‘Watershed moment’ as NM gears for clean energy transition

New Mexico’s economic foundations are rumbling with change as the state and nation embark on an accelerated path to a non-carbon economy, inspiring local leaders to seize the moment in collaborative efforts to embrace the forthcoming transformation.

Dan Arvizu, New Mexico State University chancellor and former director of the U.S. Department of Energy’s National Renewable Energy Laboratory, called it a once-in-a-generation “tipping point.”

“It’s a watershed moment in history, and we can’t afford to miss the opportunity,” Arvizu told the Journal. “It’s too important not to pay attention and do something. We need to put things in place with the objectives, strategies and means to embrace it.”

To do that, the state’s research universities and labs, public agencies, private think tanks and business groups are working together to identify both the challenges and opportunities New Mexico faces, and create detailed strategies to guide the local economy in new directions. That includes:

• An NMSU-led initiative, funded by the DOE, to develop new academic and career-training programs at state universities and colleges to prepare the workforce for the clean-energy economy, assist existing businesses and startups to develop new products and services while attracting more companies to New Mexico, and create a “clean energy road map” for economic development with direct participation from communities across the state.

• A national initiative led by the Massachusetts Institute of Technology to chart a path for transitioning away from fossil fuels and carbon-based production to help impacted communities harness emerging economic opportunities. That includes a specific case study of New Mexico with participation by a team of local public and private-sector leaders.

• A new collaborative effort that the state’s three research universities, two national labs and the University of Texas at El Paso launched this year. It unites top executives from those institutions to jointly analyze the economic changes underway and hammer out ways to benefit from them along the Rio Grande corridor.

At a crossroads

Some fundamental issues have brought the state and nation to a crossroads, Arvizu said.

First, the pandemic devastated the economy and tore open the country’s vulnerable dependence on foreign supply chains for everything from computer chips to health care products and services.

That, in turn, exposed the underlying decline of U.S. competitiveness in the global economy and a need to build back U.S. strength in domestic manufacturing with 21st century technology.

Then, the climate crisis exploded into a national call to action under President Joe Biden. That issue now tops the administration’s agenda with new policies and proposals that directly impact fossil-fuel dependent states like New Mexico, such as temporarily freezing new oil and gas leases on federal lands as the administration draws up strategies to replace hydrocarbon production and consumption over time with clean, renewable resources.

Those foundational issues create huge challenges for New Mexico. But they also create big opportunities, particularly with the Biden administration seeking congressional approval for $2.3 trillion in infrastructure investment nationwide, Arvizu said.

The problem is how to capture a significant chunk of that federal investment and use it in ways that can set New Mexico on a sustainable development path for local communities to prosper as fossil fuels decline. That’s complicated, because so much is happening at once, Arvizu said.

“We’re preparing for a low-carbon economy while also coming back from the pandemic,” he said. “It’s like building a raft while shooting the rapids. … It’s all coming at us at the same time.”

Three-point focus

To navigate the challenges, NMSU’s statewide collaborative initiative – called Innovation and Commercialization for a Regional Energy Workforce, or iCREW – has united about 200 public, business and community leaders in 12 regional working groups across the state to help build the clean energy road map. To lead that effort, NMSU subcontracted the New Mexico-based North American Intelligent Manufacturing Initiative, or NAIMI, which held two statewide online town halls since last August, the latest one last Tuesday.

“We call it a ‘bottom-up’ road map,” NAIMI Executive Director Thomas Bowles said. “We’re not telling people what we need to do. They tell us what the issues are and give input on how we can move forward and create jobs.”

The group has identified three strategic targets for economic development, including broadband infrastructure, local hydrogen production, and the information technology and cybersecurity industry. Of those, participants singled out broadband as the No. 1 issue.

“If you don’t have it, you can’t get companies to locate, build and operate here,” Bowles said.

The governor and state Legislature approved about $130 million for local broadband development this year. And the Biden administration has proposed $100 billion in broadband investment nationwide, with potential benefits for New Mexico.

Hydrogen production as well holds significant promise, building directly on the state’s existing fossil fuel infrastructure and its future renewable development. Some large projects are already underway in the Four Corners, including one plan to turn San Juan County into a regional hub for hydrogen production that supplies clean electricity and fuel for transportation and industry.

Biden’s plan also calls for significant federal investment in building the hydrogen economy, and New Mexico’s federal legislators are pursuing funding for the state. U.S. Rep. Teresa Leger Fernández and Sens. Martin Heinrich and Ben Ray Luján sent a joint letter to the DOE this month advocating for New Mexico to become the “world’s premier center of excellence” for hydrogen production, research and workforce development.

New Mexico already has a robust presence in IT and cybersecurity through career training programs at the state’s research universities and community colleges, advanced research and development at the universities and national labs, and budding cybersecurity businesses here. And with an estimated 2.1 million in unfilled cybersecurity jobs, that industry offers huge training and employment opportunities, Bowles said.

“Cybersecurity is a huge, growing job market,” he said. “It’s on everyone’s radar. New Mexico could potentially capture tens of thousands of jobs in that area.”

Other opportunities

New Mexico can capture a lot more federal investment in many other areas, including some of the $600 billion Biden proposes for roads, bridges and highways, said NMSU economics professor emeritus Jim Peach. Some $900 billion more is proposed for everything from public housing, transportation and water projects to electric vehicle infrastructure, public schools, home and building energy upgrades, and clean-energy research and development.

New Mexico could especially tap into $100 billion Biden has proposed for renewable generation and grid modernization, including extensive transmission development. The state is particularly competitive in those areas, given its vast solar and wind potential.

“There’s a lot of stuff here New Mexico can grab onto,” Peach said. “The problem is, we don’t yet know what will be included in a final bill.”

Indeed, Republicans firmly oppose Biden’s massive infrastructure plan, and Congress isn’t likely to approve anything for months.

But the state’s congressional delegation will fight for a significant share of whatever is approved, said Heinrich.

“If we can get this across the finish line, we will fight for each and every project we qualify for,” Heinrich told the Journal. “We could get additional transmission in the state, roads without potholes, and jobs in hydrogen and clean energy development.”

New Mexico could be a shoe-in for some things, such as part of the $35 billion Biden proposes to employ people in plugging abandoned oil and gas wells and restoring land used for hard-rock and uranium mining.

“Looking at the criteria in some areas, New Mexico can check almost every box,” Heinrich said. “New Mexico will line up very favorably for investments in places like the San Juan and Permian basins.”

Still, the economic transition is not just about winning grants, but building back in ways that lead to sustainable development, and that’s where iCREW and other strategic planning initiatives come in, said NMSU engineering Associate Dean Patricia Sullivan.

“We’re pulling in thought leaders from across the state to develop a shared vision,” Sullivan said. “We’re seeing people come together to work collaboratively in ways that they haven’t in the past.”