IEEFA report: Carbon capture project lacks investors, has an unrealistic timeframe

Enchant Energy faces “insurmountable” obstacles as it works to acquire the San Juan Generating Station and retrofit it with carbon capture technology, according to David Schissel, director of resource planning analysis for the Institute for Energy Economics and Financial Analysis. Schissel authored a report released on Thursday looking at the lack of investors and progress on the project. He said his key message is that the project has not made much progress and that investors are “clearly skeptical.” He said there are likely insurmountable economic issues and that the community near the San Juan Generating Station should be prepared for the power plant to close, which will lead to lost jobs and lost tax revenue. The report states that Enchant Energy has failed to attract investors to fund the $1.5 billion project and is now looking for federal funding, such as low-interest loans from the U.S. Department of Energy and the U.S. Department of Agriculture. At the same time, the timeline to complete the project has faced delays, some of which Enchant Energy attributes to the COVID-19 pandemic.

House Natural Resources Committee passes bill addressing orphaned oil and gas wells

A bill that would help states plug and clean up orphaned oil and gas wells passed the House Natural Resources Committee on Wednesday on a 22 to 17 vote. The Orphaned Well Clean Up and Jobs Act is sponsored by Rep. Teresa Leger Fernández, a Democrat from New Mexico. “Orphaned wells pose a serious threat both to our communities and our climate,” she said during her presentation to the committee. “They can leak toxic fluids into our water and pollutants into our atmosphere, including heat trapping gas, methane.”

The freshman Democrat said there are more than 700 orphaned wells in New Mexico as well as “countless more” idle wells that could become orphaned. Leger Fernández said when visiting those wells she could taste the metal in the air and see stains around the deteriorated well pads.

Environmental groups say an EIS is needed for the San Juan carbon capture project

A group of nine environmental organizations sent a letter to the Department of Energy secretary requesting the initiation of a multi-agency environmental impact statement looking at Enchant Energy’s proposal to retrofit the San Juan Generating Station with carbon capture technology. If an EIS is required, it would delay the project substantially, but the environmental advocates point out that similar projects have gone through the process. The carbon capture retrofit will prevent the loss of tax revenue in San Juan County and preserve jobs at the coal mine and power plant. However, critics say it is an expensive project and it is unclear who will buy the electricity if it is successful. 

Related: Critics: San Juan Generating Station carbon capture proposal ‘overly optimistic’

“Enchant Energy is actively working on securing the environmental and other permits needed for the project to add carbon capture at San Juan Generating Station with the appropriate federal, state, and local agencies,” said company CEO Cindy Crane in a statement emailed to NM Political Report. “This project directly addresses the need for sustainable, reliable, low-carbon power generation necessary to meet climate change emissions goals.

Lesser prairie chicken in New Mexico could be listed as endangered

Two populations of the lesser prairie chicken could receive federal species protections amid concerns about loss of habitat. The southern population would be listed as endangered while the northern population would receive protections as a threatened species, according to a press release from the U.S. Fish and Wildlife Service. The Fish and Wildlife Service is currently accepting comments about listing the bird. The lesser prairie chicken relies on tall grass to hide from predators and, according to the press release, it has lost habitat in about 90 percent of its historic range. Factors leading to this habitat loss and fragmentation include energy development, grasslands being converted into farmland and woody vegetation encroaching into the grassland.

Where does New Mexico stand in the path to net zero emissions by 2050

The state of New Mexico has emerged in recent years as a leader in policies aimed at reducing emissions amid the climate crisis, but at the same time it has seen an increase in oil and gas production in the southern part of the state and faces challenges with inequitable access to electricity. According to a report released this month by the International Energy Agency, the reliance on oil and gas for state revenue and the need for increased access to electricity must be addressed to reach its goal of net zero emissions by 2050. The Net Zero by 2050 report looked at steps that could be taken globally to reduce the emissions. Globally, about 785 million people do not have access to electricity. That number includes people in New Mexico, especially in rural, Indigenous communities.

Recent storms have brought moisture, but fire danger remains

Recent rain and snow in parts of New Mexico have brought a temporary reprieve from the high fire dangers, but officials warn that the vegetation can dry out quickly and that precautions should be taken to prevent and prepare for wildfire. “My biggest concern and concern from fire management is that people may become complacent because we have had a little bit of rain,” Teresa Rigby, a fire education and mitigation specialist with the U.S. Bureau of Land Management, told NM Political Report. She said New Mexico is in fire season and that will continue through June and possibly into July. “It really doesn’t take that much for things to turn around and where it was wet one day the next day it can burn,” she said. Fire restrictions reevaluated in some national forests

The U.S. Drought Monitor, which releases a map every Thursday showing current drought conditions, shows slight improvements in drought in New Mexico this week compared to the previous week.

Analysis finds $8.1 billion gap in New Mexico bonding requirements, clean up costs for oil and gas

Oil and gas infrastructure could leave the state with a hefty price tag for cleanup  if companies go bankrupt, according to a new analysis completed by the Center for Applied Research. The analysis found an $8.18 billion difference between the bonds for the infrastructure in the state and the cost of cleaning up the sites. Companies issue bonds to provide financial assurance that the sites will be cleaned up in case of bankruptcy. The Center for Applied Research is an economic consulting firm that focuses on “resource valuation and market analysis pertaining to tribal lands and state trust lands,” Chad Linse, an economist with the organization, told NM Political Report in an email. According to the report, it will cost approximately $8.38 billion to clean up the oil and gas infrastructure currently located on state and private lands in New Mexico.

New Mexico utilities prepare for electric vehicles

While there may not be a lot of electric vehicles on the roads today, Kit Carson Electric Cooperative CEO Luis Reyes said his utility is taking steps to prepare for this to change in the upcoming years. Hundreds of electric vehicle charging stations have been installed around the state and utilities are preparing for more. Reyes said rural areas often lag behind when it comes to infrastructure of all kinds. He highlighted broadband gaps as an example. During the COVID-19 pandemic, students in rural areas with less access to broadband struggled with remote learning.

High density of rooftop solar can create challenges on the grid

With rooftop solar growing in demand, there are some places in New Mexico where residents are being told they cannot install solar panels due to capacity limitations. For example, Public Service Company of New Mexico (PNM) placed 178 applications for interconnection on hold in 2019 and 2020 because of capacity constraints on the feeder systems.

Eric Chavez, a utility spokesperson, said PNM never denies customer interconnection applications, however it will place applications on hold until capacity becomes available in that area. As state regulators work to update interconnection rules for utilities, they will need to address the growing popularity of rooftop solar panels and the impact that has on the grid. Interconnection refers to when a customer can generate some of their own electricity but remains connected to the grid. Utilities are currently working under an interconnection rule and manual that was last updated in 2008.

Heinrich to introduce legislation to provide a ‘glide path’ for energy producing states

Sen. Martin Heinrich announced Thursday plans to introduce legislation that would help areas that depend on revenue from fossil fuels maintain balanced government and education budgets as the country moves toward a clean energy economy. Known as the Schools and State Budgets Certainty Act, the bill would provide funding to offset the loss of revenue if money from fossil fuel extraction drops. The bill would create a baseline minimal revenue for governments based on the historical average revenue the governments received from federal minerals. If the revenue drops below the baseline, the governments would receive an energy transition payment to offset that loss. These payments will be made to eligible states, counties and tribes and would provide some budget certainty during the transition away from fossil fuels.