Legislation that would enact new standards for gasoline and vehicle fuel in New Mexico cleared its first committee on Saturday.
The Clean Transportation Fuel Standards, HB 41, passed the House Energy, Environment and Natural Resources Committee on a 7-4 party-line vote. It now heads to the House Judiciary Committee.
The bill would require the Environmental Improvement Board to adopt standards that would reduce the carbon intensity of transportation fuels by 20 percent from the 2018 levels by 2030 and 30 percent by 2040.
Those who exceed standards can purchase credits from the clean fuel market. Those credits are sold by entities that generate clean energy and have fuels below the standards. That could include utilities, school districts, renewable diesel companies or public transit districts.
The bill is sponsored by Rep. Kristen Ortez, D-Taos, Christine Chandler, D-Los Alamos., and Sen. Mimi Stewart, D-Albuquerque.
According to the fiscal impact report, HB 41 could lead to increased investments into alternative fuel production as well as distribution infrastructure. That could include gas stations that provide ethanol, hydrogen fuel cells or charging stations for electric vehicles.
According to the U.S. Department of Energy, ethanol has 44 to 52 percent less carbon intensity than petroleum-based fuels. However, there have been studies in recent years that indicate corn-based ethanol may actually be worse for the climate than regular gasoline.
Ortez said the bill ensures that New Mexico will not be left out in one of the most significant global opportunities coming to the state. Additionally, she said the bill opens the door for more than 1,600 “really good-paying permanent jobs.”
Ortez said the bill could bring $240 million in investments into quick state, low-carbon fuel projects.
She said that in Oregon, which has a clean fuel standard, the state saw $300 million in the low-carbon fuel credit market.
“Without this bill, the new energy boom that we’re experiencing all around the country will leave New Mexico behind,” she said.
Additionally, she said it will improve New Mexicans’ health, especially in terms of respiratory health.
Ortez acknowledged that opponents, including some of the state lawmakers, believe the bill will harm the oil and gas industry that provides critical funding for the state coffers. However, she argued that will not be the case. Instead, she said the industry can benefit from the investments that companies are already making to lower their carbon emissions.
She said the companies are already producing cleaner fuels, but those fuels are bypassing New Mexico and going to states like California, Oregon and Washington.
In addition to concerns about the impact to oil and gas, some critics say HB 41 could disproportionately hurt low-income, rural households that may need to drive farther distances to get to work and may not have cars that can handle higher levels of ethanol in gasoline.
Rep. Rod Montoya, R-Farmington, said legislators need to keep in mind the poverty levels in New Mexico when they’re “talking about something that could very well hit the pocketbook.” Montoya has been a vocal critic of the energy transition and pushes for clean fuel. His district is also one that relies heavily on the oil and gas industry and was impacted by the closure of the coal-fired San Juan Generating Station.
Montoya also spoke about biodiesel and gasoline that includes biofuels such as ethanol. He said many vehicles, especially older vehicles, are not able to handle high levels of ethanol in their gasoline.
Ortez said there are consumer advocates who support the bill and that the board involved in the rulemaking should include someone who represents consumers.
She said that since 2001 there have been blended fuels that include 15 percent ethanol. She said above that level is where modifications may be needed for vehicles. Ortez said this is a great opportunity in low-income communities for utilities to focus on helping consumers make those modifications.