Clean fuel bill ‘a big deal’
Governor inks measure; oil, gas group says pump prices will rise
New Mexico became the fourth state in the nation to enact a clean transportation fuel standard when Gov. Michelle Lujan Grisham signed House Bill 41 on Tuesday and declared “clean fuels the law of the land” to enthusiastic applause.
“Recognizing that transportation is a sizable industry for emissions — more than 14%
— it’s a place where we have to focus our efforts,” Lujan Grisham told a large group of supporters packed into her Cabinet room at the Roundhouse for a bill-signing ceremony.
The event came a day ahead of the governor’s deadline to take action on legislation that passed both chambers of the Legislature in the 30-day session that ended last month.
“I’m delighted about this bill, and I’m really proud of this state because we’re leaning in, in every way possible, to address and tackle climate change,” Lujan Grisham said.
Senate President Pro Tem Mimi Stewart, an Albuquerque Democrat who has worked on the proposal for four years, called the bill “the missing piece that we’ve needed for years” to lower carbon intensity in transportation fuels.
“The only thing people want to say is this will raise gas prices, and that is just not true,” she said. “In California, the clean fuel that they sell is $1.50 less than the regular fuel. We need to have lower gas prices in New Mexico, and it will come with our cleaner fuel standard.”
Others have cautioned otherwise.
Larry Behrens, a spokesman for the pro-oil and gas group Power the Future, wrote in an email the three states that have similar fuel standards — California, Oregon and Washington — pay an average of $4.28 for a gallon of gasoline, which is nearly a dollar more than the national average.
“It’s clear that Governor Lujan Grisham took a look at California’s highest gas prices in the nation and decided that’s what she wants for New Mexico’s families,” Behrens said in a statement. “As a national leader in oil production, New Mexico’s leaders should do all they can to support our energy industry. Instead, Santa Fe politicians want to copy failed policies that punish families by driving up prices.”
The legislation is hailed as a tool to tackle the “climate crisis” and reduce emissions, leading to a healthier New Mexico, and also is expected to stimulate economic growth.
“Clean energy is the biggest windfall available for New Mexico to take advantage of since oil was discovered here nearly a century ago,” according to the New Mexico Environment Department. “The clean fuel standard will bring this private investment here to our state while strengthening and diversifying our energy economy.”
The law, which goes into effect May 15, requires the state Environmental Improvement Board to promulgate rules to implement a clean fuel transportation standard program no later than July 1, 2026.
It sets a goal of reducing “carbon intensity” levels of
transportation fuels to 20% below 2018 levels by 2030 and 30% below them by 2040. To do this, producers of high-carbon transportation fuels like oil would either have to reduce how much they pollute or buy cleanfuel credits from low-polluting utilities or other clean fuel producers.
“Setting a carbon intensity standard for transportation fuels allows New Mexico to create a market that requires producers and vendors of high-carbon fuels to purchase credits from producers of low-carbon fuels,” the Environment Department reports.
While advocating for HB 41 during the 30-day session, Stewart said businesses expressed interest in moving to or expanding in New Mexico, a point she reiterated Tuesday.
“We have 40 companies that have reached out to us and said, ‘You pass this bill, we’re coming to New Mexico,’ ” Stewart said.
“We’re on our way to a cleaner air, a cleaner environment, better economic standards, especially for our rural areas,” she added. “So, I’m looking forward to this in a few years where we’re all gonna be even patting ourselves on the back more than we are today.”
Another sponsor, Rep. Kristina Ortez, D-Taos, predicted the law would do “such incredible things.”
“We’ll reduce emissions,” she said. “We’re going to save New Mexicans millions of dollars in health care costs, but we’re going to do something really, really important, which is that we are going to power our clean economy right here in this state, all over the state.”
Senate Majority Leader Peter Wirth, D-Santa Fe, said the bill was “a long time coming.”
“It’s a big deal,” he said. “It really is a big deal.”
The governor said the law includes safeguards to protect consumers if opponents’ predictions that gas prices would go up prove true.
While data doesn’t show a clean fuel standard leads to higher prices at the pump, Lujan Grisham said, “this bill put consumer protection issues inside the statute so that if gas prices go up a certain extent, whether it’s related or not, we then can make edits to make sure that protecting New Mexico consumers is done. It takes a process from the Environment Department, but it’s contemplated in this particular piece of legislation.”
Environment Secretary James Kenney said he believes New Mexico is the first state “to put that statutory relief valve into state law, whereas other states have put that into their administrative code.”
Even though “it’s not factual that there is a correlation between gas prices and low carbon fuel standards,” Kenney said, the so-called relief valve was included in the bill to build support.
“We’re going to continue to monitor those prices, and should all the data be wrong or there’s a geopolitical issue, which often is the cause of gas prices going up, then we’ll have that ability in state rule to evaluate that and make some determinations,” he said.
Several groups, including Conservation Voters New Mexico, lauded the legislation.
“This bill is an important step in decarbonizing our transportation sector, which is the second-leading source of climate pollution in the state, and will help jumpstart New Mexico’s long-overlooked alternative fuels market,” Conservation Voters New Mexico wrote in a news release.