EMNRD—Two Energy Tracks

1. “Engineering in the Energy Sector”Joanna Prukop, Cabinet Secretary,NM Energy, Minerals and Natural Resources DepartmentNew Mexico Society of Professional Engineers2005 Issues ConferenceUNM Continuing Education CenterDecember 2, 2005

2. EMNRD—Two Energy Tracks Conventional Energy • Oil Conservation Division (OCD) • Oil, Natural Gas, Hi-temp Geothermal • Mining & Minerals Division (MMD) • Coal, Uranium, Copper, Molybdenum, etc. Sustainable Energy • Energy Conservation Division (ECMD) • Solar, Wind, Biomass, Geothermal

3. Oil Conservation Division: • Regulatory agency for O&G industry • Oil production: 64.5 million barrels in 2004 • Ranks 5th in U.S. • Natural gas production: 1.6 trillion cubic feet in 2004 • Ranks 3rd in U.S. • .5 tcf from coalbed methane—national leader

4. OCD Challenges • Environmentally sound development • Changing rules to facilitate effective environmental compliance and enforcement efforts. • Environmental restoration • Oversaw $2.5-million cleanup of contamination site in Eunice—largest ever by State. • Produced water • 9 barrels water for every barrel of oil produced • How to desalinate for productive use— especially for coalbed methane?

5. Mining & Minerals Division: • Regulatory agency for mining industry • Extractive energy resources: • Coal production: 27.4 million short tons in 2004 • Uranium production: Dormant, but reserves are second-largest in U.S. • Extractive non-energy mineral resources: • Copper: 269.6 million pounds (3rd in U.S.) • Others: Molybdenum, Potash, Industrial Minerals

6. MMD Programs • Coal Mine Reclamation • Encourages innovative reclamation strategies • BHP San Juan Mine—”Best of the Best” winner • Hard Rock Reclamation • Molycorp Questa Mine • Goathill North rockpile reclamation earns ”Excellence in Reclamation Award” • Abandoned Mine Reclamation • Lake Valley—historic mining area open to public • St. Cloud Mining Company earns ”Excellence in Reclamation Award”

7. MMD New Developments • El Segundo Mine (Lee Ranch Coal Co.) • First new coal mine permitted in state since 1999 • Copper Mountain expansion (PD-Tyrone) • Coordinated permitting process between MMD, NMED and BLM • PD-Tyrone Mine • Substantial ongoing reclamation at existing mine • Decision-Makers Tour

8. Energy Conservation Management Division:Clean energy—areas of responsibility: • Renewable energy • Solar, wind, biomass, geothermal • Energy conservation and efficiency • Clean-burning transportation fuels • Ethanol, bio-diesel, hydrogen, other

9. Clean Energy Benefits Positioning NM to be a leader in the new emerging energy economy will yield: • Economic benefits new jobs/revenues, cost savings. • Environmental benefits cleaner air/water. • Specific Benefits: • Reduced building energy consumption  lower utility bills. • Protection of public health  less air pollution and greenhouse gas emissions.

10. Clean Energy = Economic Development Wind: 1 MW creates 60 person-years of employment. • PNM-FPL Energy Wind Farm Photovoltaics: 35 jobs created with every 1 MW of deployment. Biomass: 4.9 jobs created for each MW of capacity.

11. ????????????????????????? Do we have the natural resources and technologies for a more sustainable future?

12. YES! • Renewable energy resources (Solar, wind, geothermal, biomass) • Energy efficiency technologies and energy-efficient products (Programmable thermostats, motion sensors, Energy Star appliances and electronics) • Alternative transportation/fuels

13. Solar Resource of NM Rank: 2nd in U.S. Sunlight energy falling on NM each year (100 million billion BTUs) is ~34 times more than total U.S. primary energy demand! New Mexico is a potential “Solar Saudi Arabia!”

14. Wind Resource of NM Estimated Wind Potential of New Mexico: 25x NM’s total energy use (429 billion kWh/yr), or 20 very large coal-fired power plants.

15. GeothermalResource of NM • Substantial • Located primarily along Rio Grande corridor and in southwest NM • Opportunities for both thermal and electric generation applications • Proven, cost-effective resource Vibrant greenhouse and aquaculture operations in NM today.

16. Biomass Resource of NM • Large and growing: • Livestock/dairy wastes (NM now ranks 7th in the nation in milk production!) • Forest thinnings • Landfill gas (methane) • Wastewater sludges • Widely dispersed; significant rural economic development potential.

17. ????????????????????????? SO…WHAT DO YOU FOCUS YOUR ATTENTION ON in SUSTAINABLE PROJECT PLANNING and DESIGN?

18. EVERYTHING! • That is, everything that consumes energy, affects consumption of energy, stores energy or transmits energy. • Consider systems interactions and integration. • Apply life-cycle costing.

19. Clean Energy Policies, Programs and Incentives in NM Renewables • Renewable Portfolio Standard • “Green Pricing” Programs (PNM’s Sky Blue) • Federal/State Production Tax Credit (1.9/1 cent/kWh) • Federal Solar Tax Credits • Biomass Equipment Tax Exemption

20. Clean Energy Policies, Programs and Incentives in NM Energy Efficiency • Energy Performance Contracting statute. • Updated Building Energy Code adopted by NM Construction Industries Commission; effective 7/2004. • Review/approval of Public School construction and renovation plans. • Clean Energy Bonding Act (2005).

21. Clean Energy Policies, Programs and Activities in NM Clean Transportation • Energy Policy Act of 1992/2005 (federal). • Alternative Fuel Acquisition Act (state). • Existing federal/state laws require the purchase of alternative-fueled vehicles, but not USE of the fuel! • Limited financial assistance available for public entities and the general public.

22. U.S. Energy Policy Act of 2005: • Clean Energy Provisions for Individuals • and Businesses • Section 1331: Energy-Efficient Buildings Deduction. • Section 1332: Credit for Construction of New Energy- Efficient Homes. • Section 1333: Credit for Certain Non-Business Energy Property. • Sections 1335-1337: Solar, Geothermal, and Fuel Cell • Tax Credits. • Section 1342: Clean Fuel Refueling Property. • ·

23. Clean Energy Grants Program • Initiated in 2004. • State funding ($1 million) for renewable, efficiency, clean transport fuels projects. • Eligible applicants: public entities. • Competitive solicitation issued Summer 2004; 60 applications requesting $4.3 million in funding. • 20 projects selected in December 2004—many community benefits. • NM Legislature provided $3 million for clean energy projects in 2005; 52 proposals requesting $6.7 million in funding.

24. Clean Energy Capital Projects:Demonstrations • State funding ($2.65 million) for clean energy projects • HB 293 (2004) provided guidance, funding. • Appropriation based on specific project proposals from Richardson Administration. • Projects include: biomass (Jemez Mountain, Ft. Bayard); solar (Schools w/ Sol); green building (Eagle Nest State Park); efficiency retrofits (K-12 public schools); and hydrogen-compressed natural gas (hythane) refueling station.

25. Other ECMD Activities inCleanEnergy Wind: Tall-tower initiative (monitoring of wind speed). Solar: Concentrating Solar Power project; many demos. Geothermal: Gaining experience with direct-use applications, including ground-source heat pumps. Biomass: Dairy farm methane-to-electricity project. Efficiency: Training on new building energy code (IECC-2003); green building initiative. Clean Transportation: New commuter rail interface; continuing expansion of alternative fuels infrastructure and use; Executive Order on renewable fuels use.

26. Clean Energy Bills in 2005 Legislative Session • Energy Efficiency and Renewable Energy Bonding Act (HB 32) • Solar Tax Credits (HB 121) • Net-Metering Bill (SB 1006) • Renewable Energy Production Tax Credit Modifications (HB 410/950) • Utility Energy Efficiency Programs/Incentives (SB 644) • Renewable Energy Transmission & Storage Authority (SB 627/HB 748) • Clean Energy Grants (HB 885)

27. …Thanks!Any questions, comments??? Let’s Keep It Clean!