Copyright © 2021 Albuquerque Journal
State officials are promoting a new solar facility built by the oil and gas company EOG Resources in southeastern New Mexico as an excellent example of the carbon reduction projects that a “clean fuel standard” across the state could inspire.
EOG built its new 8-megawatt solar array, which went into operation in November, to help power compressors powered by an electric motor that provide the pressure needed to move natural gas through the pipeline infrastructure. Gas engines normally operate the compressors 24 hours a day, being the company’s main source of stationary combustion emissions. But now, solar generation powers the engines during the day, with natural gas used only at night, substantially reducing greenhouse gas emissions and, at the same time, reducing operating costs, according to the company.
The project – built in Red Hills, at the heart of New Mexico’s Permian Basin operations – reflects the efforts of a new EOG “sustainable energy group” recently created to reduce carbon emissions through cost-cutting innovation.
EOG is the industry’s first operator to widely employ solar generation in New Mexico. But state officials say more companies could be encouraged to pursue similar efforts through a new Standard Clean Fuel Act introduced this year by Senator Mimi Stewart, D-Albuquerque and Congressman Nathan Small, D-Las Cruces.
Senate Bill 11, which the Senate Conservation Committee passed 6-2 in January, will be heard on Tuesday at the Senate Tax, Business and Transport Committee. If approved, the bill would require fuel producers to reduce the carbon intensity of transport fuels to 10% below 2018 levels by 2030 and 20% by 2040.
It would also provide incentives, allowing producers to earn credits to reduce greenhouse gas emissions, which they could deposit to fulfill their mandates in future years, or sell to other producers who face difficulties in fulfilling their mandates.
Department of Environment Secretary James Kenney said such incentives could attract clean fuel companies to New Mexico to produce and distribute alternative fuels here.
“I believe that we would see more investments in clean energy as EOG did,” Kenney told the Journal. “There are many opportunities to attract new business here and help to diversify the economy.”
California’s clean fuel standard helped this state increase the production of alternative fuels and the use of electric vehicles.
Most fossil fuel companies are looking to reduce their emissions, said Ryan Flynn, executive director of the New Mexico Oil and Gas Association.
“All the big companies are looking for ways to innovate and position the industry to be part of a low carbon future,” said Flynn.
But clean fuel mandates could drive up prices, adversely affecting local consumers, Flynn warned.
“Refineries need to be able to meet demand with reasonably priced fuel supplies,” he said. “We need to find a middle ground to reduce carbon intensity in a way that is useful, not harmful to consumers.”