Gov. Michelle Lujan Grisham singed a bill Tuesday intended to curb air pollution, but Republicans and fossil fuel industry supporters said the measure could raise gas prices for New Mexico drivers up to 50 cents per gallon.

House Bill 41, Clean Transportation Fuel Standards, would incentivize producers of high-carbon fuel like oil and gas to buy credits from generators or importers of low-carbon fuels to offset the overall pollution intensity of fossil fuel production.

It was intended to cause fossil fuel producers to invest in “cleaner” forms of energy and would call on the Environmental Improvement Board to devise regulations for lowering air pollution from cars and trucks. The legislation targeted reductions in such carbon emissions by 20 percent by 2030 and 30 percent by 2040 from 2018 levels.

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The bill was supported by Lujan Grisham and her cabinet, including the New Mexico Environment Department which would carry out its requirements, throughout the 2024 Legislative Session despite strong disapproval from the Republican Party.

New Mexico GOP Chair Steve Pearce upon the bill’s signing said it followed similar efforts in other left-leaning states like California and would unfairly burden New Mexico consumers at the pump. He argued the governor and her followers intended to curb the use of fossil fuels in favor for electric vehicles.

“Once again, Gov. Lujan Grisham is leading from behind California,” Pearce said. “How out-of-touch is this governor and the Democratic legislature to expect New Mexicans to pay $4 a gallon for gas when so many can barely afford to feed their families? Is the governor’s strategy to make gas so expensive that New Mexicans start accepting her electric vehicle mandate?”

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Lujan Grisham said the bill would address pollution and help New Mexico meet its goals of addressing climate change, while stimulating the economy and creating new jobs in the “clean energy” by increasing investments in that sector.

“Clean fuel standards not only decrease emissions and move us toward our climate goals, but also diversify our economy and attract new businesses to our state,” she said in a statement after signing the bill into law.

The NMED estimated the program would create 1,600 full-time jobs and 2,300 construction jobs, generating $470 million in wages and bringing $240 million in capital investment to the state from companies supporting by the credits.

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Transportation was the second-largest source of greenhouse gas emissions in the state, according to NMED, following only oil and gas production.

The administration touted its efforts to reduce such emissions, adopting various regulations throughout Lujan Grisham’s tenure that were aimed at curbing transportation emissions and propping up the state’s electric vehicle network

“This program establishes a market-based approach to reward those entities that decide to produce and import clean fuels here in New Mexico,” said NMED Cabinet Secretary James Kenney. “In order to receive a clean fuel credit, you must reduce greenhouse gas emissions.”

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Larry Behrens with oil and gas advocacy group Power the Future said the bill would stymie the fossil fuel industry in New Mexico. He argued New Mexico was the second-highest oil producer in the U.S. and its leaders should bolster the industry that accounted for almost half of the state’s revenue in the last fiscal year.

“As a national leader in oil production, New Mexico’s leaders should do all they can to support our energy industry,” Behrens said. “Instead, Santa Fe politicians want to copy failed policies that punish families by driving up prices.”

Environmental groups were quick to celebrate the bills passage, arguing on the day of the signature that the clean fuel standards would take meaningful action to limit environmental damage believed the result of fossil fuel pollution.

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“The introduction of low-carbon alternative fuels, like biodiesel, is a key step in reducing carbon emissions in the transportation industry and will deliver cleaner air and improved health outcomes in real time for New Mexico communities,” said Samantha Kao with Conservation Voters New Mexico.

“We still have a lot of work to do in combating climate pollution and decarbonizing our transportation sector, but this bill is a critical steppingstone in helping us get to a 100% clean energy future.”

Adrian Hedden can be reached at 575-628-5516, achedden@currentargus.com or @AdrianHedden on the social media platform X.