During her 2018 election campaign, Gov. Michelle Lujan Grisham promised to structure the state’s water resources and take serious action on the climate crisis. Taking office, she pushed for new regulations on methane emissions in the oil and gas industry and supported policies to bring more renewable electricity to the state.

But the path toward strong environmental action has also hit some snags. In 2019, a bill to fund the governor’s promised 50-year water plan was rejected in the legislature and today, the state’s budget remains strongly dependent on tax and royalties from oil and gas. Environmental groups have accused Lujan Grisham of an all-too cozy relationship with the industry.

The 2022 legislative session includes a raft of environmental bills — from a clean fuel standard to tax credits for energy storage, renewables and electric vehicles. Several bills would fund water projects and make changes to the Office of the State Engineer. Also under consideration is the controversial Hydrogen Hub Act, which if passed would provide tax subsidies to hydrogen fuel producers in the state. The bill comes with strong support from the governor’s office, but environmental groups have warned that it could expand emissions from natural gas.

Searchlight New Mexico sat down with the governor to discuss an array of environmental concerns, including the future of hydrogen, the state’s fossil fuel industry and the water crisis.

The following interview has been edited for clarity and length.

Searchlight New Mexico:
What is the benefit of a hydrogen hub to New Mexico?

Michelle Lujan Grisham:
It’s really good for the economy. We’ve got Sen. [Martin] Heinrich’s bill [the $1.2 trillion federal Infrastructure Investment and Jobs Act, passed in November] with $8 billion in investments for hydrogen. We’ve got the Department of Energy being really clear that this is an area they want to go.

I don’t make decisions just based on economic outcomes. I need to balance that with environmental concerns. Diversifying the economy is not only something we’re really good at. We have the right infrastructure for it — natural gas and coal-fired power plants, which can be converted [to hydrogen].

So what would a hydrogen hub here look like?

In high energy states like New Mexico, the people who are hit the hardest in a really robust transition to clean, renewable energy (which we are all about) are communities of color. This is a way to address environmental issues, grow the economy and protect the most negatively impacted, at-risk workers. Case in point: A thousand Navajo workers in San Juan County could have a potential boom if we do it right.

What about the effect on the environment?

Decarbonizing transportation is one of the most effective tools we have to meet our 2030 targets. And I plan to get that embodied in legislation for the whole state: every sector has to be carbon-neutral by 2050.

We think that hydrogen is a really effective tool in that effort. Not in lieu of wind and solar and geothermal or healthy soils or conservation — but in addition. So we are going after sectors like transportation. It’s a good pivot.

There’s a lot of debate about the different types of hydrogen, with growing evidence that blue hydrogen – which is produced with natural gas – is in fact not low-carbon.  

: The thing about hydrogen as a building block to decarbonize transportation is we should never find ourselves in a situation where we are using all of one thing and none of the other. We should be moving as rapidly as we can with new innovations and technologies.

The federal government is incentivizing states to race to the top and this has me competing with Louisiana. I’ll tell you that we can be greener and better — and [Louisiana Gov. John Bel Edwards] will tell you that they can be faster because they have bigger pipeline infrastructure.

What this [competition] does is create innovation for the best possible environmental situation.

 Many people in communities like Farmington and Carlsbad have expressed concerns that all this investment in hydrogen is ultimately just a ploy for maintaining the fossil fuel industry. You have supported growth in the industry in the past — for example, you signed on to a letter supporting the export of New Mexican liquid natural gas (LNG) globally. 

Well, they’re here.

I mean, it’d be great if in 1930 we’d thought about this a little differently. But we didn’t. We didn’t listen to environmental and scientific experts in 1960.

Now we have an obligation…to countries that are still burning the dirtiest coal possible. Part of that is to showcase the U.S. energy market. But it’s also to make sure that we’re creating an opportunity to decarbonize the carbon intensity in other countries where we are not seeing that.

Do you think the state can maintain its current level of oil and gas activity and still hit its climate goals? 

Probably, frankly, we could. I think the better question might be, should we? The faster we do a transition, the faster we have the transition lines done, the faster that we are not just using right. Renewables or cleaner energy systems in the state and the faster that we can export it out.

We should be the greenest state in the nation. We’re in an interesting juxtaposition, given that we are the second-largest oil and gas producers in the nation. Part of the challenge here is that while we have a lot of oil and gas activity on public lands there’s also plenty of private land. And producers can just go across to Texas and pull all that out with fewer regulations. You can flare there, you can use freshwater and we are impacted by that.

A new state law calls for the reduction of methane gas by 98 percent by 2026. Does New Mexico have the resources to enforce these new regulations, given that your predecessor, Susanna Martinez, significantly cut regulations and staffing at the state’s environmental agencies?

Did she have any [environmental regulations]? I certainly didn’t have any staff in any of the departments when I came in. 

If it’s about manpower we don’t have it. I have 83,000 open jobs in the state. We have a workforce revolution going on. This is why we have to use technology.   

We have the strictest methane rules, which the feds are now taking on. If you don’t have that, you can’t get to clean hydrogen. And I keep bragging about it even though it isn’t here yet. We aren’t quite there yet for deployment, but the components are pretty ready. We expect the industry to clean it all up.

Ok, I want to jump to water.

[Laughing] Do you happen to know where a lot of water is? Because if you could take me there, that would be great.

You’ve said before that we are in a water crisis. What does that look like from your perspective?

We are not in an extreme drought. We’re in the process of aridification. It’s only what we see that appears like extreme drought. I grew up in Santa Fe and there was no wind [here]. It wasn’t that dry, it wasn’t that hot, it was never that windy.

We are running out of water because we are drawing at a rate nobody anticipated — and it’s all related to the climate crisis. And because we’re a small state, we’ve sort of relied on this weird notion that we have lots of water. Because water is the one resource you must have — and it’s the one resource we’re running out of all around the world.

A couple of months ago, State Engineer John D’Antonio resigned, citing a lack of resources for his department. He said your office had requested that the agency submit a flat budget for several years in a row.

I don’t know why he would say that. I haven’t asked anyone to submit a flat budget — and if you look at all the other departments, none of them has asked for a flat budget. There is no such memo.

We need to rewrite what the engineer’s office looks like. John D’Antonio is one of maybe a handful of New Mexicans who would qualify to be the state engineer because you have to be an engineer. [A bill under consideration in the legislature this month would expand the qualifications for the state engineer, allowing scientists in certain water-related disciplines and lawyers to be appointed to the position.] 

We were lucky to have him, but as state engineer, you don’t do policy. You provide expertise to the lawyers, who are then involved in litigation. I need a policy person. I want a 50-year water plan. I want to know where the water is. And we have to have conservation. This is a state that doesn’t do enough conservation.

NOTE: On Feb. 2, Gov. Lujan Grisham named Mike Hamman, her former water advisor, as the new state engineer.

Lindsay Fendt got her start covering the environment as a reporter for The Tico Times in San José, Costa Rica. She covered human rights, immigration and the environment throughout Latin America before...