The piece was written by Steven V. McCutcheon
It was around 9 o’clock on a February night in 2024 when the New Mexico Senate passed House Bill 41. Most New Mexicans were asleep. Most legislators had stopped asking questions. I hadn’t.
I stood on that floor and did the math out loud. Carbon credits trade between $100 and $400 per metric ton. One metric ton of gasoline emissions works out to roughly 112 gallons.
Run those numbers and you’re looking at anywhere from $0.35 to over a dollar per gallon in potential compliance costs. I asked the bill’s sponsor to tell me I was wrong. She said they didn’t know yet. They passed it anyway.
New Mexico’s Clean Transportation Fuel Program went into effect April 1, 2026. Fuel importers, distributors, and suppliers across the state are now regulated parties under a compliance system most of them have never heard of.
Despite two years of public hearings in Santa Fe, the operators who will actually bear this cost are only now learning the rule exists — scrambling to build accounting systems, hire third-party verifiers, and figure out how to purchase credits in a market still being assembled. The state’s own carbon intensity calculator won’t even be publicly available until July.
This isn’t a tax. The state will tell you that. But it is a compliance obligation landing on businesses operating on margins of less than half a cent per gallon. There is no margin to absorb it.
The cost moves down the supply chain the only direction it can. The rule sets the maximum credit price at $270 per metric ton. Fuel suppliers are already estimating the pass-through cost at 20 cents per gallon or more. Call it what you want. It spends like a tax.
The companies best positioned to benefit are the ones who supported this bill. Large integrated energy producers have spent billions building carbon capture infrastructure specifically designed to sell credits in markets like this one.
They saw this coming. They planned for it. That is smart business. But the compliance burden does not land on them. It lands on the independent fuel hauler, the small distributor, the family-owned station — the business owner who coaches little league in Carlsbad because his employees live there, his customers live there, and this is home.
When those operators can’t absorb the cost, every New Mexican who puts gas in a vehicle pays. This is not a southeastern New Mexico problem. It is a New Mexico problem.
New Mexico cannot handle another cent of higher gas prices. At the very minimum, the governor and the Environment Department should halt this program immediately. But a pause is not enough.
The legislature should do what it failed to do in 2024 and repeal it entirely. The reason that won’t happen easily is not complicated — this program is a political victory for Santa Fe progressives, and the cost at your pump is a price they are willing to let you pay.
Because I know repeal is an uphill fight, I offer an alternative. You want carbon captured? We have been capturing it for generations. Every rancher managing grasslands, every farmer rotating crops, every operator destroying methane at the source — they are doing the work this program claims to incentivize, without a billion-dollar facility and without a lobbyist in Santa Fe.
Expand credit generation to include what New Mexico’s land and its people are already doing. Let us participate in the market we are being forced to fund. That is not a radical idea. It is the obvious one — and the fact that it was never included tells you everything you need to know about who this program was written for.
This should work for New Mexico — or it shouldn’t exist at all.
Steven V. McCutcheon is a Carlsbad native, rancher, and energy businessman who previously served as an Eddy County Commissioner and New Mexico State Senator. He lives and works in southeastern New Mexico.
