New Mexico lawmakers debate carbon capture legislation and liability concerns

A pivotal discussion on carbon capture and sequestration (CCS) took place during the New Mexico Legislature's House Appropriations and Finance Committee meeting on March 7, 2025. The committee reviewed an amendment to House Bill 458, which proposes a fee structure for CO2 sequestration operations, starting at a minimum of 10 cents per ton. This fee could potentially increase based on the needs identified by the Oil Conservation Division (OCD).

The amendment aims to ensure that funds are available for long-term monitoring of CO2 storage sites, which could last for decades. Representative Hernandez raised concerns about the low starting fee compared to other states, where fees range from 30 to 80 cents. Proponents argue that New Mexico's fee aligns with practices in most states, with only Illinois having a significantly higher fee due to prevailing wage laws.

Environmental advocates, including representatives from the Sierra Club and the Western Environmental Law Center, voiced strong opposition to the bill. They argue that the proposed fee is insufficient to cover potential accidents and that the state should not assume liability for CO2 storage just five years after project closure, a timeline much shorter than in other states. They contend that CCS does not effectively address the underlying emissions issues and could perpetuate reliance on fossil fuels.

Supporters of the bill, including representatives from PNM and the New Mexico Federation of Labor, highlighted the potential for job creation in the construction and energy sectors through CCS projects. They argue that CCS technology is essential for managing carbon emissions and transitioning to a cleaner energy future.

The committee's discussions underscored the complexities of balancing environmental concerns with economic development and energy needs. As the state moves forward with CCS initiatives, the implications for public safety, environmental integrity, and economic viability remain at the forefront of legislative considerations. The committee adopted the amendment, paving the way for further deliberations on the bill and its potential impact on New Mexico's energy landscape.