basin resources summer 2014
DESCRIPTION
Basin Resources is about the local people, resources and technology in the energy community of San Juan County.TRANSCRIPT
�������������� ��������� � ���������������������� ��������������
�������
��� ����� ���� ����������������������� �� ��� ��� ������ ��������������� ��� ���� ��� �� ���� ��������
BASIN RESOURCES4
www.basinresourcesusa.com • SUMMER 2014
Summer 2014
San Juan Basin has vital role 12Rich in energy resources, state a big part of U.S. picture
Four Corners Oil and Gas Conference 8Conference brings industry leaders, new ideas
Praxair expands 50Gov. Susana Martinez visits Kirtland plant
School of Energy classes long distance 58SJC online courses lead Vann to degree
Energy News 61Across the nation
BLM 2015 Budget Plans 40President wants 133.7 million for BLM’s Oil and Gas Management plan
Should energy independence be 46
America’s goal?
contents
22
28
16
USDA invests in renewable energy
Energy WeekIndustry leaders show eighth-graders the importance
of Basin’s energy production
Desk and DerrickLocal club has leaders at
international, regional and local levels
34 56Open for businessMuseum’s new energy
wing up and running
Repurposing roads, cementDirt Bandit’s new facility will have state’s
only asphalt recycling equipment
BASIN RESOURCES6
www.basinresourcesusa.com •SUMMER 2014
Editor’s note
New Mexico continually and inevitably
feels the pressures that accompany a
boom/bust oil and gas economy.
Rightly so for a state that historically
relies upon anywhere from 15 to 25 per-
cent of state government revenue coming
from the oil and gas industry.
Here in the San Juan Basin we struggle
and thrive around those numbers. There’s
been little to smile about here for awhile
with the glut in natural gas taking its toll
on rig numbers.
However, in the last few years we’ve
gone from a glimmer of hope to guarded
optimism.
Producers currently are putting some
money behind that optimism and we
again are looking at putting some forward
progress in the Basin.
Work has begun on the San Juan
College new School of Energy.
The vision of the School of Energy is
to become a national leader in energy
production technical education, and to
provide training in all energy sectors,
including oil and gas, power generation,
and coal.
Students will have the opportunity to
learn everything from how energy is pro-
duced to how it is refined and prepared
for consumption. Instructors will focus on
training from a global perspective.
Optimism remains high that the
Mancos Shale development could provide
a big turnaround in state oil production.
Excluding federal offshore areas, in
2013 New Mexico ranked sixth in crude
oil production in the U.S.
New Mexico’s 2013 oil production was
approximately 97 million barrels – a 17
percent increase from 2012, according to
the New Mexico Oil & Gas Association –
thanks to the Permian Basin down south,
U.S. Senator Tom Udall, D-N.M.,
recently pushed for the export of liquid
natural gas in order to support natural gas
exploration in the state.
Udall wrote in a letter signed by 33
other U.S. Senators. The letter was sent to
the Department of Energy, asking the
Energy Department to consider exporting
LNG to Europe and Japan; both nations
are in need of natural gas to “fuel their
economies.”
In New Mexico, more than 100,000
jobs are supported by the oil and gas
industry. These jobs add $11.2 billion to
New Mexico’s gross state product, or
14.2 percent of its wealth.
“This is a tremendously important
industry to New Mexico. Most New
Mexicans know this industry contributes
a lot to the state,” Udall said.
The San Juan Basin has the educational
background and a well-trained workforce
ready for any task that is put before us –
not to mention our tenacity that has come
from years of dedication to thriving in the
pressure-filled boom/bust economy.
T. Greg Merrion, owner of Merrion Oil
and Gas, told a group of Koogler Middle
School students during an Energy Day
presentation that one thing is certain,
“The demand for energy is great. There is
more demand for all energy than we can
produce,” he said, and that is what will
keep the energy companies eyeing the
San Juan Basin.
Ready, willing and more than able
Don Vaughan
puBliSHER
Cindy Cowan Thiele
EDiTOR
Debra Mayeux
Dorothy Nobis
CONTRiBuTiNG WRiTERS
Josh Bishop
CONTRiBuTiNG pHOTOGRApHER
Suzanne Thurman
DESiGNER
Shelly Acosta
DeYan Valdez
Aimee Velasquez
SAlES STAFF
For advertising information
Call 505.516.1230
www.basinresourcesusa.com
Basin Resources magazine is published four times ayear by Majestic Media. Material herein may not bereprinted without expressed written consent of the pub-lisher. Opinions expressed by the contributing writersare not necessarily those of the publisher, editor orBasin Resources magazine. Every effort has been madeto ensure the accuracy of this publication. However thepublisher cannot assume responsibility for errors orommissions. © 2014 Basin Resources magazine.
Majestic Media
100 W. Apache Street
Farmington, NM 87401
505-516-1230
www.majesticmediausa.com
Cindy Cowan Thiele
Every other year, the Four Corners Oil and Gas Conference
brings industry professionals together to learn about new technol-
ogy, new and changing regulations and the latest information, and
allows time for important networking.
This year’s conference will be held May 7 and 8 at McGee Park.
While those attending the conference will enjoy the exhibits, the
speakers and the breakout sessions, the conference committee will
continue to oversee the conference, making sure everything goes
smoothly and that the event is a success.
The biannual conference is put together as a joint partnership be-
tween API (Four Corners Chapter of the American Petroleum Insti-
tute), SPE (Four Corners Section of the Society of Petroleum
Engineers), NACE (Sandia Mountain Section of NACE Interna-
tional), ASSE (Four Corners Chapter of American Society of Safety
Engineers), the Desk and Derrick Club of Farmington, and the
Farmington Chamber of Commerce.
The planning for the conference begins the January prior to the
year the event is scheduled. For 17 months the conference commit-
tee researches topics, possible speakers, rules and regulation changes,
and industry news. Each month, the committee gets together to dis-
cuss and to plan the conference. It takes a dedicated committee and
conference coordinator and the strong leadership of a conference
chairman. It takes countless hours and a lot of hard work.
Karen Ortega, the Safety Director for M&R Trucking, Inc., is the
conference chairman – a position she has held for the past three
conferences. Karen’s exceptional leadership skills, her vision for the
conference and her ability to bring volunteers together has made her
a great chairman. Karen represents ASSE on the committee.
Others serving on the committee include Ruth Duval who repre-
sents the Desk and Derrick Club of Farmington and is the Health
and Safety Adviser for BP; Megan Forshey represents SPE and
works for Halliburton; Ron Gladden represents APT and works for
Emerson Process Management; Jim Holgate represents ASSE and is
the Business Manager for Reliance Medical Group; David Martinez
represents API and works for Flogistix; Runell Seale represents the
Desk and Derrick Club of Farmington and is an environmental sci-
entist for Enterprise Field Services; Melissa Spencer works for
ConocoPhillips and is the 2014 conference co-chairman; Jan
Tomko is the conference coordinator; Gavin Tweedie represents
SPE and is an engineer for Exterran; Chris Watts represents NACE
and works for Williams; Scot Williamson represents NACE and is
the District Operations Manager for Corrpro Companies Inc.; and
Audra Winters is President/CEO of the Farmington Chamber of
Commerce.
Linda Dean, retired; John Roe, an engineer for Dugan Produc-
tions; and Rod Troxell, a Healthy Safety and Environmental engi-
neer for PESCO, are all past chairmen of the conference and serve as
advisers.
BASIN RESOURCES8
www.basinresourcesusa.com • SUMMER 2014
ranDy PaCheCo
Dean of SChool of energy
San Juan College
Conference brings industryleaders, new ideas together
* Conference 15
BASIN RESOURCES10
www.basinresourcesusa.com • SUMMER 2014
Dorothy Nobis
Basin Resources
in 1994, visionaries in the oil and gas
industry decided to host an oil and gas
conference to bring together professionals
in the business to learn about new rules
and regulations that affected the oil patch.
that first conference was held at the
Farmington Civic Center and was organ-
ized by six organizations – chapters from
the American Petroleum institute, or APi,
the society of Petroleum Engineers, or
sPE, the National Association of Corro-
sion Engineers, or NACE, and the Ameri-
can society of safety Engineers, or AsE,
along with the Desk and Derrick Club of
Farmington and the Farmington Chamber
of Commerce. Each partner had – and
still has – a vested interest in the oil and
gas industry in the san Juan basin and
the Four Corners and had volunteers
serve on the conference’s Executive
board.
today, 20 years later, the Four Corners
oil and Gas Conference has grown, tak-
ing its “home” from the Civic Center to
san Juan College to McGee Park as atten-
dance demanded more growth and more
room.
Professionals, businesses come together
Four Corners Oil and Gas Conference set for May 7 and 8
Debra Mayeux
Basin Resources
each day the citizens of the united
States consume 25 percent of the world’s
energy. These citizens make up only 5 per-
cent of the world’s population, and in ac-
tuality produce a good part of the earth’s
energy.
The u.S., however, cannot go it alone.
according to its usage-to-production ratio,
the united States needs 20 million barrels
of oil a day, but produces less than 10 bar-
rels. The difference has to be accounted for
somewhere, and it is through trade with
foreign countries.
“Other countries we import oil from are
a little sketchy. We’re not energy inde-
pendent. It’s not the end of the world, but
it is not an ideal situation,” T. Greg Mer-
rion, owner of Merrion Oil and Gas, told a
group of Koogler Middle School students
during an energy Day presentation at the
Farmington Museum.
“Five percent of the world’s population
uses 25 percent of the world’s energy in a
day. We are energy junkies. It’s because of
our way of life,” Merrion said.
Consumption of energy can be broken
down into five categories of energy
sources. Petroleum is the most popular
source of energy with a 36 percent usage
rate. Natural gas is at 27 percent, coal is at
18 percent, while nuclear and renewable
energy sources are tied at 9 percent, Mer-
rion said.
He also explained that energy is needed
to improve our quality of life. “It makes
our lives simpler and better, but we take it
for granted every day.”
The united States has long been able to
consume so much energy because it has
been at the forefront of developing new
technologies not only to extract fossil
fuels, but to use them efficiently. Coal re-
mains the number one source for electric
production, while oil and natural gas can
be used for power, heat, and automobiles,
among other things.
The San Juan basin is rich in all three
sources – coal, oil and natural gas.
“In general, the natural gas industry is
the foundation upon with the local econ-
omy has been based,” Farmington Mayor
Tommy roberts said. energy production
has improved the quality of life in Farm-
ington and San Juan County by providing
for high paying jobs.
Higher wages provide residents with
more disposable income, and that helps
boost the city’s and county’s tax base
through gross receipts tax revenues. “When
natural gas is strong, we have a healthy
local economy,” roberts said.
Historically, the San Juan basin was the
fifth largest oil and gas basin in the united
States. The oil boom could be credited
with the building up of this community.
The busts also have been felt by everyone
when they have occurred.
With that history behind us, the basin has
also established a hub for energy education.
Construction has begun on the new more than 60,000 square feet San Juan College School of Energy has begun. It is expected to be complete in May of 2015.
San Juan Basin has vital roleRich in energy resources, New Mexico a big part of U.S. picture
BASIN RESOURCES12
www.basinresourcesusa.com • SUMMER 2014
“The state of New Mexico has enjoyed
the benefits of the oil and gas industry
for many years. It has contributed greatly
to our economy and provided needed
jobs to our residents. The San Juan Col-
lege School of Energy is proud to be an
active participant in preparing students
for a career in oil and gas,” Randy
Pacheco, dean of the San Juan Collge
School of Energy said.
At this time, the United States has a
strong reserve of natural gas, which has
driven the cost down. Because of the re-
serves, many people, including our U.S.
Senators and Congressmen, have advo-
cated for the exportation of natural gas.
U.S. Senator Tom Udall, D-N.M., re-
cently pushed for the export of liquid
natural gas in order to support natural
gas exploration in the state.
“This is a tremendously important in-
dustry to New Mexico. Most New Mexi-
cans know this industry contributes a lot
to the state,” Udall said.
The oil and gas industry employs
68,000 New Mexicans and historically
has provided 50 percent of the state’s
budget through royalties and taxes.
The San Juan Basin has a potential to
develop “tens of trillions” of cubic feet of
natural gas to be marketed inside and
outside of the United States, according to
New Mexico Oil and Gas Association
President Steve Henke. The drilling,
however, has been decreased because nat-
ural gas prices are not high enough to
Because of the U.S. strong natural gas reserves, many people including our U.S. Senators and Congressmen haveadvocated for the exportation of natural gas. The San Juan Basin has a potential to develop “tens of trillions” ofcubic feet of national gas to be marketed inside and outside of the United States, according to New Mexico Oiland Gas Association President Steve Henke.
SUMMER 2014 • www.basinresourcesusa.com
provide a high rate of return. There also
have been concerns from oil and gas in-
dustry officials regarding the regulations
placed upon extractive industries utiliz-
ing public lands.
“There’s a lot of natural gas that can
be developed, but we need the support of
the BLM for that to happen,” Henke said.
Udall, however, said there has been
Congressional legislation to streamline
the process for permitting in both the
Permian and San Juan Basins.
With easier access and a global market
for natural gas production could increase.
“The world is hungry for U.S. natural gas,
and the geopolitical implications of LNG
exports are tremendous. To bolster their
own energy and national security pro-
files, nations around the world are seek-
ing opportunities to diversify their
energy supplies. For the first time, The
United States is being recognized as one
of their options. Responsible develop-
ment of natural gas can benefit the envi-
ronment and our international priorities,”
Udall wrote in a letter signed by 33
other U.S. Senators. The letter was sent to
the Department of Energy, asking the
Energy Department to consider export-
ing LNG to Europe and Japan; both na-
tions are in need of natural gas to “fuel
their economies.”
Roberts said many people believe the
move to export liquefied natural gas
would create energy independence in the
United States significantly. This also
could spur more development of re-
sources in the San Juan Basin.
“Our students come from throughout
the Southwest and the Four Corners and,
when the new School of Energy is com-
pleted in the spring of 2015 and with
the support of our partners in the indus-
try, we’ll be able to provide that educa-
tion and training to students across the
country and the world. Proper training
and education are critical to the industry
and to the success of industry employees
and we are pleased to be a partner in that
process,” Pacheco added.
If oil and gas exploration and extrac-
tion increases, that would create more
jobs, and the mayor pointed out the city
and county want to see more high paying
jobs created in the region.
One thing is certain, according to
Merrion. “The demand for energy is
great. There is more demand for all en-
ergy than we can produce,” he said, and
that is what will keep the energy compa-
nies eyeing the San Juan Basin.
BASIN RESOURCES14
www.basinresourcesusa.com • SUMMER 2014
This year’s conference has 20 new exhibitors and 302 total ex-
hibitors. As of late April, more than 1,900 people have registered
for the event, and registrations continue to come in. While there is
no charge to attend the seminars or the trade show, all attendees
must be affiliated with the oil and gas industry in some capacity.
The speakers will share their knowledge and experience in areas
that include drilling production, safety, environmental corrosion,
technology, the Mancos Shale, water and an update on San Juan
College’s new School of Energy, which is now under construction.
The keynote speaker will be David Martin, the New Mexico Sec-
retary of Energy, Minerals and Natural Resources.
The Four Corners Oil and Gas Conference has evolved from a
one-day event at the Farmington Civic Center, to a two-day event
at McGee Park. The evolution and the growth of the conference
have come from those who work in the oil and gas industry. Those
professionals have dictated our speakers and our exhibitors. They
come from throughout the Four Corners and beyond. The come,
because this conference is one of the best in the country.
The oil and gas industry continues to bring much needed rev-
enue to our community and to our state. To be part of that industry
is an honor and a privilege. I’ve worked in the fields, I shared the
highs and lows of the industry and I’m proud to say that I now
work to provide the training those professionals need to succeed in
the industry.
If you’d like more information on the conference, call Jan Tomko
at 505.325.0279 or 505.258.1748.
Conference continued from 8
BASIN RESOURCES 15
SUMMER 2014 • www.basinresourcesusa.com
Nearly 1,500 middle school students from Shiprock to Dulce learned about
energy in the San Juan basin during the annual energy Week presentations at
the Farmington Museum.
energy Week activities were sponsored by several oil and gas companies
throughout the region and were coordinated by George Sharpe, of Merrion Oil
and Gas. Sharpe helps put together the week, which allows eighth-grade stu-
dents to get a taste of the energy industry from professionals living and working
in their hometown.
“Many of the students have parents who work in the industry. It’s nice for
them to see what they do,” said Patrick Sannes, a teacher at Koogler Middle
School in aztec. Koogler had the first group of students to go through the pro-
gram when energy Week kicked off on april 23.
Industry leaders show
eighth-graders the importance
of Basin’s energy production
Debra Mayeux
Basin Resources
SUMMER 2014 • www.basinresourcesusa.com
The students had an opportunity not only to hear from profes-
sionals, but also to see much of the equipment used in the field.
There was a pumping unit, separator, compressor, driving simula-
tor and fracking presentation in the museum’s parking lot. The
students were told about the dangers of being around such equip-
ment and were reminded that safety is the No. 1 priority.
“The safety and equipment presentation complements what
they learn in the classroom,” Sannes said. “It’s nice for the compa-
nies to volunteer their time to this. It is a big community service
that is greatly appreciated.”
The Koogler students heard directly from the owner and presi-
dent of Merrion Oil and Gas, T. Greg Merrion, who shared infor-
mation with them about the development of oil and gas in the
basin and importance of fossil fuels in energy creation.
The fossil fuels that make the San Juan Basin a rich field for
oil, gas and coal extraction are here because this region once was
a swamp. Dead plant and animals from the swamplands became
trapped in sediment – sand and silt, where they sat and cooked
for more than 100 million years. The result was the oil and gas
extracted from the ground today, Merrion explained.
www.basinresourcesusa.com • SUMMER 2014
5700 east main • Farmington • 505-325-8826open till midniGHt monday - Friday
Parts and Service
We’re More Than Just Parts!
Grille Guards • Headache racks • Bumper replacements tire chains & more!
products
We carry
“It nice for the companies to
volunteer their time to this. It is a
big community service that is greatly
appreciated.”
— Patrick SanneS
koogler Middle School
teacher
BASIN RESOURCES 19
SUMMER 2014 • www.basinresourcesusa.com
He showed a picture of a per-
son pedaling a bicycle and ex-
plained how much man power it
would take for the bike rider to
create enough energy to light one
bulb.
“It would be expensive. It
would be exhausting,” he said. “If
all we had was human energy to
move things around and do
things it would take a lot of time
and be very expensive.”
At issue is that energy im-
proves the quality of life for hu-
mans by making their lives
simpler. Citizens of the United
States know this and they use 25
percent of the world’s energy in
one day. This happens even
though the population of the U.S.
makes up only 5 percent of the
world’s population.
“We are energy junkies,” Merrion said. “It’s become our way
of life.”
Of that energy used by the U.S., 36 percent is petroleum, 27
percent is natural gas, 18 percent is coal, 9 percent is nuclear
and 9 percent are renewable.
“We need to expand our use of renewable energies. However,
fossil fuels will continue to be our major source of energy in
the future,” Merrion said.
The students asked about the feasibility of nuclear power,
and Merrion said nuclear is a viable option.
“I am pro-energy. I love all of the sources,” he said. “Renew-
ables have their place and they supplement fossil fuels.”
He explained to the students that it is important for them to
be good stewards and the energy companies are their neighbors
and do not take the land or the product they are extracting
from it for granted. “It is very expensive to extract oil and gas,
and we don’t want to see it wasted,” Merrion said.
Another student asked if there would be concern from oil
and gas producers about people relying more on alternatives or
simply not using as much energy.
“The demand for energy is great,” Merrion said. “I’m pretty
confident oil companies are not concerned they will suffer from
conservation.”
Different groups of students heard from different oil and gas
companies, and the week culminated with the public showing
of the movie FrackNation at the Farmington Museum.
BASIN RESOURCES20
www.basinresourcesusa.com • SUMMER 2014
The students had an opportunity not only to hear from
professionals, but also to see much of the equipment
used in the field.
BASIN RESOURCES 23
SUMMER 2014 • www.basinresourcesusa.com
Dirt Bandits new facility will have
state’s only asphalt recycling equipment Debra Mayeux
Basin Resources
Dirt bandit asphalt Service will expand its
business services to the community this summer
with the addition of an asphalt and concrete
recycling center at its new location – 4100 Twin
Peaks blvd. in Farmington.
Phil McKinney, owner of bandit, purchased
the property, which was an old gravel pit, and
www.basinresourcesusa.com • SUMMER 2014
“This is better than a crushing
facility. We’re not digging.
We’re just recycling free material.”
— Phil Mckinney
Dirt BAnDits AsPhAlt service
began moving from his former location on
Piñon Street, where he had to seek special
use permits from the city of Farmington
each time he wanted to operate his machin-
ery.
McKinney is in the process of building a
75,000-square-foot building at the new lo-
cation, and he is eagerly awaiting the arrival
of his state-of-the-art asphalt recycling ma-
chine. Once it is on site and ready to oper-
ate, the plant will be able to recycle asphalt
and concrete with rebar. The materials will
go in and come out with a 100 percent cer-
tification as a Leadership in Energy and En-
vironmental Design, or LEED, recycled
product.
“The real bonus is the asphalt and con-
crete is engineered and can be used any-
where. It will compact correctly,” McKinney
said.
McKinney has owned several businesses
in Farmington. When he started, Dirt Bandit
was a street sweeping business that cleaned
parking lots. McKinney expanded that serv-
ice to include asphalt patching and resurfac-
ing. “I got so busy, I ran out of asphalt,” he
said.
McKinney began researching the process
of recycling asphalt. He attended classes and
seminars, which led to the purchase of as-
phalt recycling equipment. He also became
certified to do this type of work. The need
for his services grew, and he realized it was
time to relocate and continue growing.
“I wanted to stay in the city of Farming-
ton, because this is where the majority of my
work is,” he said. He found the Twin Peaks
location and met with the city to make sure
he could acquire the appropriate zoning to
operate.
Once everything was set to go, McKinney
ordered the new plant and began spreading
the word. He contacted the New Mexico
Recycling Coalition and learned there was
no other asphalt or concrete recycling facili-
ties in the state. The coalition’s website lists
all recycling entities in New Mexico, and,
according to those lists, Dirt Bandit Asphalt
will be the only facility of its kind in the
state.
Because the service is so rare, Waste Man-
agement made a deal with McKinney to
bring any concrete or asphalt from the land-
fill to Dirt Bandit so the material can be re-
cycled for future use. McKinney said he will
take all of the materials and recycle them
free of charge.
“This gives municipalities and contractors
an opportunity to save money” on both
dumping costs and purchase prices. It costs
$55 a truckload to dump asphalt and con-
crete. McKinney will take it for no cost.
He then will sell the recycled material,
such as “road base,” for a lower cost than re-
tail. “We sell it for half the price of natural
materials,” McKinney said. Municipalities
BASIN RESOURCES 25
SUMMER 2014 • www.basinresourcesusa.com
www.basinresourcesusa.com •SUMMER 2014
������������92".*%��/3425.&/4"4*0/����-&$42*$��02102"4*0/�*3�"�12*6"4&-907/&%�$0.1"/9�4)"4�)"3�#&&/�*/�01&2"4*0/�3*/$&�������
�52�$02102"4&�(2074)��%*6&23&�#53*/&33�-0$"4*0/3��"/%�*/%53429*/60-6&.&/4�"--07�'02�"%6"/$&.&/4�7*4)*/�052�02("/*:"4*0/�
%&1&/%*/(�0/�9052�,/07-&%(&��3,*--3��"#*-*4*&3��(0"-3�"/%�0#+&$4*6&3�
�92".*%��02102"4*0/�&.1-093�06&2�������1&01-&�*/�4)&� ����"/%��"/"%"��!*4)�0''*$&3�"$2033��0-02"%0���&8"3�� -#&24"���"3,"4$)&7"/���2*4*3)��0-5.#*"��"/%4)&��024)7&34��&22*402*&3�;��92".*%�*3�342"4&(*$"--9�1-"$&%�40�.&&4�4)&�&-&$42*$"-�"/%*/3425.&/4"4*0/�3&26*$&�/&&%3�0'�4)&�0*-��("3��15-1�1"1&2��.*/*/(��1&420�$)&.*$"-�700%�120%5$43�"/%�."/5'"$452*/(�*/%5342*&3����52�3&26*$&3�"2&�02("/*:&%�*/40�470
12*."29�#53*/&33�3&(.&/43�;��0/3425$4*0/�"/%� 2&"��"*/4&/"/$&��
�)003*/(�"�$"2&&2�7*4)��92".*%�1206*%&3�0110245/*4*&3�4)"4�$"/�$)"/(&�"/%�(207�"3�9052�$"2&&2�"/%�-*'&�0#+&$4*6&3�$)"/(&�"/%�(207�������������������� ��������������������������������������������������������������
�������������������������������� �� ������������������� ���������
����� ����������� ����������� ����������� ���������������� ���������� ���� �������������
��� ����������6 � /$$/�$,' ,"(,&�1/ (,(,&� ,#�#$3$*-.+$,1��(,"*2#(,&��,01/2+$,1 1(-,� ,#��*$"1/(" *��../$,1("$0'(.�./-&/ +0�� 0�01/2"12/$#�!5�������00-"( 1$#��2(*#$/0� ,#��-,1/ "1-/0��,"��
6 � (#�� " 1(-,� ,#�'-*(# 506 �$#(" *�!$,$%(10�(,"*2#(,&�./$0"/(.1(-,�&* 00$0� ,#�#$,1 *�(,02/ ,"$�%-/�1'$�./(+ /5�$+.*-5$$
6 ����.$,0(-,�.* ,������3$01$#6 �-" *�1/ ,0.-/1 1(-,�1-� ,#�%/-+�1'$�4-/)0(1$6 �-+.$1(1(3$�# (*5�.$/�#($+6 �*-1'(,&� **-4 ,"$�%-/�%($*#�$+.*-5$$06 �3$/1(+$6 �-,&�1$/+�$+.*-5+$,1�4(1'�-..-/12,(15�%-/�" /$$/�&/-41'
typically pay $14 a ton for “road base,” while the recycled product
will come ready to use at $9.50 a ton.
McKinney pointed out that asphalt should not be put into the
ground because it can seep. The agreement with Waste Management
will keep the product out of the landfill and allow for it to be recy-
cled. “We will sell the base to anyone with a product,” he said,
adding that the facility will not pollute the air or the environment.
“This is better than a crushing facility. We’re not digging. We’re
just recycling free material,” McKinney said. The product is LEED-
certified and municipalities and contractors can apply for LEED
points when using it. Because of the LEED certification, municipali-
ties even have an opportunity to apply for federal grants to help
cover the costs,.
For more information about Dirt Bandit Asphalt Services call
McKinney at 505.326.0111.
“The real bonus is the asphalt and concrete is engineered
and can be used anywhere. It will compact correctly.”
— Phil Mckinney
Dirt BAnDits AsPhAlt service
BASIN RESOURCES28
www.basinresourcesusa.com •SUMMER 2014
Debra Mayeux
Basin Resources
The association of Desk and Derrick
Clubs has a 65-year history in the petro-
leum and energy industry. It had a humble
beginning in 1949, when Inez awty Scha-
effer led an informal meeting of 73
women in New Orleans, La., to learn more
about the oil and gas industry. During the
meeting, the club was founded with a
commitment to provide a greater knowl-
edge of the industry and a wider associa-
tion among women working in the oil and
gas business.
Not long after the club’s foundation, a
group of 32 women chartered the Farm-
ington Desk and Derrick Club. It was June
28, 1957, when the organization began
within the San Juan basin.
Throughout the years the international
club “has maintained its status as a major
contributor of energy education through
informative programs, onsite field trips,
seminars, and workshops,” said Linda
Dean, a member of the Farmington club.
“Members have opportunities to enhance
their communication and leadership skills,
to expand their personal and business
horizons by networking with industry
leaders and colleagues, and to be educated
in the technology of our ever-changing en-
ergy industry.”
The Farmington club also established an
endowment through the San Juan College
Foundation to provide financial aid to stu-
dents pursuing an energy related degree.
The club also sponsors training seminars
for its members.
The Farmington club has continued to
work throughout the years, and even
began including men in the membership in
1987, when the association of Desk and
Derrick Clubs changed its bylaws to allow
for “equitable membership,” Dean said.
The local association also has a history
of being active both locally and on the na-
tional level, and this year has been no dif-
ferent with three local members serving in
leadership positions at the international,
regional and local levels.
Local club has leaders at international, regional and local levels
Desk and
Derrick
BASIN RESOURCES30
www.basinresourcesusa.com • SUMMER 2014
Linda Rodgers, the chief financial offi-
cer at Process Equipment and Service
Company was elected in 2014 to be the
president of the Association of Desk and
Derrick Clubs. In this role, Rodgers is re-
sponsible for the 57 clubs and a total of
2,500 members throughout the United
States and Canada. Her theme for the year
is “Energy Education, Tomorrow’s Prom-
ise.”
Rodgers joined the Farmington Desk
and Derrick Club in 2004, when she was
employed by A-Plus Well Service. Prior to
that, she worked in the banking industry
and was employed by First National Bank
of Farmington and Wells Fargo Bank. She
joined Process Equipment and Service
Company in 2012.
Rodgers joined Desk and Derrick, be-
cause she found herself working in the in-
dustry without a deep understanding of
how it worked. “I needed desperately to
find a source I could turn to for that
knowledge,” she said, adding that Desk
and Derrick accelerated that learning
process. It also gave her and other mem-
bers opportunities for experiences not reg-
ularly offered to people, such as visiting
offshore drilling sites and flying over the
Gulf of Mexico in a helicopter to see oper-
ations in the area.
She believes her participation in Desk
and Derrick has brought a different per-
spective to the club. “In many ways I’m
different,” she said. “We all work for the
oil and gas industry, but I bring a business
perspective.”
Rodgers added that the club has helped
her in many ways. “I’m learning about
how to be a better employee, better
speaker, better writer and better employer.
I’m getting as much out of it as I put into
it,” she said.
Other educational opportunities include
budgeting, conflict resolution and leader-
ship.
Leadership experience led her to obtain
the position of association president,
which was not the first national seat
Rodgers was appointed to hold. Nation-
ally, she has served as the Region V Direc-
tor, treasurer, secretary, vice president and
president-elect. Locally, she was treasurer,
president and parliamentarian.
“We promote education, and what
I want to do through the club is to
expand on that .”— Bea Saavedra
2014 preSident of the local
deSk and derrick cluB
BASIN RESOURCES32
www.basinresourcesusa.com • SUMMER 2014
Learn more about Encana’s operations in San Juan:
encana.com/sanjuan
Growing technology to responsibly grow assets.
Pioneering new technologies allows Encana to optimally grow its assets in the San Juan while minimizing disturbance to nearby communities.
e about Encana’n morLear
encana.com/sanjuan
ations in San Juan:s opere about Encana’
encana.com/sanjuan
She hopes as association president to
make this a “building year,” focused on
technology and other educational oppor-
tunities. “I love this organization. It’s an
honor to be a part of it,” Rodgers said.
Philana Thompson, the regulatory
compliance specialist at Merrion Oil and
Gas Corporation, began working in the
oil and gas industry 15 years ago. She
has been a member of the Farmington
Desk and Derrick Club for eight years.
This year, she was elected to serve as the
Region V Director with a theme of “Em-
brace the Past, Envision the Future.” She
will be responsible for 10 clubs with 200
members in West Texas, California and
New Mexico.
Thompson’s theme outlines her goals
as regional director. She wants to bring
together the seasoned members with the
younger members, so they can share their
experience and knowledge. She wants to
merge the knowledge from lifetime mem-
bers with the future members, who focus
more on technology and social network-
ing. This, she said could help the sea-
soned members learn how to use tools
such as Facebook and Twitter, where
they can see what is happening in the
industry in other parts of the country.
* Desk and Derrick 52
�!!��$)&� $#�& ( �� �'�����������,� ����� ����,������������
�����������������
����� ����������������������������������
�������������,- �������������������
***�'*�$#�& ( ')%%!+��$"������������ ������������
�� �������������
BASIN RESOURCES 35
SUMMER 2014 • www.basinresourcesusa.com
�������� ���������������������� ����������������
����������������������!�� ������!��������������!������ �������� � ����� ������������������!�� ��������������!������� ������ ����
�� �����������!�� ������� � �����!�� ����������������������������� ��������������� ������ � �����!������������ �����������������
������ ��������������!� ��� � ���� �������������
�/) *,+�$'�,# ��$ %�
����$*)(*,��(���� -*�'"(������������� ...��*(++!$* �%%���(&
Debra Mayeux
Basin Resources
The new 7,500-square-foot energy
wing at the Farmington Museum is open
and ready to be filled with exhibits. The
$2.5 million project was completed by
Mick rich Contractors and toured by mid-
dle school students from across the region
during energy Week.
The beautiful room was designed with
29-foot ceilings made from epicore and
painted dark blue. This allows items to be
hung from the ceiling, said roy Woods,
principal with Conron and Woods, the ar-
chitectural firm that designed the space.
The exhibit hall “is basically a big open
space that the staff will come and fill in,”
Woods said.
It will be filled with items that tell the
story of mining, production, geology, fossil
Museum’s new energy wing up and running
www.basinresourcesusa.com • SUMMER 2014
���� ����������������������������
������ ���������������
����� ���� ������� ����
������������������� �������
������������������
����������������� �������� ��� ���
The Energy
Wing will be
filled with items
that tell the story
of mining,
production,
geology, fossil
fuels, refining,
the basin’s
history and its
future with
renewable
energies.
�����������������������������������������!
�!�����������������
�����������
������ ����� � ���
����������������
������������������������
��������
����� ����,-")�"$'),�)%-
#*#�"$'),�)%- � !����������
���������������������������
///�"+(,-+*)&$*.+0'),.+")$%�$*(
fuels, refining, the basin’s history and its future with renewable
energies. There even are plans for an old-fashioned gas station.
Museum Director Bart Wilsey said the next step is to decide
how the public and the energy industry would like to see that
space used. There will be a series of meetings to get input from
the public and the industry. Those meetings will gauge what the
public knows and that will help museum staff to form an energy
exhibit plan.
“This space is like a giant jigsaw puzzle that we need to put to-
gether,” Wilsey said. “We need to raise some more money to do it,
and we need to get the energy folks excited about finishing this
project off.”
The San Juan Basin is one of the world’s largest producers of
oil, natural gas and coal. The exhibit will focus not only on those
fossil fuels that make this region rich, but also on the “current re-
search into alternative energies,” Wilsey said.
“It’s all a part of that picture, including conservation – insulat-
ing your house and buying fuel efficient cars,” Wilsey said. The
options for exhibits could be endless.
The project was funded by general obligation revenue bonds
approved in 2012 by the Farmington City Council.
BASIN RESOURCES38
www.basinresourcesusa.com •SUMMER 2014
����+) +#��/-$$/��� -*'+&/,+�4������
�������������4������� �������4���� ������ �������
������������4������������4�� ����� �����4�������������
�,-$�#0- !)$���$+1'-,+*$+/ ))3�%-'$+#)3
�����������������������������������
�� ���������������������
����� ������������������������ ##$-.��" /2 )(.��",+/ '+*$+/.��$/"�
BASIN RESOURCES40
www.basinresourcesusa.com •SUMMER 2014
Debra Mayeux
Basin Resources
The Obama administration has fol-
lowed through on a promise to increase
oversight and fees with regard to the de-
velopment of extractive industries on
public lands.
President barack Obama has stated he
will pump $1.1 billion into the bureau of
Land Management in Fiscal year 2015,
with much of those funds earmarked to
oversee oil and gas production and to
develop renewable energy resources on
public lands.
The president has requested $133.7
million be earmarked for the bLM’s Oil
and Gas Management program. This re-
quest includes both direct appropriations
and funding fees for service provided to
oil and gas producers on federal lands, ac-
cording to a press release from the bLM.
BLM 2015 budget plansPresident wants 133.7 million for BLM’s Oil and Gas Management plan
“This funding will help BLM fully
implement a risk-based inspection
strategy to improve production
accountability, safety, and
environmental protection of oil
and gas operations.”
— Press release
Bureau of Land Management Farmington Field Office
SUMMER 2014 • www.basinresourcesusa.com
The FY 2015 priorities include:
• BLM Foundation: The President's budget calls for the
authorization of a congressionally chartered non-profit BLM
Foundation that would provide the agency with new avenues
for working with the public on critical programs and land-
scapes. The BLM is the only major land management agency
without a congressionally chartered foundation in place to
support its efforts. A BLM Foundation could help bring addi-
tional resources to key initiatives such as the National Conser-
vation Lands, wild horses and burro management, restoration
projects, and many other areas.
• Inspection and Enforcement Fee: In support of re-
sponsible development and oversight of energy management,
the budget includes creation of a fee system to cover the
BLM's inspection and enforcement activities in the oil and gas
program. In 2010 Congress established a similar fee system to
support offshore oil and gas inspections. This program would
allow the BLM to improve production accountability and
serve areas with high or growing oil and gas production ef-
fectively.
• Fertility Control for Wild Horses and Burros: The
budget calls for an increase of $2.8 million for the Wild
Horse and Burro program that would allow the BLM to con-
tinue multi-year studies focused on the development of more
effective and longer-lasting fertility control agents and tech-
niques. It would also further the BLM's implementation of the
National Academy of Sciences recommendations made in
2013.
BASIN RESOURCES42
www.basinresourcesusa.com •SUMMER 2014
Tints & Detailing too2401 San Juan Blvd
Farmington326-6644
Like Us!
Get the Job Done RightMMaaxxiimmiizzee YYoouurr WWoorr kk
VVeehhiiccll ee.. .. .. WWee ccaann hhee llpp.. .. ..aanndd iinnssttaa ll ll ii tt !!
Get the Job Done Right
Some of these funds will go toward
staff and training, while other moneys
will be pumped into programs to
strengthen the BLM’s core oversight, leas-
ing and permitting capabilities, allowing
the BLM to keep up with industry de-
mand and workload. While vacancies in
offices in high oil and gas production
areas will be filled, the budget also will
help fund enhanced environmental analy-
ses and planning for future lease sales.
“the budget request also proposes to
expand and strengthen BLM’s inspection
and oversight capability through fees
comparable to those assessed for offshore
inspections. this funding will help BLM
fully implement a risk-based inspection
strategy to improve production accounta-
bility, safety, and environmental protec-
tion of oil and gas operations,” the release
stated.
this is all part of a plan to put into
place legislative reforms to “bolster and
backstop administrative actions being
• Generational Leap Forward in On-
line Data and Mapping: the BLM is
seeking to take a major step forward in de-
veloping and using a simple, easy-to-use on-
line interface where the public, industry, and
BLM's employees and partners can find criti-
cal information about the landscapes we
manage.
• Sage-Grouse Conservation: thebudget request maintains funding for the
BLM's Sage-Grouse initiative, which will
allow the BLM to take critical steps towards
long-term conservation of the West's sage-
brush ecosystems that are critical to Sage-
Grouse and other species. In Fiscal Year
2015, the BLM will complete a west-wide
planning effort focused on sage grouse that
has been undertaken in close partnership
with western states, the Fish and Wildlife
Service, the Forest Service and the natural
Resources Conservation Service.
Santa Fe – as part of President
Obama’s all-of-the-above strategy to
continue to expand safe and responsi-
ble domestic energy production, a Bu-
reau of Land Management, or BLM, oil
and gas lease auction today netted
more than $31 million in revenues
from the sale of 76 federal leases in
the states of new Mexico, Oklahoma,
texas, and Kansas.
BLM oil and gas leases are awarded
for a period of 10 years and for as long
thereafter as there is production in pay-
ing quantities. the revenue from the
sale of these federal leases, as well as
the 12.5 percent royalties collected
from the production of those leases, is
shared between the federal government
and the state of new Mexico. Of that
revenue, 52 percent generated goes to
States to share nearly
half of sale revenues BLM oil and gas lease sale
nets more than $31 million
SUMMER 2014 • www.basinresourcesusa.com
������#���������������������������%%""�������((!!����**!!&&%%
�� &&''������!!��##�������##��!!%%����!!##��!!��##�����&&++))**����&&++**������!!**�����$$����!!��**!!&&%%
��!!''��##!!%%�����&&%%))**((++��**!!&&%%����((** ���&&,,!!%%����������####..� ++$$''))�������,,..
����++##���� ��((����"" &&��������"" &&��������&&������((���� &&//��((�!##���!#�.����-%�(���(�)!��%*����������������������������(($$!!%%��**&&%%
������ ���� ��������������������!!!! ����������������""�����������������$$��!!##���--))!!��&&��((��!!%%))**&&(($$��%%��** �������
����
the federal government and 48 percent to the state where leas-
ing occurs. New Mexico will receive $13,844,227 on 22 fed-
eral leases totaling 6,947.19 acres from today’s sale, while
Oklahoma will receive $265,869.12 on 10 federal leases total-
ing 616.52 acres, Texas will receive $890,077.92 on 43 fed-
eral leases totaling 3,408.63 acres; and Kansas will receive
$8,640 on one federal lease totaling 120 acres.
Over the past 10 years, New Mexico has received $4.3 bil-
lion from energy production on BLM-managed federal leases,
all of which has been allocated directly to public education.
The Mineral Leasing Act of 1920 and the 1987 Federal On-
shore Oil and Gas Leasing Reform Act authorize leasing of fed-
eral oil and gas resources. The 1987 law requires each BLM
state office to conduct oil and gas lease sales on at least a quar-
terly basis. BLM lease sales are competitive and conducted by
oral bidding.
Beginning April 16, the BLM hosted its first geographical
Rotational Oil and Gas Lease Sale at the New Mexico state of-
fice, located at 301 Dinosaur Trail in Santa Fe, N.M. Parcels
will be offered for Oklahoma and Texas. For information about
upcoming lease sales, visit: www.blm.gov/nm/oilandgas
BASIN RESOURCES44
www.basinresourcesusa.com •SUMMER 2014
��������������� � �����������������������
��������������������������������������
taken to reform management of Interior’s
onshore and offshore oil and gas programs,
with a key focus on improving the return to
taxpayers from the sale of these Federal re-
sources and on improving transparency and
oversight.”
The proposed changes will be in three
categories:
• Encouraging diligent development of oil
and gas leases,
• Improving revenue collection processes,
and
• Advancing royalty reform.
These reforms are expected to generate
roughly $2.5 billion in revenue to the treas-
ury during the next 10 years, of which ap-
proximately $1.7 billion will result from
statutory changes.
This budget also will focus aggressively
on facilitating and supporting renewable en-
ergies on public land, as the Interior Depart-
ment works toward meeting President
Obama’s goal of approving 20,000
megawatts of renewables, such as solar, wind
and geothermal energy on public lands by
2020.
The BLM, since 2009, has approved 50
utility-scale renewable energy proposals and
associated transmission on public lands, in-
cluding 27 solar, 11 wind, and 12 geother-
mal projects. Together, the projects could
support more than 20,000 construction and
operations jobs and, if fully built, generate
nearly 14,000 megawatts of electricity, or
enough to power 4.8 million homes.
“This balanced and responsible proposal
will advance the BLM’s mission of multiple
use and sustained yield of the public lands at
a time of tight budgets,” said BLM Principal
Deputy Director Neil Kornze. “The BLM
continues to be a major economic engine for
many communities across the West and this
budget makes smart investments that provide
for a secure energy future, expanded out-
door recreational opportunities and thought-
ful resource management.”
Kornze noted that the BLM generates
an estimated $150 billion annually in eco-
nomic output for the nation and supports
more than 750,000 jobs through resource
development and conservation and recre-
ational activities on BLM-managed public
lands.
“The BLM continues to be a major
economic engine for many communities
across the West that this budget makes
smart investments that provide
for a secure energy future...”
— Neil KorNze
BlM PriNciPal DePuty Director
BASIN RESOURCES46
www.basinresourcesusa.com • SUMMER 2014
should energy independencebe america’s goal?
Paul J. GessinG
Rio Grande Foundation
energy independence has been a stated
policy goal of american presidents going
back to the arab Oil embargo of 1973.
surprisingly enough, particularly once one
considers that grandiose policy goals and
pronouncements that come from Washing-
ton including the War on Poverty, the War
on Drugs, or no Child left Behind,
america could soon be a net exporter of
energy.
as with so many good things that hap-
pen, this policy “success” has little to do
with Washington and a lot to do with hy-
draulic fracking and new technologies that
have unlocked vast reserves of energy.
nonetheless, as america approaches en-
ergy sufficiency, if not actual independ-
ence, it is worth discussing what these
terms mean and how their various mean-
ings could affect government policies and
the u.s. economy as a whole.
let’s take energy independence first. To
be truly “independent” implies not rely-
ing on foreign nations for any of our na-
tion’s energy resources. This is a highly
unrealistic and unwise policy goal for
many reasons. Obviously the term “inde-
pendent” sounds great and harkens all the
way back to the Founding, but that
doesn’t make it good energy policy for
many reasons:
1. america is not independent when it
comes to automobiles, bananas, or com-
puters, why is energy any different? Free
trade is beneficial in all other areas of the
economy. is there something about energy
that makes free trade a bad policy?
2. even if “energy independence” were
a viable goal, america relies on a variety
of energy sources that are not inter-
changeable. For example, nuclear-power
has not been applied to cars while oil is an
absolute necessity for most vehicles now
on the road, but there are vast differences
in the makeup and refining of some oils
that rely on international markets. This
energy specificity makes trade more neces-
sary as well as beneficial for all parties.
3. Traditionally, international trade in
natural gas has been limited by geography
while oil supplies have been consumed
domestically rather than being exported.
Would america benefit from exporting
some of those resources, or not?
4. What are the geopolitical implica-
tions of independence as opposed to inter-
dependence when it comes to energy?
i’ll address each of these issues in order.
Certainly energy is a unique resource. au-
thor and expert Robert Bradley calls it the
Master Resource. undoubtedly energy is
important. unlike cars, you can’t “make”
energy like you can cars and unlike ba-
nanas, there is no real short-term substi-
tute for a specific source of energy. Coal
can’t easily be substituted for oil and nu-
clear is not a substitute for natural gas.
However, by its definition, “free trade”
benefits both parties who choose to en-
gage in it.
in other words, nations that wish to ex-
port their energy are doing so because
those involved in the transaction believe
they benefit from it. To state the issue
more simply, man cannot live on energy
alone. nations that have large amounts of
exportable energy – saudi arabia,
Venezuela, and iran, for example – are
quite dependent on those exports as
sources of hard currency and a variety of
imported products.
Daniel Yergin, author of the seminal
book on the oil industry, The Prize, notes
that “a lasting lesson of the crisis years
(arab oil embargo) is the power of markets
and their ability to adjust to disruptions, if
government allows them to.” in other
words, the embargo which is often cited by
those who support “energy independence”
actually hurt the OPeC nations by causing
consumers to switch to more fuel-efficient
cars and pushing policymakers to open
To truly be
“independent” implies
not relying on foreign
nations for any of our
nation’s energy
resources.— Paul GessinG
executive director
rio Grande Foundation
BASIN RESOURCES 47
SUMMER 2014 • www.basinresourcesusa.com
and entrepreneurs to search for new sources
of oil including Alaska and the North Sea.
On point two, which relates to the non-
interchangeability of various energy
sources, the point is really quite simple, but
often lost on those who are economically
ignorant or motivated by politics. Marita
Noon of Energy Makes America Great re-
cently discussed the misguided understand-
ing of the Democratic Congressional
Campaign Committee, or DCCC, relating
to various resources and how they should
be used to make America more “energy in-
dependent.”
Among the DCCC’s recommended poli-
cies is the usual emphasis on “renewables.”
One can agree or disagree with government
“renewable” mandates, but it is hard to jus-
tify them as a means of enhancing Amer-
ica’s energy independence, because when it
comes to electricity production, America is
largely “independent” already. In other
words, one can advocate for or against
wind and solar or coal, nuclear, and natural
gas based on a whole range of preferences,
but justifying any of them based on energy
independence is just plain silly because all
of them are produced in America.
The U.S. does indeed rely heavily on oil
imports, but with the exception of ethanol
which Al Gore and most mainstream envi-
ronmental groups now oppose, the “renew-
able” fuel sources available for automobiles
are extremely limited.
Point three and the debate over what to
do with America’s newfound energy
bounty is perhaps the most important sin-
gle energy issue in terms of its overall eco-
nomic implications for the U.S. and New
Mexico economies. While some supporters
of energy independence are more comfort-
able with exporting energy than they are
with importing it, the discussion is heated
and it is going on right now.
Opponents of the Keystone XL Pipeline
routinely bash the project as “not support-
ing America’s energy independence” (or
even supporting China’s as Rep. Alan
Grayson has done), but Keystone is only
one battle in a war over America’s energy
bonanza.
Should the U.S. export natural gas in a
liquefied form, LNG? Natural gas in the
U.S. sells for less than $5 per MCF while in
Europe the price is double that and in Japan
the price is over $15 an MCF.
This disparity has led some economists
and energy experts (including the author)
to conclude that America could benefit
greatly from exporting LNG abroad. Un-
fortunately, federal policies currently in
place require approval from the White
House for costly export facilities and limit
the export markets for America’s LNG –
Japan, for example, is not an approved ex-
port destination.
Organized opposition to LNG exports
comes from environmental groups, such as
the Sierra Club which philosophically op-
pose fossil fuels, and some big businesses –
led by Dow Chemical – which enjoy hav-
ing a tremendous cost advantage over for-
eign companies for an important feedstock.
Notably, New Mexico is the seventh-
largest natural gas producing state and
would be a likely beneficiary of LNG ex-
ports. The Rio Grande Foundation
crunched the numbers based on other, na-
tional studies of LNG exports and expects
an initial 2,000 new jobs and $200 million
in additional economic activity in the state.
The United States has never exported
much oil, but due again to the production
boom driven by fracking and new technol-
ogy, the U.S. could become a significant
player by exporting in the international oil
markets. But, since the oil crisis of the
1970s, the U.S. has had a de facto ban on
overseas crude exports.
In reality, the issues surrounding oil ex-
ports are quite simple and involve classic
special interest politics. Companies that
The final issue relating
to interdependence vs.
independence when it
comes to energy is
geopolitical
considerations.
BASIN RESOURCES48
www.basinresourcesusa.com •SUMMER 2014
drill for oil – producers – generally favor
exports. Refiners do not. That’s because re-
fined crude products can already be ex-
ported. U.S. refiners are also currently
swimming in an abundant supply of low-
cost domestically produced crude. They
buy it from the drillers, refine it, and sell it
to consumers at a tidy profit. Why would
they want to mess with a good thing?
Again, New Mexico is a producing state,
so in this case our state would benefit from
free trade. In principle, free trade works for
all involved long-term – otherwise it
wouldn’t happen – so it makes sense that
on net the United States as a whole will
benefit from a reduction in barriers to trade
in oil and gas.
The final issue relating to interdepend-
ence vs. independence when it comes to
energy is geopolitical considerations. As-
suming that independence is possible,
America would arguably have fewer con-
cerns about what happens overseas, but
would have a smaller impact on foreign af-
fairs.
The current situation involving Russia’s
invasion of the Ukraine is a perfect exam-
ple. To the extent that the United States has
any leverage at all over the situation, it is
largely the result of America’s oil and gas
boom. While the United States is not par-
ticularly reliant on Russian energy, many
European nations are. Having the ability
and laws in place to export American en-
ergy – especially oil and gas – could reduce
Russian power while enhancing that of the
U.S.
Alternatively, while producing our own
energy is undoubtedly a good thing and
would benefit the overall economy, Ameri-
can refining is geared towards processing
heavy crude as opposed to the light-sweet
crude being produced from North Dakota
and other major shale plays. In other
words, free trade would be beneficial be-
cause both sources of fuel would seek their
logical target as opposed to American and
foreign refiners being artificially forced to
invest in costly new refining capacity.
To conclude, energy independence is
simply not a feasible or desirable policy
outcome. Rather, the free market driven by
investors, businesses, and consumers should
be free to drive efficiency in the oil and gas
markets absent the artificial, heavy hand of
government. The result will likely be a con-
tinuation of the boom in domestic energy
production which will in turn result in ad-
ditional tax revenues, more jobs, and
greater on-shoring of various energy-effi-
cient manufacturing in order to take advan-
tage of the new energy bounty.
In other words, taking care of a few mis-
guided federal policies could unleash an
American economic boom of untold propor-
tions. It’s time to free American energy!
BASIN RESOURCES50
www.basinresourcesusa.com •SUMMER 2014
Debra Mayeux
Basin Resources
Praxair, a Fortune 250 company, com-
pleted its new Kirtland-based gas plant in
January and announced its plans for the re-
gion during a Feb. 27 visit to the facility
by Gov. Susana Martinez.
“Praxair is pleased to be expanding op-
erations here in San Juan County, and sup-
porting many growth industries in the
state,” said Gerald Miller, vice president of
Praxair’s industrial gases business in the
Western united States. “New Mexico
clearly has demonstrated that it knows
how to support business growth and help
companies create jobs.”
The company’s new plant is expected to
generate 216 jobs during the next three
years. Those jobs include 139 direct jobs
in construction and capital equipment in-
dustries, 31 indirect jobs in supplier indus-
tries and 46 induced jobs based on the
indirect job creation, according to Thomas
Kevin Swift, the chief economic and man-
aging director of the american Chemistry
Council.
Gerald Miller, Vice President of Praxair
said, “I think New Mexico is a great place
to invest and grow. I was very sincere
Praxair exPandsGov. Susana Martinez visits Kirtland plant
SUMMER 2014 • www.basinresourcesusa.com
when I said that when I travel the 10 states I'm responsible for
none are better in terms of working with the business and envi-
ronment than this one right here.”
The plant will produce and supply local oil and gas producers
with liquid nitrogen for the development of natural resources.
Upon its completion, the plant’s capacity at the site increased to
300 tons per day of liquid nitrogen, in addition to gaseous ni-
trogen that is being supplied to local pipeline customers. The
gases Praxair produces are used for a wide variety of applica-
tions from welding to oil and natural gas production.
“We are proud that New Mexico’s business reforms have given
Praxair the confidence to produce their product here for local
use and to be exported,” New Mexico Economic Development
Department Secretary Jon Barela said. “Praxair’s investment
equates to a great business opportunity for them, quality posi-
tions for New Mexicans, and helps our energy industry grow,
which can lead to even more jobs down the road.”
Praxair, because of its expansion in San Juan County, will
qualify for incentives such as the state’s high-wage tax credit,
and state and local sales tax exemptions for machinery and
equipment, in addition to personal property tax exemption.
“Praxair is a growing Fortune 250 company that chose to ex-
pand its presence in New Mexico because of the state’s welcom-
ing business environment and increased demand for their
product,” Martinez said. “We welcome Praxair’s investment and
new jobs created through improving the state’s tax and regula-
tory climate.”
She will encourage everyone to step outside of their box and,
from each other, learn something new.
Being involved with Desk and Derrick has helped in both her
career and personal life. She has gained knowledge about the
industry by going to meetings and seminars, and on field trips.
“It is knowledge I use at my work, but there are aspects that
have helped me to grow personally and to make better decisions
when it comes to work – and family as well,” Thompson said.
Thompson has lived in Farmington for most of her life and
worked at Burlington Resources and ConocoPhillips prior to
joining Merrion Oil and Gas. Her duties with the Farmington
Desk and Derrick Club included serving as interim vice presi-
dent, vice president and president.
Bea Saavedra, administrative assistant to the San Juan Busi-
ness Unit Manager of ConocoPhillips, was elected to serve as
the 2014 president of the local Desk and Derrick Club. She
joined the club seven years ago and has served as secretary,
treasurer and club director. As president, she is responsible for
the local board of directors and for conducting monthly meet-
ings for the 32 members. Her theme is “Soaring to new heights
by sharing the power of knowledge.”
This theme points out what Saavedra hopes to accomplish as
president of the local club, and that is to expand on the knowl-
edge shared by Desk and Derrick members and bring that out
into the community.
“We promote education, and what I want to do through the
club, is to expand on that,” she said. “I want to take what we’ve
learned out into the community. We have so much knowledge
within our own members. We are one big network.”
The networking and sharing has helped Saavedra to grow as
an individual and to work on personal development. “It’s taught
me so much in the industry,” she said. “Every time I go to a
meeting, I learn so much. It’s been great.
Saavedra, originally from El Paso, Texas, has worked for
ConocoPhillips for nine years. Prior to that, she was a technical
analyst for the Drilling & Completions Group. She also worked
for Public Service of New Mexico under the gas services divi-
sion.
“These members represent three different facets of the energy
industry – a design manufacturing company and sales company
that supplies production equipment, family owned independent
oil and gas producing companies and major oil and gas compa-
nies,” Dean said. “This also shows that Desk and Derrick is open
to a variety of employers in the energy industry and, no matter
what background a member possesses, it allows us to learn from
each other in understanding how our jobs intertwine and that
we can get involved at various levels of leadership.”
Desk and Derrick Club membership is open to anyone ac-
tively employed in, affiliated with, or retired from the petro-
leum, energy and allied industries.
If you are interested in becoming a Desk and Derrick Club
member, call Bea Saavedra, 505.326.9713, for an application.
BASIN RESOURCES52
www.basinresourcesusa.com •SUMMER 2014
��������56���7��!0+(,&2-,�7�555�*!0&-2!,)�"-+�7����������
������ ����� ������ ��� �������������
�0-+��-1!��-!#�2-�2'$��-!*��(,$1��-30�$/3(.+$,2�'-*#1�3.�2-�2'$�+-12�1$4$0$�$,4(0-,+$,21�
7��03")��-3,2$#��/3(.+$,2��!,3%!"230(,&���$04("$�!,#��!0217��0!,$��,1.$"2(-,1�!,#��$.!(07��6#0!3*("�!,#��*$"20("!*��612$+17��0!,$�!,#��-#6��$+-3,21
�(*%($*#��-3&'�!,#��(&'2��$(&'2
������������������������������������
������������0�����������
�������
0�� *&/��(*'$'#��$!%-)+
0��"&$."*$"+
0��$'"��'
0� **/��-,
0� ,"*$'#
������������������� ��
Desk and Derrick continued from 32
��+" ,-���+-,� & �-$)(�$(-# ���)+( +,
�+�( 0)+%�2��.'*$("��($-� --$("���� *�$+
�/ +��� �+,�
�1* +$ (�
������ ,-���- "(���(��23�&))'!$ &������ ����2������� ��000������.,�2�000�*)0 +$(()/�-$)(,�( -
��))00 ++��(((())//��--$$))((,,�.'*$("��($-,���("$( ,��& ,�2���+-,
����� �� �)�$����!!�$ �"!" �����(��"# �!&��$")&���!�� *�����!��
�""���"$)�$��&"�%���!��+"'��&�&����"'$��"$!�$%���������%��"!��$�!����&"#��!��(�%�&�"'$��""&�������������
BASIN RESOURCES54
www.basinresourcesusa.com •SUMMER 2014
Debra Mayeux
Basin Resources
PTW energy Services Limited, a pri-
vately owned company based in Nisku,
alberta, Canada, will expand its services
in the San Juan basin with Pyramid Cor-
poration’s purchase of Tarpon energy
Services. It also aquired the Calgary,
Canada-based Warwick Industries, Ltd.,
and Kent Steel, Ltd.
This move combines four businesses to
create a “leading energy services provider
to a wide range of customers with opera-
tions in markets across key oil and gas
basins in the u.S., Canada, Southeast
asia and the Middle east,” said Don bas-
nett, president and CeO of PTW.
The transaction, finalized on april 16,
will make PTW one of the largest electri-
cal and instrumentation providers in
North america. PTW will have the capa-
bility to provide unparalleled service to
major clients in the oil sands and other
principal hydrocarbon areas, as well as
clients in the mining and industrial sec-
tors in North america and internation-
ally, basnett said.
“In addition, combining Pyramid, Tar-
pon, Warwick and Kent’s modular solu-
tions, structural fabrication and design
expertise will constitute a strong, full-ser-
vice building solutions offering,” basnett
said. “Supported by various investors, the
organization is well-financed and poised
to continue the high level of solid man-
agement with over 4,500 employees
throughout our worldwide network of
offices.”
In the San Juan basin, where Pyramid
opened an office in July 2013, this will
mean a greater opportunity for both
PTW and its clients with regard to the
range of services provided, said Kyle
Wolff, manager for Farmington area op-
erations.
“This merger will allow Pyramid’s
numbers to grow and pull from a larger
collective and will create a range of expe-
rienced and a different caliber of person-
nel reflected back to our clientele,” Wolff
said.
Prior to the merger, Pyramid and Tar-
pon were competing for the same con-
tracts. The merger will bring the
expertise of the two existing companies
together. “It will allow us to pull from
that work base,” Wolff said, adding PTW
will be like a one-stop-shop for the en-
ergy industry. “The customer can come to
us and ask us to build it. They will ask,
‘Can you give us everything under the
sun and the result is a turnkey product?’
The answer now is yes.”
The local operation currently has 54
employees, but through this merger Wolff
expects job growth opportunities. “We’re
still growing. It is something, where I
think this merger could allows us to
grow in a more seamless fashion with our
clientele,” Wolff said. “It allows us to
meet the needs of the larger clients – the
ConocoPhillips and bPs of the world. It
allows us to do global or national con-
tracts. as we see this merger start to
make this transition and see it become a
larger entity on its own, we will pick up
more jobs in the nation.”
Those job opportunities could be here
in the basin. “The outcome of this merger
is going to be positive in that nature,”
Wolff said.
PTW will retain its existing brand and
operate independently prior to any inte-
gration of operations. Pyramid has a his-
tory of providing service and product to
Pyramid purchases Tarpon EnergyMerger allows for expanded services in San Juan Basin
“It (the merger) allows us to meet the
needs of the larger clients — the
ConocoPhillips and BPs of the
world. It allows us to do global or
national contracts.”
— Kyle Wolff
Manager for farMington
area operations
BASIN RESOURCES 55
SUMMER 2014 • www.basinresourcesusa.com
industry within the U.S. and Western
Canada.
“Our firm offers a broad range of
services, including electrical-instrumen-
tation maintenance and construction and
control panel manufacturing,” Basnett
said. “We maintain a state-of-the-art fa-
cility which houses a fully certified
process equipment fabricator and com-
pression package manufacturer. Both
offer in-house product design and
strictly adhere to a comprehensive
QA/QC program.”
Pyramid also operated two instrumen-
tation repair and distribution companies.
Pyramid historically has supported a
network of offices, with each strategi-
cally located to offer “complete mainte-
nance, construction and material
procurement services to our clients in the
petroleum, petrotechnical, mining, wood
products, agricultural and industrial sec-
tors,” Basnett said.
Pyramid’s corporate committment has
been to be the electrical and instrumen-
tation industry leader, while adapting to
a changing technical environment. Its
objectives included safety, customer sat-
isfaction, employee education, corporate
strength and profitability, and being a
responsible member of the communities
in which it operates, according to the
company’s Website.
“We pride ourselves on providing high
performance coupled with the safest pos-
sible service to all our clients,” Basnett
said.
PTW will focus its operating manner
in a way to allow for a seamless transi-
tion for employees and customers once
the transaction closes in April. The clos-
ing will be based on third-party ap-
provals from the Canadian Competition
Bureau and the Tarpon shareholders.
Under the new umbrella corporation,
Basnett will remain as president and
CEO of PTW and Pyramid. Upon clos-
ing, Tarpon Energy Services, Ltd., will be
led by Rick Wickland, who is Tarpon’s
COO and one of the company’s original
founders. Randy Tooth will remain presi-
dent of Warwick Industries, Ltd., and
Jack Shorrock will remain president of
Kent Steel, Ltd. The full management
team will be announced after closing, but
all four companies will remain focused
on providing a high level of expertise
while servicing clients, Basnett said.
“We are very excited by this transac-
tion, as it is a win-win for all parties in-
volved,” Basnett said. “By bringing these
four companies under PTW, we are able
to leverage our collective successes and
be well positioned to offer continued
first-class service and to pursue future
growth opportunities. The foundation of
each company’s historical success has
been a result of the hard work and dedi-
cation of its employees.”
BASIN RESOURCES56
www.basinresourcesusa.com • SUMMER 2014
��������������������� ���������1���,��)($-)+,1���! -0��) ��)+%��))-,1��&)/ ,1��$+,-�$���$-,1�� �+$("��+)- �-$)(1���! -0�� ,-,
1�� ,*$+�-)+,1������&)-# ,��*��)����1��# +'$���))-,1���&$�+�-$)(,1��0 ��+)- �-$)(1���! -0��&�",��#$*,
1��$(�,)�%,1���+�#�-,1���&%�$(� +."���+ ($("1���! -0��+�!!$���)( ,1���&&��+)- �-)(1��.,-)'�'�� �,$"(,
���������-#��-��1���+'$("-)(�1�������������������������������������
DeBrA MAyeUx
Basin Resources
The U.S. Department of Agriculture re-
cently placed an emphasis on helping de-
velop sustainable energy and biofuel
opportunities for businesses in rural New
Mexico. This was done not only to help
companies save money, but also to assist in
economic development in rural areas, ac-
cording to Terry Bruner, state rural develop-
ment director for the department.
“When rural small businesses are looking
to save a dime or two, energy costs are a
great target” Bruner said. “Our annual report
shows that 78 small rural businesses took
part in the USDA’s rural energy for Amer-
ica grant program from 2009 to 2013 to
make energy efficiency upgrades to their
businesses.”
The $1.2 billion in grants has helped to
pay for the installation of solar panels on of-
fice buildings, the conversion of diesel to
electric water pumps on ranches and the de-
velopment of biofuel businesses within the
state.
One such business was rio Valley Biofu-
els, LLC, in Anthony, which received $2,613
in this round of funding from the advanced
biofuel program. The company is producing
more than 2,000 gallons of biodiesel a day
and the new funding will help the company
expand its production of biodiesel created
from used vegetable oil, according to a press
release from the USDA.
“The funding through this program will
help reduce dependence on foreign oil and
increase development of domestic renewable
energy,” Bruner said.
Under this program, payments are made
to eligible producers based on the amount
of advanced biofuels produced from renew-
able biomass other than corn kernel starch.
examples of eligible feedstocks include crop
residue, animal, food and yard waste, veg-
etable oil, animal fat and other things.
rio Valley Biofuels was just one of 195
producers, receiving $60 million under this
grant. “These payments represent the Obama
USDA invests in renewable energy, biofuels for rural New Mexico
* Biofuels 60
BASIN RESOURCES58
www.basinresourcesusa.com • SUMMER 2014
Dorothy Nobis
Basin Resources
there has been little time for hobbies and
vacations for Zachary Vann in the last two
and a half years.
in a position of safety management with
rosEN UsA, Vann does internal
pipeline/tank inspection services and offers
integrity solutions for the oil and gas indus-
try. he puts in long hours to provide for his
family, which includes his wife, Alexsha, and
two children, Zachary Adam Vann ii, 5, and
Jaxton, 1.
Vann also enjoys his work and is always
eager to expand his knowledge and to im-
prove his talents in the area of safety. he has
taken the time to become certified in accor-
dance with the occupational safety &
health Administration, or oshA, as well as
an internal auditor through bureau Veritas.
those certifications, good as they are, were
not enough, however.
Vann decided he needed to get his de-
gree, and the texas A&M Engineering Ex-
tension service, or tEEX, recommended he
take online classes through the san Juan
College school of Energy. tEEX is an inter-
nationally recognized leader in the delivery
of emergency response, homeland security
and workforce training.
Vann began his online classes in the fall
of 2012 and will graduate with an Associate
of Applied science in occupational safety
degree and an Associate of General studies
degree in May. he has a cumulative Grade
Point Average, or GPA, of 4.0, which put
him on the President’s List as well as having
the distinction of being named to the Phi
theta Kappa honor society, which recog-
nizes the academic achievement of two-year
college students.
the classes, that important degree, and
those distinctions didn’t come without sacri-
fice, however.
“in order to complete my degree, i had to
give up some of my relaxing time at home
and learning to play the guitar,” Vann said.
“i have also occasionally had to turn down
going out with friends or other events in
order to study.”
“the online program at san Juan College
allowed me to be able to complete a degree
in my field – occupational safety – while
still working full time and supporting my
family,” Vann added. “the program worked
for me because i was able to complete all of
the requirements on my time or while travel-
ing. Although obtaining a degree solely on-
line requires large amounts of dedication
and self-motivation, it allowed me to set a
foundation for my children to believe that
anything is possible as long as you put your
mind to it.”
the online classes were a good fit for
Vann, his family, and his career. Vann aver-
aged at least one and a half hours daily on
his classes, with additional time spent on
weekends. While he admitted he missed the
interaction with other students in the tradi-
tional classroom and the give and take of
School of Energy classes long distanceSJC online courses lead Vann to Associate in Occupational Safety degree
Zachary Vann
BASIN RESOURCES 59
SUMMER 2014 • www.basinresourcesusa.com
having an instructor on hand, the online
classes also allowed him to focus completely
on his studies.
Vann was not without his own support
system, however. “The staff at San Juan Col-
lege – especially (instructor) Dean Patscheck,
and Georgia Cortez at the School of Energy
– were major promoters of my success,”
Vann said. “Living in Houston, Texas, I can-
not visit San Juan College to obtain assis-
tance, but Dean and Georgia were very
supportive and made sure that I followed the
correct path toward obtaining my degree.”
For Georgia Cortez, working with and
guiding Vann through the online program
was more pleasure than work.
“My role with online students is to try
and make their transition into college as
seamless as possible and to be the voice for
them when they need assistance with all as-
pects of getting their certificates and de-
grees,” Cortez explained. “Zachary was an
excellent student who was motivated to
reach his educational goals while balancing
work and family life. His consistency and
hard work as an online student helped him
to reach his Associate of Applied Science, or
AAS, degree in Occupational Safety in a
short time frame. His success is mirrored
with other colleges because he was a transfer
student from Houston Community College
and a graduate of the Texas A&M Engineer-
ing Extension Service, with which San Juan
College has an agreement to transfer in its
Certified Safety & Health Official for col-
lege credit hours.”
Randy Pacheco, the Dean of the School
of Energy, offered his congratulations to
Vann. “I’m proud that the San Juan College
School of Energy is able to serve the stu-
dents outside of San Juan County and New
Mexico and obtain their degree from our in-
stitution and help them excel in their career,”
he said. “I’m proud of Zachary and wish
him well.”
Vann and his family plan to attend San
Juan College graduation ceremonies on May
10. While the trip will be short and cover
many miles, Vann is excited to be able to
participate and wear that cap and gown.
“It’s a rite of passage for me,” Vann said of
the ceremony. “I’ve worked really hard to get
to this point. I didn’t go to college right out
of high school, and I want to experience
that (graduation).”
His completion of his studies and his dili-
gence in getting his degree did not come as
a surprise to many. There is one, however,
who didn’t know about his accomplishment
until the invitation to graduation arrived in
the mail.
“I sent my mom an invitation and (when
she called), she started to cry,” Vann said.
“She’s very proud of me and is making the
trip from Washington to be at graduation.”
Georgia Cortez is also excited to have
Vann come to Farmington for graduation.
“It’s not often that I get to meet an online
student, and I’m very honored that Zachary
BASIN RESOURCES60
www.basinresourcesusa.com •SUMMER 2014
�&#"�&/��"00".�&+�0%"��1& (���+"5��, �0"!��0��&"*/��,.!� ,.+"./�4������/0���&+��0.""0�4���.*&+$0,+��������� ������������
�"6))�*""0�,.��"�0�3,1.��"/0�-.& ",+�*�',.��.�+!�0&."/�2"�/"))���
�����������������������+��))����+�*"��.�+!0&."/�2"�/"))�
�������� #.,*�����0,��&!+&$%0��,+��.&����0���
Biofuels continued from 56
Administration’s commitment to sup-
port an ‘all-of-the-above’ energy strat-
egy and to help create jobs,”
Agriculture Deputy Under Secretary
Doug O’Brien said. “Producing ad-
vanced biofuels is a major component
of the effort to take control of Amer-
ica’s energy future by developing do-
mestic, renewable energy sources.”
Through this program and others at
USDA, the department is working to
support the research, investment and in-
frastructure necessary to build a robust
and lasting biofuels industry that cre-
ates jobs and broadens the range of
feedstocks used to produce renewable
fuel. More than 300 producers in 47
states have received $279 million in
payments since the program’s inception,
according to the USDA.
The program has supported the pro-
duction of more than four billion gal-
lons of advanced biofuel and the equiv-
alent of more than 40 billion kilowatt
hours of electric energy.
Bruner added that biofuel produc-
tion places a “strong focus on domestic
energy opportunities” in the state.
“It means continuing our historic
role in promoting the value chain
around agricultureal products – espe-
cially those traditional New Mexico
products that are a source of pride for
our state,” Bruner said. “It means part-
nering with rural community to im-
prove essential infrastructure
improvements in water, sewer, telecom-
munications, electric service and hous-
ing. It means seeing past traditional
boundaries to harness the strength of
multiple rural communities to create
stronger regional economies.”
will be present with his family at graduation cere-
monies,” she said. “All I can say is ‘Job well done,
Zachary!’”
Vann will continue his education at Eastern Ken-
tucky University, which also offers online classes. “I
only hope its online classes are half as good as San
Juan College School of Energy’s,” he added.
Vann recommends online classes for those who are
self-motivated, focused and have the determination to
put the time and effort into getting their degree.
“It was worth it to me, not only because of the de-
gree, but to show my kids anything is possible,” he
said.
A motivated employee, an exceptional student and a
dedicated family man, Zachary Vann will have – for a
few months at least – time for concerts, movies, camp-
ing and that all-important family time. His determina-
tion to continue his education will remain a priority,
partly because he has his own role model to emulate.
“My wife graduated with her bachelor’s in May of
last year,” he said proudly. “And she did that while she
was pregnant!”
E N E R G Y N E W S. . . . . . . . . . . . . . . . . . . . . . . . . .
Across the Nation
BASIN RESOURCES 61
SUMMER 2014 • www.basinresourcesusa.com
Financial problems of operators in U.S.
shale gas and tight oil plays might hold pro-
duction growth below current expectations,
according to the author of a March com-
ment published by the Oxford Institute for
Energy Studies (OIES).
But a reorientation of the industry toward
“the most commercially sustainable areas” of
unconventional-resource plays might extend
the period of growth, writes the analyst,
Ivan Sandrea, an OIES research associate
and senior partner of Ernst & Young Lon-
don.
The producing industry has demonstrated
it can create opportunities, innovate opera-
tionally, and address environmental issues
despite evolving government policies and
questions of public acceptance, Sandrea
writes.
“What is not clear from higher-level com-
pany data is if the industry (both large play-
ers and independents) can run a cash
flow-positive business in both top-quality
and in more marginal plays and whether the
positive cash flow could be maintained
when the industry scales up its operations.”
Sandrea cites asset write-downs approach-
ing $35 billion since the shale boom began
among 15 of the main operators.
“While most of the companies that have
made write-downs are not quitting, many
players in this industry have already noted
that the revolution is not as technically and
financially attractive as they expected,” the
analyst writes. “However, to deem the (busi-
ness) model flawed due to the investment
write-downs of some large companies would
be misleading and too early in the evolution
of the business for some players.”
SuStainability concernS
According to the Energy Aspects analysis,
total capital expenditure nearly matches total
revenue every year, and net cash flow is be-
coming negative as debt rises. Other finan-
cial indicators “add to concerns about the
sustainability of the business,” Sandrea says.
Still, shale-gas and tight-oil development
remains “a fledgling industry” with hope for
“a positive inflection point for cash flow and
a full-cycle risk-adjusted return.” Some oper-
ators see that point as still five years away.
Meanwhile, the industry will remain chal-
lenged.
Sandrea says “above-ground reasons” in-
clude the need to constantly acquire and
drill leases, infrastructure needs, transporta-
tion costs, increasing costs to manage envi-
ronmental considerations as operations grow,
and “the fact that drilling and hydraulic frac-
turing costs respond to fluctuations in gas
and oil prices as well as demand, leaving lit-
tle excess profit for long.”
Below ground, he says, rapid production
declines and low recovery rates, despite
Financial questions seen
for U.S. shale gas, tight-oil plays
www.basinresourcesusa.com •SUMMER 2014
������ ����� ��������� ��������������� ���
����� ����&'$#�!�,����$&%$&�(���%%�&�!�� $!���%%�&�!�
�#������''$&��'
������������������$���!��-.��&"�#�($#����
��('���)�'����#'��$)'�#�'�$�
%&$"$(�$#�!��(�"'�
�' ���$)(�$)&��)�&(�&!+�'%����!'�
�����)&���$*&$$"
�����#�%)(�+$)&�!$�$$#��!"$'(��#+(��#��
technical improvements, remain problems in many plays and might
worsen as operators move into increasingly challenging acreage.
More likely, he says, “Parts of the industry will have to restructure
and focus more rapidly on the most commercially sustainable areas
of the plays, perhaps about 40 percent of the current acreage and
resource estimates, possibly yielding a lower production growth in
the uS than is currently expected—but perhaps a more lasting one.”
– Oil and Gas Journal
DEbra MayEux
Basin Resources
Waste Management has been named the World’s Most Ethical
Company for 2014 by the Ethisphere Institute, an independent
center of research promoting best practices in corporate ethics
and governance.
This is the seventh time that Waste Management has been
honored with this award, which recognizes organizations that
continue to raise the bar on ethical leadership and corporate be-
havior, according to a press release from Waste Management. It
was only one of two companies to receive the honor.
“Waste Management is proud of this designation, which rec-
ognizes our company’s efforts in transforming the waste indus-
try to focus on environmental
solutions,” said Scott badley, vice
president of Waste Management in
the Four Corners area. “We are proud
of our employees who help strengthen our reputation as an in-
dustry leader.”
Waste Management CEO David Steiner agreed saying the
“recognition reflects our most fundamental commitment to
keeping the environment – and our people and our neighbors –
safe,” said David Steiner, chief executive officer and president of
Waste Management. “as an industry leader, we continue to de-
velop strategies to extract value from the waste stream to mini-
mize our environmental impact, while at the same time
demonstrating a culture where safety and ethics are core be-
liefs.”
The World’s Most Ethical Company assessment is based upon
the Ethisphere Institute’s Ethics Quotient framework, which
Waste Management
Named World’s Most Ethical
Company for 2014
* Waste Management 65
BASIN RESOURCES 63
SUMMER 2014 • www.basinresourcesusa.com
������������,�***�' )#�(��*�+�$&�
��#��)�#��#�(�����+� ##$)#��'�(���������"%���#�����&
��&&����#���#�&�!���#���&
�$#$�$���!!�%'���#��)�#��)'�#�''��#�(
WASHINGTON, D.C. – As part of
President Obama’s recently released Strat-
egy to Cut Methane Emissions, a compo-
nent of the Climate Action Plan, the
Bureau of Land Management (BLM) today
announced that it is seeking public com-
ment on a possible rulemaking that could
reduce the waste of methane from mining
operations on public lands. Reducing
methane emissions is a powerful way to
take action on climate change.
"We welcome public input on ways in
which we can both increase mine safety
and improve the health of our environ-
ment,” said BLM Director Neil Kornze.
“We will work with federal, state and local
officials as well as with industry and non-
governmental organizations to explore
ways to responsibly reduce methane emis-
sions.”
The BLM published in the Federal Reg-
ister an Advance Notice of Proposed Rule-
making (ANPR) to solicit comments on
establishing a program that would allow
the capture, use, sale, or destruction of
waste mine methane from Federal coal
leases and, Federal leases for other solid
minerals.
Methane that is released as a direct re-
sult of mining operations is known as
waste mine methane. The authority for the
BLM to address the capture, use, or de-
struction of waste mine methane across
700 million acres of Federal mineral estate
comes from the Mineral Leasing Act.
When released into the mining environ-
ment, waste mine methane can pose a sig-
nificant safety threat for underground
miners in operations where the methane
may concentrate in underground workings
to explosive levels.
In his Climate Action Plan, President
Obama directed the Administration to de-
velop a comprehensive, interagency strat-
egy to cut methane emissions. In March,
the White House released a Strategy to
Cut Methane Emissions that builds on
progress to date and takes steps to further
cut methane emissions from landfills, coal
mining, and agriculture, and oil and gas
systems through cost-effective voluntary
BLM to examine steps to reduce methane
from mining operations on public lands
���������������������� �������
$!&&����������������'+��������������'����) �����'��� ������ �������*����������+����������(���������(�������������������
#"%)&!!!
��������������������*������ ���������+ ������������������������+ ��������������+ ���������������
����������������������������������������������
�� ����������������
� &�$�!��� ��"$!�'�&�$��'��%���� &� � ���
���*�����"$��� ���!'���%�(��!(�$������!(�$� �)�"$!�'�&�
����� �&������� ���� �����%�)�&�����!��&�! ���&�$����
���*������! �$�&��� ���%"���&�"$!�'�&�#'������%��!$�� �� ��$�%"�������&�! %�
�� �������������� �������� ����
���������� �������� ���������������� ������� ������������
�!�����%���� �)��'���� ����%�����!' ��&�! %����!��)�*%�����������&�%����� ���!' ��&�! %����$�(�)�*%����!' &*��!��%
Partners Assisted Living Services
CompanionshipHome cooked mealsLight housekeepingErrands/Transportation
- Grocery Shopping- Doctor Appointments- Hair Appointments & more
Philips Lifeline Medical Alert Service
Philips Medication Dispensing Service
2-24 hour CareLive-in ServiceRespite Care or Family ReliefDementia/Alzheimers CareIndividualized CarePersonal Care
- Toileting- Bathing- Transferring
End of Life Care
313 N. Locke Ave. • Farmington • www.partnersassistedliving.com������ �� ���� ����������������
IINN--HHOOMMEE SSOOLLUUTTIIOONNSS FFOORR SSEENNIIOORRSS AANNDD FFAAMMIILLIIEESS
PPAALLSS 505-325-9600 ����� ���������������������� ��������������
Missing work to care for your loved one?
PALS can help!Injured on the job?
��� ���������������
actions and common-sense stan-
dards. By publishing the ANPR,
the BLM is addressing one of the
opportunities to reduce domestic
methane emissions identified in the
strategy. Learn more about the
Strategy at www.whitehouse.gov/
the-press-office/2014/03/28/
fact-sheet-climate-action-plan-strat-
egy-cut-methane-emissions.
Taking action to curb methane
waste and pollution is important
because emissions of methane make
up nearly 9 percent of all the
greenhouse gas emitted as a result
of human activity in the United
States.
Since 1990, methane pollution
in the United States has decreased
by 11 percent, even as activities
that can produce methane have in-
creased. However, methane pollu-
tion is projected to increase to a
level equivalent to over 620 million
tons of carbon dioxide pollution in
2030 absent additional action to
reduce emissions.
Methane can be removed from
coal and other underground mines
using several methods: draining
methane from the mineral deposit
before or during mining operations;
draining gas from closed or mined
out areas; or using fans to dilute
and ventilate methane from mine
areas.
The ANPR asks for comment
on technologies for the capture,
use, sale or destruction of waste
mine methane. The ANPR also
seeks comment on the economics
of reducing mine waste emissions.
The 60-day comment period
closes June 30, 2014.
was developed to provide a means to assess an orga-
nization’s performance in an objective, consistent
and standardized way. The information collected
provides a comprehensive sampling of definitive cri-
teria or core competencies, rather than all aspects of
corporate governance, risk, sustainability, compliance
and ethics.
“The entire community of the World’s Most Ethi-
cal Companies believe that customers, employees, in-
vestors and regulators place a high premium on
trust, and that ethics and good governance are key in
earning it,” said Timothy Erlich, CEO for Ethi-
sphere. “Waste Management joins an exclusive com-
munity committed to driving performance through
leading business practices. We congratulate everyone
at Waste Management for this extraordinary achieve-
ment.”
Waste Management, based in Houston, Texas, is a
leading provider of comprehensive waste manage-
ment services throughout North America.
Waste Management continued from 62
BASIN RESOURCES 65
SUMMER 2014 • www.basinresourcesusa.com
BasiN resoUrces66
www.basinresourcesusa.com •sUMMer 2014
advertisers directoryAllstate ......................................................26Viviana Aguirre900 Sullivan Ave., 505-327-4888B J Brown3030 E Main St., Ste X9, 505-324-0480Kelly J. Berhost1415 W. Aztec Blvd, Ste. 9, Aztec, NM505-334-6177Harold Chacon8205 Spain Rd. NE, Suite 209 CAlbuquerque, NM505-296-2752Dennis McDaniel, 505-328-0486Matt Lamoreux4100 E. Main St., 505-599-9047Johnnie Pete817 W. Broadway, Ste. B, 505-325-0297Silvia Ramos2400 E. 30th St., 505-327-9667
Animas Environmental Services.....................9Farmington, NM505-564-2281Durango, CO970-403-3084www.animasenvironmental.com
Animas Valley Insurance ...............................72890 Pinon Frontage Rd.Farmington, NM505-327-4441www.aviagency.com
Antelope Sales & Service Inc.......................495637 US Hwy 64Farmington, NM505-327-0918www.NMASSI.com
Armstrong Coury Insurance.........................37424 E. MainFarmington, NM505-327-5077www.armstrongcouryinsurance.com
Bailey’s Welding.........................................436175 Hwy 64Bloomfield, NM505-632-3739
Big Red Tool, Inc. .......................................172010 San Juan Blvd.Farmington, NM505-325-5045
Brady Trucking, Inc.....................................685130 S. 5400 EVernal, UT 84078435-781-1569Farmington, NM Division505-598-5580Grand Junction, CO Division970-263-8791Williston, ND Division701-572-1522
Calder Services ..........................................48#7 RD 5859Farmington, NM505-325-8771
Cascade Bottled Water & Coffee Service ................................25 & 38214 S. FairviewFarmington, NM505-325-1859 • 800-416-1859
City of Farmington .....................................271300 W. Navajo St.Farmington, NM 505-599-1395www.IflyFarmington.com
Corrpro......................................................513900 Monroe Rd. Farmington, NM 505-325-1946www.corrpro.com
Crossfire, LLC .............................................35PO Box 339Ignacio, CO970-884-4869www.crossfire-llc.com
Dir t Bandits................................................64101 E. PinonFarmington, NM505-326-0111www.dirt-bandit.com
Edward Jones/Dennis Gross ........................242713 E. 20thFarmington, NM505-325-5938www.edwardjones.com
Elite Promotional & Embroidery ..................621013 SchofieldFarmington, NM505-326-1710
Encana.......................................................32www.encana.com/sanjuan
Energy Pump & Supply ...............................432010 Troy King Rd.Farmington, NM 505-564-2874
Farmington Fire Equipment ........................256007 E. MainFarmington, NM505-327-1933www.f-fire.com
Four Corners Community Bank ....................47505-327-3222 New Mexico970-565-2779 Coloradowww.TheBankForMe.com
Four Corners Oil & Gas Conference..............37505-325-0279505-258-1748www.fourcornersoilandgas.com
Foutz Hanon ..............................................422401 San Juan Blvd.Farmington, NM505-326-6644
Global Communication Solutions..................30505-325-60981-888-456-2238service@globalcommunicationssolutions.net
Halliburton.................................................20www.halliburton.com
Hands on Safety Service.............................561901 E. 20th St.Farmington, NM505-325-4218
Henry Production .......................................213440 Morningstar Dr.Farmington, NM505-327-0422
Highlands University ..................................41505-454-3004nmhu.edu/energy
IEI Industrial Ecosystems ............................5949 CR 3150Aztec, NM505-632-1782www.industrialecosystems.com
Inland Kenworth .........................................443924 Bloomfield Hwy.Farmington, NM505-327-0200www.inland-groups.comwww.kenworth.com
Kelco, Inc. ..................................................45515 E. Animas St.Farmington, NM505-325-6372
Kozi Homes..................................................5505-327-9008
Largo Tank.................................................52505-327-6281www.largotank.com
Mechanical Solutions, Inc..............................21910 Rustic PlaceFarmington, NM505-327-1132
Mesa West Directional.................................58505-402-8944www.mesawestdirectional.com
Metal Depot ...............................................552001 San Juan Blvd.Farmington, NM505-564-8077www.metaldepots.com
Miller & Sons Trucking ................................531110 W. Sategna Ln.Bloomfield NM 87413505-632-8041www.powerinnovations.com
New Image Powder Coating.........................382792 Inland StreetFarmington, NM505-326-2797
Odessa Pumps ...........................................31940 Hwy 516Flora Vista, NM505-334-1330
Oil & Gas Equipment Corp. ..........................148 CR 350Flora Vista, NM505-333-2300www.ogequip.com
Parkers Office Products ..............................39Farmington, NM505-325-8852www.parkersinc.com
Partners Assisted Living .............................65313 N. Locke Ave.Farmington, NM505-325-9600www.partnersassistedliving.com
Patriot Technologies.....................................33920 Monroe Road, Suite AFarmington, NM505-325-4747
Premier NDT Services .................................23505-325-1407www.premierndt.com
Pumps and Service.....................................21505-327-6128www.pumpsandservice.com
Pyramid .....................................................261-866-955-HIRE
QuickLane Tire & Auto Center......................605700 East Main St.Farmington, NM505-566-4729
Reliance Medical Group...............................193751 N. Butler Ave.Farmington, NM505-324-1255 Occupation Medicine505-324-1255 Urgent Care1409 Aztec Blvd.Aztec, NM505-334-1772www.reliancemedicalgroup.com
Rush Truck Centers of New Mexico......13 & 576521 Hanover Road N.W.Albuquerque, NM 87121505-875-3410www.rushtruckcenters.com
San Juan Casing Service..............................366101 E. Main St.Farmington, NM505-325-5835
San Juan College School of Energy..............18800 S. HuttonFarmington, NM505-327-5705www.sanjuancollege.edu
San Juan United Way...................................63505-326-1195www.sjunitedway.org
Serious Texas BBQ......................................283475 E. Main St.Farmington, NM505-327-9889506 Broadway Blvd.505-333.6227www.serioustexasbbq.com
Southwest Concrete Supply.........................332420 E. MainFarmington, NM505-325-2333www.southwestconcretesupply.com
The Spare Rib ............................................521700 E. MainFarmington, NM505-325-4800www.spareribbbq.com
Twin Stars, LTD...........................................67100 Iowa Ave.Bloomfield, NM505-632-92027169 Roswell Hwy.575-746-6690
Sunray Casino ............................................48Farmington, NM505-566-1200
TJs Diner ....................................................15119 E. Main St.Farmington, NM
Treadworks ................................................314227 E. Main St.Farmington, NM505-327-02864215 Hwy. 64 Kirtland, NM505-598-1055www.treadworks.com
Uncle Bob’s Auto & Truck ...........................203995 Cliffside Dr.Farmington, NM505-436-2994
U.S. New Mexico Federal Credit Union..........153024 E. Main St.Farmington, NM505-599-3610usnmfcu.org
Ziems Ford Corners ....................................185700 East MainFarmington, NM505-325-8826
�����*/#� .%������������� �����*,/%''��/0����������� !����������
///�-/&),-#+,�$*(����������� �����
����� ��������� ����� ������2*-�'� (�0"/3& &+$����1"/�1/�+0#"/�-2*-0��+!�"+$&+"0���6!/�2)& �-2*-0��+!�"+$&+"0�� ,*-/"00,/��+!�"+$&+"�*�&+1"+�+ "
��"������������"1%,!0�02 %��0�,&)��+�)60&0��#�&)2/"��+�)60&0��+!�,2/� ,*-/"%"+0&3"�-/"3"+1�1&3"�*�&+1"+�+ "�-/,$/�*�-21�20���01"-��%"�!�,#� ,*-"1&1,/0�&+�1%"�&+!201/6�
�� ����������������� ����� ���"�����������4&+��1�/0�-"/0,++")��/"�"5-"/&"+ "!�*�&+1"+�+ "�1" %+& &�+0� �-��)"�,#�+,1�,+)6�*�&+1�&+&+$�6,2/�#&")!�".2&-*"+1���21��)0,�-"/#,/*&+$�*�+6�*�',/�/"-�&/0���2/�3"%& )"0��/"�#2))6�".2&--"!�4&1%� /�+"0��1,,)0��-�/10��+!�-/"002/"�4�0%"/0�1,�-"/#,/*�*�+6�/"-�&/0�,+�0&1"�
� ���� ���� ����"�)"/�#,/�� 2**&+0���12/�)���0��+$&+"���/10�� 2**&+0��&)1"/0��+!��5%�201� ,*-,+"+10�&01/&�21,/�#,/����/!+"/��"+3"/��� ,*-/"00,/0����/10�
�+!��"-�&/� "+1"/���"�,&��� ,*-/"00,/0����/10��+!�
�"-�&/� "+1"/�� /,4���+2#� 12/&+$����&)��&")!��+$&+"���/10���,00��+!201/&"0��� ,*-/"00,/0�����/10���*0,&)����6+1%"1& ��)2&!0���2+!/���,)21&,+0��1!�����������2/"��1/,("�
�+1"))&$"+1����601"*0��/10��+!��2--)&"0���,01�-�/10�&+�01, (���")10��%,0"0��$,3"/+,/0��$�0("10��+!�*,/"���3"/�1%"� ,2+1"/�0�)"0
������������*&00&,+� ,*-)&�+ "�2-#&10��� ����+!��"01,��+�)67"/0�21&)&7"!�
#,/�-/,-"/�"*&00&,+0�12+&+$
� ���"���"*�"/�,#����"14,/)!��+!�����
���� ������� �����
� �����������" ����� �������������
�""��0��+0&!"�1��,,1%�����+!�,210&!"��1�,,1%����