By Jerry Redfern, Capital & Main
Over the past month, in public meetings stretching from the Navajo Nation to Albuquerque, public officials and company representatives unveiled a picture of a new hydrogen energy industry being built in the northwest corner of New Mexico. The presentations reveal hydrogen production, transportation, power generation and carbon sequestration projects arcing across the Navajo Nation to Farmington and down to the I-40 corridor between Gallup and Albuquerque. Most of the projects are underway, and it’s clear they’ll rely on fossil fuels.
Tallgrass Energy sits at the center of all this activity and has the backing of the state’s biggest political player, New Mexico’s governor. The Denver-based company operates more than 7,000 miles of natural gas pipelines stretching from Oregon to Ohio, and it’s going all-in on creating the necessary pieces of a new economic base in New Mexico’s second-largest fossil fuel producing region. The region’s natural gas holds the key to many of the projects
“Hydrogen is huge!” Gov. Michelle Lujan Grisham proclaimed while speaking at an event in Farmington in April. What came next is what many in the region fear.
“Hydrogen uses the natural gas resources here we don’t know what to do with,” she said.
Actually, plenty of people know what to do with natural gas. The issue is that fewer and fewer people want to use it, even as more and more of it is being produced. Historically, natural gas has been used most significantly for electrical grid power generation in the U.S., but its use in that arena is declining as renewable energy prices drop in the face of government climate policies and ever-cheaper solar technology.
Meanwhile, natural gas prices have tanked due to a production glut caused by ever-increasing oil production using hydraulic fracturing, or “fracking,” in places like the Permian Basin, shared between New Mexico and Texas. Producers want the oil, which brings a market price well above the cost of its production. But, pulled from the well, that fracked oil comes commingled with the less desired natural gas. Over the past month, natural gas prices dipped below zero at a main pipeline transit hub in Texas due to the glut. Some companies are storing gas underground, awaiting better days and prices.
Enter hydrogen. The most plentiful element in the universe is a perfectly clean fuel when used to make electricity in a fuel cell. It’s generally cleaner than natural gas when burned to make heat, though the process produces nitrogen oxides that the EPA says damage the human respiratory system and contribute to acid rain.
The crux lies in how you make your hydrogen, which rarely exists on its own on earth. The cleanest, most energy-intensive way breaks water molecules into hydrogen and oxygen using renewable energy. The common way breaks off hydrogen atoms from the methane in natural gas. Either way, it takes more energy to make hydrogen than it provides when converted to useful energy. When made with natural gas, the process also produces a lot of climate-damaging carbon dioxide. That defeats hydrogen’s clean bonafides unless the carbon dioxide is captured and buried underground, a process that uses even more energy.
Furthermore, the natural gas production and transportation process often leaks, sometimes a lot. That gas is mostly methane, which is 80 times more capable of warming the atmosphere than carbon dioxide in the first 20 years after it’s released.
The federal government incentivized so-called low-carbon hydrogen production from natural gas with carbon sequestration in the Inflation Reduction Act of 2022. Many worry that this will lead to increased greenhouse gas emissions in light of New Mexico’s rocky track record of policing its oil and gas producers. All of this means a fuel promoted to fight climate change could actually exacerbate it, and cost a lot, too.
“How companies choose to produce that hydrogen will fundamentally be a business decision they must make,” said Michael Coleman, director of communications to Gov. Lujan Grisham. “Our greatest opportunity as a state is producing hydrogen from a range of feedstocks.”
Gov. Lujan Grisham has stumped for hydrogen for years, with little support from the state’s Legislature or environmental groups. She also sought a multibillion-dollar grant from the federal government to create a multi-state hydrogen ecosystem centered in New Mexico’s San Juan Basin, but the feds snubbed it last October. Hydrogen investments face a bumpy road in other states as well.
Nonetheless, Lujan Grisham forges on — she went to the Netherlands last week to drum up more hydrogen investments. Meanwhile,…
Read More: Like it or not, a hydrogen ecosystem is coming to New Mexico