SANTA FE, N.M. (AP) — State legislators gave a cold reception Thursday to a package of financial incentives aimed at scaling up hydrogen production using New Mexico's vast natural gas reserves.
A state House panel voted 6-4 to indefinitely postpone consideration of a bill that would offer grants, loans and tax breaks to a nascent hydrogen industry. Time is running short for the bill to advance during a 30-day legislative session that ends on Feb. 17.
Gov. Michelle Lujan Grisham has backed the initiative with enthusiasm, deploying top environmental and economic development officials to lobby legislators.
The proposal coincides with an $8 billion federal government set-aside for as many as four “hydrogen hub” production and distribution centers somewhere in the United States. Public investments in hydrogen are aimed at developing cleaner sources of fuel for industrial sectors and the deployment of fuel-cell vehicles in heavy, long-haul trucking.
Environmentalists are wary of the impacts of hydrogen production that uses natural gas as an energy source and feedstock, arguing that it can prolong dependence on fossil fuels and relies on relatively unproven technologies to capture and dispose of carbon pollution that otherwise contributes to global warming.
Democratic state Rep. Patricia Lundstrom of Gallup urged colleagues to quickly set up a framework for incentives in public-private partnerships to help New Mexico gain a foothold in the industry.
“If you're not the lead dog, the scenery never changes," said Lundstrom, chairwoman of the lead House budget committee. A draft of state's annual spending plan would devote $125 million for hydrogen-related grants, loans and administrative expenses at state agencies.
Nearly 300 people logged into an online waiting room to comment on the proposal in one-minute intervals. An informal survey showed about three-fourths of the audience opposed the bill.
Supportive comments poured in from business associations, rural electric cooperatives, hydrogen entrepreneurs and multinational energy giants Chevron and ExxonMobile. Local government and public school administrators said the bill held out the promise of restoring jobs to regions where coal-fired power plants have closed down in recent years.
But the plan came under withering criticism from environmentalists and an array of advocates for indigenous communities and social justice causes. They highlighted unresolved technological concerns, including the challenges of capturing and storing carbon dioxide as a byproduct of hydrogen production on a large scale.
Democratic state Rep. Matthew McQueen of Galisteo expressed reservations about providing incentives for “enhanced oil recovery," referring to underground carbon storage techniques that help produce more oil.
Republican legislators voted in unison against advancing the legislation, joined by two Democrats, at the close of a seven-hour public hearing.