Dept. of Energy has set a goal of reducing the cost of long-term storage by 90% within the decade. This is the clear path to a more diverse, sustainable NM economy.