Building on Our Energy Assets: How the Prewitt Industrial Cluster Will Become a Hub of Hydrogen Generation and Development

9 May 2022

Press Release

Building on Our Energy Assets: How the Prewitt Industrial Cluster Will Become a Hub of Hydrogen Generation and Development Gallup and McKinley County are gearing up for a lead role in the emerging hydrogen revolution.

When Escalante Generating Station (EGS) in Prewitt burned its last coal in the fall of 2019, the future for McKinley’s economy looked bleak. McKinley Paper Company no longer would have access to steam it needed from the electrical plant - without state help in the form of a Local Economic Development Assistance (LEDA) grant - and Peabody Energy’s El Segundo mine would lose a primary customer. McKinley County faced the prospect of losing a 20% share of its tax revenues, if those companies all closed.

In 2020, there was a breath of hopeful fresh air when Escalante Hydrogen Power company (eH2) was born with an interest in refurbishing the EGS plant to generate electricity from hydrogen instead of coal. EH2 saw great promise in combining the very well-maintained EGS facility with substantial natural gas infrastructure assets in the area, and geological features ideal for carbon sequestration (the process of removing and storing carbon from hydrogen underground).

Since eH2 came to town, I’ve learned a great deal about hydrogen and the incredible opportunities it presents to put McKinley County at the forefront in developing hydrogen and all things hydrogen-related. I expect hydrogen will fuel our future.

In February, Governor Michelle Lujan Grisham, issued an Executive Order to implement measures to foster a hydrogen economy. Recognizing the risks of climate change and the need to avert potential threats to people’s health and safety, quality of life, and economic growth, the Order is a major initiative to “invest in, innovate around, and build a clean energy future for our state,” It highlights the critical need and initial steps to build a clean energy economy that will change how we generate, distribute, and consume energy.

Ready, Set, Go ... Almost! Hydrogen shows great promise, but has challenges to overcome. The promise includes:

  • Generation of clean, reliable energy partnered with wind and solar energy development
  • That New Mexico has everything it needs to position the state at the forefront of the emerging hydrogen economy, including ample brainpower at the labs, substantial existing electrical grid infrastructure, multiple companies already developing hydrogen- related businesses, and a plan to move to a fully green, zero-carbon economy by 2045.

Among the challenges:

  • How we create a clean, zero-carbon economy, and at what cost?
  • The “chicken and egg” dilemma regarding devising and building hydrogen infrastructure, especially for hydrogen-powered vehicles that haven’t been developed yet – in significant part because fueling infrastructure and fuel don’t exist.
  • How do we get to green, “zero-carbon hydrogen” by 2045?
  • Preparing the workforce

Prompted by Biden’s Hydrogen Hub Initiative offering an $8 billion pot to split among four hydrogen hubs in the country, the Governor entered New Mexico into a four-state agreement (New Mexico, Wyoming, Colorado, and Utah) to build on the states’ high quality solar, wind, biomass, oil and gas industry, favorable geology for carbon management, world-class academic institutions and labs, and emerging public and private initiatives to develop a hydrogen economy.

The four “Western Inter-States Hydrogen Hub” states will jointly develop a proposal to the U.S. Department of Energy, and hopefully be awarded regional hydrogen hub status.

Our challenge is demonstrating that McKinley County has everything we need to develop a world-class hydrogen hub here, and to significantly demonstrate that within the 4-State Hydrogen Hub proposal.

Gallup and McKinley County’s efforts to develop a regional New Mexico hydrogen hub builds on our substantial energy and transportation assets while positioning our economic development program to occupy a unique niche and front row seat within the developing and revolutionary hydrogen economy.

Patty Lundstrom, CEcD, Executive Director, Greater Gallup Economic Development Corporation