WASHINGTON (June 4, 2026) — The Progressive Policy Institute (PPI) today released a new report, “The New Mexico Dilemma: Balancing Net-Zero Ambitions with Energy Realities,” warning that the state’s aggressive net-zero timeline could undermine grid reliability and energy affordability unless it is paired with firm, fully-scaled, carbon-free power. Authored by Neel Brown, Managing Director at PPI, and John Kemp, an internationally recognized expert on energy markets and systems, the report calls on policymakers to prioritize technology-neutral, outcome-based strategies over fixed net-zero dates.
New Mexico is the nation’s second-largest oil producer and fourth-largest gas producer, and the oil and gas industry is the state’s largest private-sector funder and a major driver of state budget revenues. The state is pursuing a 100% clean grid by 2045 and net-zero emissions by 2050, goals set by executive order in 2019 but never codified by the legislature. Unlike energy-producing peers such as Pennsylvania and Illinois, New Mexico has no nuclear generation and very little hydropower to supply carbon-free baseload, raising the risk that retiring gas generation too quickly could create capacity shortfalls, price spikes, and lost industrial investment.
The report finds the state has cut carbon emissions by 21% since the goals were set, primarily by switching from coal to natural gas, far short of the 45% reduction targeted for 2030. New Mexico also maintains some of the strictest methane rules in the country, requiring operators to capture 98% of natural gas waste and banning routine venting and flaring. Its emissions intensity is half that of Texas.
The authors note that New Mexico is not facing the demand surges and price shocks straining other states. Both grids serving the state, the Southwest Power Pool and WECC-Southwest, hold ample reserve margins expected to remain healthy through 2030. Residential electricity prices have fallen in real terms since 2019 and have risen just 3.7% over the past year, less than half the national average increase.
To protect that advantage, the report recommends three priorities:
“New Mexico has a rare opportunity to cut emissions without sacrificing reliability or affordability, but only if policy follows the realities on the ground,” said Neel Brown. “Arbitrary deadlines are not a substitute for firm, carbon-free power that is actually built and running.”
Read and download the report here.
Founded in 1989, PPI is a catalyst for policy innovation and political reform based in Washington, D.C. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Find an expert and learn more about PPI by visiting progressivepolicy.org. Follow us at @ppi.
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Media Contact: Ian O’Keefe – iokeefe@ppionline.org
