Focus on Industry 2013

industry 2013

Rangeland Energy’s New Home A Note from Jon Barela Cleaning Our Air The Potash Industry Joining the Nuclear Family How to Grow Pecans & More!

The Business of Growth

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industry 2013

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Focus oN oil & gas

Rangeland energy adding new home

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Focus on the economy

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focus on technology

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Focus on potash

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AGR I CULTUR E & INDUSTRY ARE THE HEART OF OUR COMMUNITY!

From the Editor

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new mexico’s rural economy

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airborne identity

Sometimes an area just deserves a second look making opportunities focus on potash

The right solution focus on wipp

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using wipp as a science lab focus on nuclear energy

international isotopes eager to join nuclear family

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focus on agriculture

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focus on the railroad

from the orchard to the table

all the livelong day

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A bo u t t he co v e r

Southeastern New Mexico has an extremely diverse industrial and agricultural economy - and it is firing on all cylinders!

Kyle Marksteiner, Editorial Director - Lilly Anaya, Advertising Photography by Kyle Marksteiner - along with submitted photos Special Contributors: Jon Barela & Staci Guy F oc u s o n i n d u s t r y ( s pec i a l e d i t i o n ) i s p u b l i s he d b y A d Ve n t u r e M a r k e t i n g

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F oc u s from the editor

The Business of Growth Gross receipts and lodger’s tax numbers are through the roof.

Hot dog stands and smoothie shacks are setting up along the highway. Hotels are occupied.

Roads are congested. Southeast New Mexico is booming. Last year, Focus put out an oil and gas edition that walked you through the mechanics of the oil and gas boom. We talked about horizontal drilling, Bone Springs, mud logging and refining.

Kyle Marksteiner Editorial Director

Focus on industry

It’s still going strong, and the nation is starting to take notice. A local newspaper’s feature on oil and gas wives hit the national Associated Press wire. Carlsbad hosted two conferences on the oil and gas industry over the summer. The June conference, “The Role of Southeastern New Mexico in the Global Economy,” was sponsored by the Federal Reserve Bank of Dallas, and a mirror event was held in Hobbs. Mayor Dale Janway hosted the second Carlsbad summit in August, which included several industry representatives and a presentation by city and county planners. Hundreds of residents from Artesia, Carlsbad, Lovington and Hobbs attended the events.

At local economic development agency meetings, businessmen and women are pitching for loosening of city zoning regulations so they can build more quickly and affordably. Others aren’t so sure, as some believe the area’s longterm attraction (i.e., getting wives and kids to move to town) may benefit more from carefully planned residential neighborhoods and businesses. It’s a good debate to be able to have.

An influx of fracking crews and water hauling contractors passing through the area has become part of the routine for most people, but there are also more tangible additions. At least two companies plan on building new transloading hubs in the area to service the oil and gas industry, and each will bring dozens of jobs. Last winter, the HollyFrontier Corp. brought in 1,000 workers to conduct a maintenance turnaround at its Navajo refinery in Artesia.

It’s not just the oil and gas industry, either.

Eddy County’s two potash legacies, Mosaic and Intrepid, are both running strong and have recently expanded their

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facilities. In Lea County to the east, Intercontinental Potash Corporation is setting up to add several hundred more jobs. It’s kind of interesting to live in a time when a potash mine is in development in Lea County while a surge in oil drilling is taking place in southern Eddy County.

Even the nuclear industry, internationally sluggish since the Fukushima incident, is doing OK in Southeastern New Mexico, thanks to the National Enrichment Facility near Eunice and its planned sister addition of International Isotopes.

Dr. Jim Peach, with the Department of Economics and International Business and the Arrowhead Center at New Mexico State University, presented at the two summer conferences in Carlsbad and the one in Hobbs. The statistics he provided through the Arrowhead Center were generally expected but still very nice to have in detail.

According to Peach’s slides, Eddy County’s per capita income in 2011 was about $41,500, easily putting it at the upper levels of the state. Lea County clocked in at $37,900. In April 2013, Lea County’s unemployment was a low 3.3 percent, and Eddy County’s rate was 3.5 percent.

For comparison, New Mexico’s overall unemployment during the same period was 6.2 percent. The two counties are also growing – Lea County shot up by 1.85 percent from 2011 to 2012, while Eddy County went up .78 percent. New Mexico’s growth rate was .33 percent during the same increment, and the population decreased in 22 counties.

Recovery numbers are also nice. How about the fact that Eddy County’s gross receipts went up a whopping 57.8 percent between 2010’s first quarter and 2013’s first quarter! Lea County was high as

well, but the state’s percent change was a more sober 10.8 percent. The state and country are improving from the economic nosedive a few years ago, but some places are apparently doing more of the heavy lifting.

And yes, the economic demographic numbers correlate significantly with rig counts. Crude oil production in Southeastern New Mexico has rocketed up, from a little more than 55 million barrels in 2006 to about 85 million barrels in 2012. Eddy and Lea counties accounted for about 80 million of those barrels, with Eddy in the lead. Eddy County had a rig count of 43 in June. That’s down from 58 the year before, incidentally, but still the highest in the Permian Basin.

Just one more number, and then I’ll quit.

The City of Carlsbad issued 1,884 building permits during the 2011-2012 fiscal year.

For comparison, the City issued 945 during the 2006-2007 fiscal year. That’s a lot of building.

How long will it last? Dr. Peach and his fellow presenters seemed pretty optimistic, but just as important is what we’re going to do about it right now. So that’s the goal of this publication – to look at some innovators in Eddy and Lea counties who are building on a good thing. Whether it is a small business in Artesia introducing a product to the United States that may dramatically change odor control in the oil patch, scientists in the Waste Isolation Pilot Plant underground using WIPP’s salt beds for research, or engineers in Lea County taking a fresh look at some old potash reserves, what is most exciting is that the citizens of Southeastern New Mexico are not just sitting back and just enjoying the growth.

Innovation is everywhere.

A b o u t t h e e d it o r Kyle Marksteiner is editorial director of Focus on Industry & Focus on Carlsbad. He can be reached at editor@ad-venturemarketing.com.

Air Pollution Products & Systems Page 10

Chase Farms pecan orchard Page 26

Intrepid Potash HB Solution Mine Page 16

international isotopes Page 22 Intercontinental Potash Page 13 using wipp as a science lab Page 18 Southwestern Railroad Page 29 Rangeland energy Page 6

F oc u s on oil & gas was done and it came out favorable, we closed on the land. Now we’re moving forward with engineering and design work.”

The buzz of oil and gas activity taking place in Southeastern New Mexico will soon have a new hive.

NEW MEXICO

TEXAS

Rangeland Energy, a Sugar Land, Texas, based company, will soon begin development of the RIO System, a large terminal facility and pipeline system. The company expects to invest more than $150 million in the terminal and pipeline system, which will handle crude oil, frac sand, and other products. Frac sand is crush-

RIO HUB

TEXAS

STATE LINE TERMINAL

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Rangeland, founded in 2009, has already closed on the acquisition of approximately 300 acres of land north of Loving, noted Chris Keene, the company’s president and CEO. “We have been focused on due diligence,” he said. “We’ve completed everything from survey and title work to environmental and geologic assessments. When all that work

Once in place, the terminal will be a full-service facility for crude oil producers and buyers in the Delaware Basin. Initially, Rangeland will receive and stage frac sand for the production of crude oil, while receiving, storing and distributing crude oil to multiple downstream markets via pipeline and rail. Crude oil produced in the area will arrive on the scene via truck and pipeline and leave via pipeline or rail, depending on market needs.

map left: This map shows the region that will be covered by Rangeland’s RIO System. photo below: An artist’s rendering of the Rangeland RIO System.

Loving NEW MEXICO

resistant sand used by the petroleum industry in the hydraulic fracturing process.

Construction will include truck, rail, pipeline and storage-related infrastructure. Keene expects phase one of the project to be operational by early 2014, when he anticipates that transloading and manifest service will be up and running. Rangeland developed a similar terminal and pipeline system in North Dakota, the other region in the nation currently experiencing an oil and gas boom.

Rangeland is backed by private equity commitments from EnCap Flatrock Midstream of San Antonio.

RIO PIPELINE

M il e s

focus on industry | 2013

“In addition to the Loving facility, we plan to construct a pipeline that extends from the RIO Hub to a smaller terminal at the state line and over to Midland, Texas,” Keene added.

“We’ve seen a big desire on the part of our producers and marketers. I think there will be a number of different phases that will happen as the field continues to develop, and we’re thrilled about it.”

The investment indicates that the Delaware Basin oil and gas boom is going to be around for a long while.

“I used to be a producer, and when I talk to them now, they are looking at drilling programs that extend for the next 20 to 30 years,” Keene added. “That’s just unheard of. I think the Delaware Basin is a long-term play, and we’re just beginning to see the growth in production that will continue for some time.”

Keene added that political and community support has been high.

“We’ve had tremendous support, from the governor herself down to the mayors of Carlsbad and Loving and the local departments of economic development,” he noted. “Last time I spoke with the governor, I told her there’s nothing I need. Everyone has been working well with us. I sense a strong desire to continue growing the energy business in New Mexico.”

While it stands to benefit the entire local economy, Rangeland Energy’s facility will only be a couple of miles north of Loving, population 1,300.

A veteran of the oil boom in North Dakota, Keene said he appreciates the effort communities in Southeastern New Mexico are making to prepare.

While other developments are anticipated, Rangeland expects the terminal to be well underway by the end of the year.

“We are committed to the area,” Keene concluded. “We are moving forward and spending capital. We hope to be turning dirt within the next month or so. I’m optimistic about the growth of the project, and we see that reflected in the conversations we’re having with the customers we expect to serve at RIO.” For more information, please visit www.rangelandenergy.com.

“You can look at changes in traffic and the demand for schools, hospitals and utilities,” he noted. “I think it caught communities in other parts of the country by surprise.”

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F oc u s on the economy

New Mexico’s Rural Economy Growing New Mexico by Supporting Extractive and Agricultural Industries

S Jon Barela

Cabinet Secretary

New Mexico Economic Development Dept.

ince taking office, I often speak of what I call the “Rural Renaissance.” To achieve this objective and create a vibrant economy for our non-urban communities, we must support an environment in which the extractive and agriculture industries thrive.

These two sectors have provided livelihoods for countless New Mexico families for generations and are the backbone for our rural economies.

To foster this rural renaissance, the Economic Development Department focuses on encouraging job growth in these sectors which also bring significant revenues into the state. In fact, the oil and gas industry alone accounts for 90 percent of the state’s permanent fund in a typical year.

We work with other departments and state agencies to reduce the regulatory burden on these industries. While I believe in an “all of the above” approach to energy production, the traditional energy sources found in Southeast and Northwest New Mexico continue to be a big source of revenue for our state and a creator of jobs and wealth for our citizens. In fact, according to recent data, the average salary for a worker in the oil and gas industry is $86,000 a year.

I like to remind people in other parts of the state that if they enjoy their roads, bridges, highways, public school facilities and low property taxes, they have the extractive industries to thank.

As a department, we have turned our focus on seven target industries, two of which are energy & natural resources and value-added food production. In addition to our reserves

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of natural resources, New Mexico is home to more than 23,000 farms and 300 food processing companies.

These two industries complement our rural heritage and create economicbase jobs for New Mexico – jobs that come from products that are sold outside the state’s borders.

These exports are shipped not only domestically but also internationally.

This emphasis on economic-base jobs helped move New Mexico from 38th in the country in export growth to 1st in just two years, according to data from the U.S. Department of Commerce’s International Trade Administration.

At the state level, we have laid the ground work for regulatory reforms and paved the way for a businessfriendly tax environment to continue building on advantages that New Mexico already possesses. In 2013, we passed the New Mexico Jobs Package which included a reduction in corporate income taxes, infrastructure development tied to job creation and workforce training dollars to help fund new hires.

With these efforts, I expect New Mexico’s economic prospects to be very bright.

As a state, we have been blessed with abundant natural resources and a great climate for these industries. We must continue to foster these enterprises as we also transition to new forms of energy and technologies.

For more information on the state’s Economic Development Department, visit www.gonm.biz.

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F oc u s on technology

Airborne Iden If necessity is the mother of invention,

then refineries, dirty socks, chickens, sewers and 1,001 other sources of odors, along with dust and gases, share the credit for Airborne 10, an invention now being introduced to the United States out of a small business in Artesia.

Airborne 10 is a product distributed by the Air Pollution Products and Systems (APPS), a company largely prevalent in Great Britain. According to product literature, it was created from the “science of surfactant

induced absorption technology” that “increases the solubility of water by 500,000 percent.” When the product is pumped into the air, the absorption agent acts like a little magnet by attracting and holding containment

Mark “Rooster” Spolton and Suzie “Pepper” Morton stand in front of a Portable Independent Rotary Atomizer, which distributes the odor-nullifying agent Airborne 10.

Photo:

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molecules. These biodegradable molecules then fall to the ground, according to www.appsusainc.com.

Basically, it’s an environmentally friendly odor absorber that also absorbs dust and gases. Mark “Rooster” Spolton, president of T&C Tank Rental in Artesia, recently pursued some family connections to bring the product to the United States.

The product was invented by chemist James Edgar (a London resident at the time) and several other scientists, who

ntity developed a technology to infuse a hydrophilic and hydrophobic droplet together. They developed this into Airborne 10, a Surfactant Induced Absorption Technology.

“They brainstormed on coming up with a way to wash the air,” observed Rooster.

Rooster was born in Warboys, a small village in England near Cambridge.

That’s where he met the love of his life, Tammy, a Texan girl living in the United Kingdom with her family at the time. The couple returned to the United States in 1980 with few resources to their name.

“My dad stuck a £100 note in my pocket when we hugged in 1980,” Rooster recalled. Rooster and his bride moved to be near her family in Odessa, where he found work in the oilfield industry and eventually T&C Tank Rental. It would be ten years before he’d see his parents again.

He also picked up his poultry-themed nickname during his first few years in the United States. According to Rooster, he gained the name after he attended a professional wrestling match with Tammy’s brothers.

“We were in the front row, and there were fake blood and guts flying all over,” he recalled. “One of the bad guys was thrown at my feet, and I decided to jump in.”

The story goes that a co-worker watching the same match thought Spolton deserved a professional wrestling name to match his enthusiasm, and the name Rooster was born.

Rooster also turned out to have a gift for sales, and he eventually became general manager and then vice president of the company and ran the Artesia office.

There were some things he didn’t like, however, and one day in 2004, following some encouragement from local oilman Mack Chase, Rooster bought T&C and its offices in Artesia, Odessa, Hobbs and Denver City.

“Mr. Chase told me to stop whining and make an offer,” Rooster said.

Rooster asked Chase if he would back him if he couldn’t get the loan and he said yes, but Rooster was able to obtain funding through the Small Business Administration.

“What he did do is tell me to get in his pickup, and we spent the whole day together,” Rooster recalled. “He encouraged me not to give up.”

It was advice that Rooster took to heart, both in starting his business and helping him cope with the 2006 death of his wife, Tammy.

He became interested in APPS when he was visiting England to attend a nephew’s wedding. A cousin of Rooster’s is managing director of APPS UK, and Rooster wanted to know if Airborne 10 would work on hydrogen sulfide gas, a common source of odor in the oilfields.

“I thought maybe I could incorporate what I know in the oilfield with what they do,” he said, noting that it did work on H2S. “I also thought it was too good to be true.”

In England, Airborne 10 is used to 2013 | focus on industry

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combat the odors and particulates at London’s waste transfer station and at a third of the country’s chicken farms.

Rooster visited a few spots around his homeland and received positive testimonials.

According to Morton, Navajo is already using it to handle odors at its refinery, while car companies, Elks Lodges and motels have all jumped on Airborne 10 as a way to get rid of the smell of cigarette smoke.

“Their parting words to us were ‘We wouldn’t be without it,’” he noted.

Morton noted that the chemical is currently produced in the United Kingdom.

After conducting some additional research, Rooster decided he wanted to bring APPS to the United States. In the spring of 2010, he partnered with Suzie “Pepper” Morton to develop and operate the company APPS USA, Inc. The product’s popularity, Morton said, is partially due to the fact that it does not just fight one bad odor with another more pleasant odor.

“It’s not a masking product. It’s an eliminator,” she said. “It eliminates the odor.”

“Once we see a high demand here, we hope to produce here to meet that demand,” she added. “Our plan is to manufacture Airborne 10 in the states, which will create many jobs.”

A popular method for distributing Airborne 10 is the Portable Independent Rotary Atomizer, designed for temporary use at remote locations. Airborne 10, which appears as a mist, is also sold for distribution in small, office-sized dispensers. It comes in berry, citrus and odorless

varieties, and the product is harmless if swallowed or inhaled.

There are plans to use the product at the Olympics in Brazil. For Morton, an especially convincing personal application was when she tackled her grandson’s room.

“The dirty sock smell was pretty bad,” she said. “I brought a fogger (of Airborne 10) in there and blasted for five minutes, and it didn’t stink for three days.”

Farms, restaurants and festivals with a large number of portable toilets are all also on the list of potential locations that would benefit from Airborne 10.

Any source of bad odor, gas or dust is a potential client.

“We can do anything,” Rooster concluded.

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F oc u s on potash

Sometimes an Area Just Deserves a Second Look I

ntercontinental Potash Corp’s (ICP) Ochoa Project, expected to begin production in 2016, will be the most advanced sulphate of potash (SOP) project in the world, representing a long-term source of premium potassium fertilizer. But, for nearly a century, the resource was virtually ignored.

This variety of potash is used as fertilizer for growing vegetables, fruits, nuts and tobacco and will be sold internationally. It’s not a direct competitor with the muriate of potash (MOP) mined by the area’s two other potash companies, Mosaic and Intrepid. The project will create around 1,000 construction jobs and, once complete, the mine, processing plant and administrative office will employ a total of around 40.

What is potash?

Potash is the collective term for a potassium-bearing, chemical sedimentary mineral deposit that is the result of low-temperature chemical processes. Commercially, potash is typically used for fertilizer, and there are a wide variety of types of potash. Sulphate of potash, or potassium sulphate, is a non-chloride fertilizer product that is highly beneficial for fruit, vegetable, tobacco and nut crops. Muriate of potash, or potassium chloride, is used on carbohydrate crops including wheat, oats and barley.

will be made to the final EIS. The Bureau of Land Management is expected to issue a record of decision by early next year. ICP is currently 20 months into a permitting process, expected to take a little more than two years total.

In the meantime, ICP has also been busy with resource assessment. The company has drilled 32 holes since 2009, and efforts have produced data confirming what previous research theorized – there’s a consistent 4 to 6.5 foot thick polyhalite (the mineral

But there are a few steps left before ICP can begin construction.

“We’ve got a set of engineering studies going on, and we’ll publish a feasibility study to quantify the cost of what we’re doing,” noted ICP Chief Operating Officer Randy Foote.

“That’s what the banks will want to see as we acquire finances.”

ICP is also working through the permitting side of the process, which began in January of 2012. A draft Environmental Impact Statement has been published, and there will be meetings for public comments in Carlsbad, Hobbs and Jal in late August. After that, changes (if needed) Photo: Intercontinental Potash Corp. will employ around 400 people in the production of high-grade, low-cost sulphate of potash (SOP).

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containing SOP) bed located between 1,500 and 1,600 feet below the surface.

“But you can’t break ground until you have a permit in hand,” noted Foote.

ICP’s holdings are located directly to the east of the Waste Isolation Pilot Plant, but are largely in Lea County.

Although it has yet to open, ICP is tied to a very impressive legacy.

It all started during World War I, Foote said, when rival Germany had the market cornered on the potash industry.

“The Germans developed the commercial potash industry as you know it today,” Foote said.

With the international potash supply cut off, Congress passed a bill encouraging an exploration program to find a domestic source.

Researchers found polyhalite, but that wasn’t exactly the variety of potash needed at the time. They turned west, found sylvite and langbeinite in Eddy County, and the United States entered the potash market.

The polyhalite to the east stayed there until 2008, when the director of the industrial mineral section of the United States Geological Survey began looking at some of the data collected some 80 years earlier, as well as information from oil and gas drilling logs in the area. Intercontinental Potash formed that year and began adding to the pool of research.

Polyhalite isn’t rare, but what is rare is to have it thick enough to mine and close enough to the surface to make mining affordable. ICP’s relatively low overhead will allow it to be the world’s lowest cost producer of SOP. “Potash has been operating out here since the 1930s, so the existing mines are mature higher cost producers of MOP. Our project will start with a high grade deposit and will be a low cost producer of SOP. It’s a unique resurgence of the same industry,” Foote noted.

For more information, visit www.icpotash.com.

CP Potash’s Ochoa Project Area Southeastern New Mexico

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Making Opportunities New Mexico State University-Carlsbad, Intrepid Potash Inc. and The Mosaic Company have recently partnered to form a program to help meet the area’s high need for highly-trained mechanics and electricians.

Intrepid and Mosaic’s joint donation of $700,000 will make the college’s industrial maintenance program possible. The program is still in development, but when complete, it is expected to offer two paths for students -- associate and certificate programs with specializations in electrical and mechanical.

According to an NMSU-C press release, the curriculum is expected to include both classroom study and hands-on training on various kinds of machinery. The classroom portion of the program will include training in current technology -- electrical, hydraulic, engineering, mechanical

drawing, mathematics, blueprint reading, and computer programming.

“The Industrial Maintenance Training Program at NMSU-C will do great things for our friends and families here in Carlsbad and the surrounding communities,” said Tonk Chester, human resources director with Mosaic Potash.

“First, it will enable many people to greatly improve their quality of life by giving them the education and confidence they need to pursue a career, not just a job, and make a great living for their families. Second, it will provide much needed, highly skilled workers for industries such as mining,

oil and gas and many others that are the backbone of our community. And third, it will be an avenue for employers to provide serious industrial maintenance training to their employees who are already in maintenance and need to hone their skills.”

Internship opportunities will also be available to selected students with both potash companies.

“We believe we’ve identified a need for qualified personnel in this area of study and, thanks to the generosity of our donors, have been able to work proactively to meet that need,” added Dr. John Gratton, president at NMSU Carlsbad.

“The advantage for graduates is being able to promote themselves as someone with training and experience in this field, something that makes them extremely attractive to local employers.”

Students will be able to seek employment right after graduation or transfer to fouryear schools such as NMSU’s Las Cruces campus to pursue a Bachelor’s degree in engineering.

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F oc u s on potash

The Right Solution for extracting potash

Intrepid Potash’s HB Solar Solution Mine is in the midst of its first evaporation season, and Carlsbad General Manager Robert Baldridge says final construction is underway.

The company received permission to conduct solution mining at its HB Mine, an area north of Hwy. 62-180 and about 20 miles east of Carlsbad that has been idle for some time.

six injection wells and five extraction wells and 37 miles of associated pipeline.

Once it is saturated with potash, the brine is pumped out of the mine through the extraction wells and transported into lined solar evaporation ponds. There will be 18 ponds when the process is completed,

each about two feet deep for a total of 540 acres of surface area. As the brine evaporates, salt and potash are left behind.

After that, a scraper harvests the potash from the ponds and transports it to a processing facility. There, potash is separated from salt and refined for sale.

Intrepid received a record of decision from the BLM in April 2012 allowing the company to begin with the project.

Intrepid began injection into the idled HB Mine works in August 2012 and began extracting some material and putting it into evaporation ponds by November of 2012.

Pumps inject a salt-saturated brine underground to dissolve and recover potash from the previously mined areas. Most of the existing salt and rock is undisturbed, which means there is little chance of potential surface disturbance. Intrepid will have

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The entire process takes about a year, Baldridge noted.

year. It’s also not the only big thing going on at Intrepid either.

“We’re working on final construction of three remaining ponds by August,” he said. “We’re also completing our mill that will process the salts out of the ponds.”

“We have many continuous improvement projects going on,” Baldridge noted. “We’re going to continue to modernize our plants and invest in our people.”

The entire trip (injection, evaporation and processing) takes about a year. A couple of ponds will be in harvest at any given time, though most are timed for the harvest to take place during the winter months.

The $230 million project created 30 to 40 new full-time positions and required around 150 construction jobs. The project’s expected lifespan is 28 years, and it is expected to yield around 150,000 to 200,000 tons per

Baldridge said his company will also be exploring opportunities for additional use of its solar evaporation technologies.

“It’s a key strength that our company brings to the potash industry,” he said.

Baldridge said Intrepid faces similar problems as those faced by other companies in filling job vacancies and finding housing for new employees, but noted that those are good problems to have.

“We’re looking for people with a good industrial background and a focus on safety,” he added.

And, in case anyone is wondering, the “HB” in the HB Solar Solution Mine stands for Hugh and Bob, the mine’s original co-founders.

Photo left page: This photo shows the erection of the structural steel for the HB processing facility where salts from the ponds will be sent to separate the potassium salts from sodium salts.

An aerial photo of the Ponds 1 through 9.

The water color is achieved with dye to enhance evaporation.

You can see the road down the center of the ponds where scrapers will access the ponds for harvest.

Photo below left:

Photo below right: The different phases of construction of the ponds. The ponds in the bottom right show the preparation of the base. In the bottom left a 60mm liner is being laid down for salt piles to keep wind from blowing the liner. Top left shows the completed liner with 18 inches of salt compacted on top as liner protection. Top right show the first brine-filled ponds.

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F oc u s on WIPP

Using WIPP as a Science Lab The Waste Isolation Pilot Plant (WIPP) is well known as an operational success story. As of August 1, 2013, nearly 11,500 shipments of defense-generated transuranic (TRU) waste have been permanently disposed of in salt beds thousands of feet underground.

But an offshoot of WIPP is that it is also a great place for science, which is an industry of its own. Thick salt beds shield cosmic rays, making the WIPP underground a great place for a wide variety of experiments that depend on non-interference from background radiation. WIPP’s salt beds, the bottom of an ocean bed from several hundreds of millions of years ago, are also naturally well suited for experimentation on the behavior of salt.

“The message the presence of this research in WIPP sends is sort of ironic,” said Roger Nelson, chief scientist of the Department of Energy’s Carlsbad Field Office. “You can do the most sensitive detection experiments right next to mega-curies of nuclear waste.”

The southern portion of WIPP’s underground, 2,150 feet below the desert surface, is the disposal area.

Several smaller areas in the northern section of the underground site collectively serve as the Underground Research Laboratory.

“There’s been science at WIPP ever since the early days because of the low background radiation,” Nelson said.

“There’s naturally occurring radiation everywhere, but if you surround yourself with salt, almost pure sodium-chloride, you have very little.”

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focus on industry | 2013

“It effectively uses WIPP’s real estate and the expertise it provides,” noted WIPP Test Coordination Office Manager Doug Weaver. “It’s a prime location to conduct these types of activities. We can handle waste and accommodate the science.”

WIPP’s Test Coordination Office (TCO) is a multi-organizational team managed by Los Alamos National Laboratory-Carlsbad Office and serves as a liaison between scientists conducting research in the WIPP underground and the operations,

engineering, construction, and safety organizations at WIPP.

The idea is to ensure that both scientific and operational goals are met. For example, the TCO folks make sure that WIPP’s visiting scientists comply with all safety and quality requirements associated with the site being a mine, an underground research laboratory, and a nuclear facility. In addition, they ensure the visiting scientific staff receives the support they need to conduct their experiments.

The TCO is effective because its members have backgrounds in both science and mining.

The Enriched Xenon Observatory (EXO) located in the WIPP underground.

photo:

“We have been very successful with this model over the years,” Weaver added. “We have provided this specialized capability for decades at the Nevada Test Site, at the Yucca Mountain Repository Project, and now have the opportunity to support the WIPP program.”

In 2000, WIPP “ramped up” its science presence with a special convention.

WIPP’s History as a Science Lab

The flagship of WIPP’s theoretical experimentation is the Enriched Xenon Observatory (EXO)-200, a project designed to look for an ultra-rare process called neutrino-less double beta decay. EXO is a Stanford University-led project with a fairly permanent presence at WIPP and in Carlsbad. Stanford even rents a couple of local houses for visiting scientists.

Repository Science and Theoretical Physics Prior to WIPP’s opening, WIPP’s underground was used by Sandia National Laboratories for applied demonstrations of how WIPP might work. But the site soon became attractive for experimentation outside of the scope of directly-related testing.

Cosmic rays make certain types of experiments impossible, and in the 1990s, technicians with Los Alamos National Laboratory began using the WIPP underground to calibrate certain detection devices.

“We were trying to determine whether or not the industry of underground science was interested in WIPP’s underground,” Nelson said. “And they were.”

EXO-200 recently recorded an impressive new result, said researcher Michelle Dolisni with Drexel University. The underground lab recently “captured” the most precise measurement of the half-life of a twoneutrino double beta decay.

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“The process that we’re searching for is extremely rare, and cosmic rays would create too large of a background in a laboratory,” said Dolinski, noting that WIPP has some advantages over other underground labs. “The salt is lower in uranium and thorium than other underground laboratories in hard rock caverns, and the amount of radon in the air is also relatively low. All of those naturally occurring radioactive elements can contribute to background, and we want to eliminate them as much as possible.”

Another double beta decay project, dubbed MAJORANA, uses WIPP as a testing area for future planned experiments. MIT is conducting a dark matter experiment – a search for the universe’s “missing mass” at a small facility next to EXO’s lab, while New Mexico State University leads an experiment to see how bacteria and other organisms cope in areas such as the WIPP underground that

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have almost no background radiation.

Most of these experiments, with the exception of MAJORANA, take place in the North Experimental Area of the WIPP underground.

generating defense waste. SDDI’s goal is to conduct generic, cost-effective field tests of the emplacement of heat-generating radioactive waste and validate modeling efforts.

Salt Defense Disposal Investigations (SDDI)

Nelson said there have been many new discoveries and conclusions since similar experiments were conducted

Many repository-related tests were conducted in a now closed-off portion of the North Experimental Area during the 1980s, but an area slightly to the southeast is going to be used for the anticipated Salt Defense Disposal Investigations (SDDI), a field-scale thermal test for heat-

decades ago, meaning that new layouts and disposal styles should be tested and demonstrated.

Because WIPP’s underground was an ocean bed that evaporated, the salt crystals contain small amounts of brine, or salt water. Scientists want to see how these crystals and salt water

These models show what the SDDI and future thermal experiment in the WIPP underground might look like.

photos:

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will react when they are exposed to a small amount of heat. Such generic demonstrations help scientists evaluate the applicability of the results of computer modeling. A sound scientific basis also helps elected officials and government managers make policy decisions.

In a nutshell, SDDI is going to put canisters in the experimental area that give off a small amount of thermal heat, similar to the thermal levels generated by the nation’s defense high-level waste inventory. As the heat migrates into the surrounding salt beds, researchers will be especially interested in what happens to the small amount of brine water in the underground. Will temperatures become high enough to cause salt crystals to release their internal brine, and will the liquid migrate closer to the heat source, or farther away? These are the types of questions this testing is seeking to address.

Based on computer modeling and prior experimentation in Germany,

elsewhere in the US, and at WIPP, researchers believe that the salt water will be pushed away from the heat source because water evaporates at the heat sources and condenses back to water where it is cooler, further away.

This would help evaluate salt beds as a potentially safe location for disposing of defense high-level waste.

The mining is almost complete for the first phase of the SDDI facility, Weaver said, but the challenge has been securing sufficient funding to meet an experimental start date of 2015.

There are plans to conduct similar experiments at higher temperatures as well. SDDI is the prototype experiment for these later, hotter tests.

International Program

There’s also a global component to WIPP’s science, noted Abe Van Luik, head of WIPP’s international science program. The United States, Germany, France and other countries have agreed to exchange the information

they’ve collected about salt and various other geologic mediums.

“The Carlsbad Field Office also supports the International Atomic Energy Agency in its mission to make world radioactive disposal processes safer,” noted Van Luik. “We share our knowledge concerning the operation of a repository in salt with the world at large through a program of education for nations just beginning to address the disposal of radioactive wastes in deep geologic repositories.”

“The Germans have extensively studied salt dome behavior for waste disposal,” Nelson added. “We’re making sure we know as much about disposal in evaporite salt formations.”

While WIPP is known as a repository for nuclear waste, the project’s second job – as an underground science laboratory – may be just as important and its impact may be as long lasting.

For more information, visit the WIPP science page at www.wipp.energy.gov/science.

2013 | focus on industry

21

F oc u s on nuclear energy

International Isotopes Eager To Join Nuclear Family T

he newest member of Southeastern New Mexico’s nuclear corridor may have to wait just a little while longer before joining the family.

facility about 15 miles west of Hobbs.

Everything is still moving forward, but not at the pace originally hoped for, noted Steve Laflin, INIS president and chief executive officer.

International Isotopes, Inc., (INIS) plans to open a depleted uranium hexafluoride de-conversion and fluorine extraction process (FEP)

INIS will be a supplemental business to the URENCO USA National Enrichment Facility near Eunice, which uses a gas centrifuge to enrich uranium into reactor-grade fuel.

Enrichment processes increase the

A drawing of what the de-conversion and fluorine extraction facility will look like.

photo:

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focus on industry | 2013

percentage of Uranium 235 in natural uranium.

URENCO was one of four companies interested in taking advantage of the expiration of the “Megatons to Megawatts” program, which recycled highly-enriched uranium from Russian nuclear warheads into low-enriched uranium fuel for U.S. nuclear power plants. The program is wrapping up in 2013, leaving a need for enriched uranium.

AREVA, USEC and General Electric also planned to open similar plants in the United States, but all three have been delayed due to a variety of technical, financial and political issues.

Laflin said URENCO will provide his company with about 50 percent of the material it needs to be up and running, but the delay of the other three projects means a delay for INIS as well.

The uranium enrichment process produces a byproduct called uranium hexafluoride (DUF6), which is where International Isotopes would come in.

The INIS de-conversion process will convert the DUF6 byproduct (or tails) into depleted uranium tetrafluoride (DUF4). INIS will then extract fluorine from the DUF4 for use in the manufacturing of specialty, highvalue fluoride gases, used in a variety of industries, including medical and microchip manufacturing. It’s an environmentally and economically

sound process that will safely produce important fluoride products for many technological and alternative energy applications.

“We haven’t started construction, but we have engaged an engineering team to do the design,” Laflin added. “We’re advancing our designs slowly forward right now.”

International Isotopes was incorporated in 1995. The company has had its headquarters in Idaho Falls since 2001. INIS has already constructed a high-purity fluoride gas pilot production and analysis facility in Idaho for testing key components for the larger New Mexico facility.

The layman’s part is that the plant will generate about 125 full-time jobs in Southeastern New Mexico and another 250 construction jobs.

Additional expansions are planned within the plant’s first ten years. While delays in the nuclear industry are fairly common, International Isotopes

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had been on the fast track for some key components of its timetable.

For example, a construction and operating license with the Nuclear Regulatory Commission was obtained on schedule within just four years, impressive for a small operation.

“We just want to reassure folks that we’re still very dedicated to the project,” said Laflin, noting that GE seems to be making some significant strides with its planned facility in North Carolina. “Just because we’re not building buildings doesn’t mean we’re not going to be.”

“The City of Hobbs is very pleased with International Isotopes’ decision to construct a new facility in our area,” said Hobbs Mayor Sam Cobb. “Their management team is highly regarded by our community for their expertise and credibility. They have kept us fully informed of the activities of the domestic and global nuclear industry and how it relates to their plans as they continue to work in a deliberate

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fashion to continue the design phase of the project.”

Once the project is up and running, Laflin estimates that about 60 percent of the positions will be for skilled technicians, while the other 40 percent will include engineers, managers and administrative positions.

Being located in the midst of the area’s “nuclear corridor” is a huge plus in terms of drawing qualified workers and having an understanding, accepting public. URENCO, the Waste Isolation Pilot Plant (WIPP), and a Waste Control Specialists facility for low-level waste are all nearby.

“No matter what the technology is and no matter how safe it is, if the public is against you, you are not going to photo below: De-conversion equipment.

Photo Right: Diagram showing where International

fits into the process.

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focus on industry | 2013

Isotopes

license a plant,” Laflin noted. “We knew the odds of being accepted here were pretty high, and that’s an aspect we considered while locating here.”

Currently, most fluoride gas is produced, not reprocessed, so the International Isotopes program would be environmentally friendly.

“The interest in the project has not changed and our belief in this business model has not changed,” Laflin added.

“We could finance this right now, but not on the terms we would like. We’ve been working too hard on this to just hand our keys over to someone else.

We’ll bide our time and get the rest of our capacity under contract first.”

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F oc u s on agriculture

from the

Orchard Table to the

by Staci Guy

Have you ever stopped to think about where those delicious pecan pieces atop your ice cream sundae came from, or what farm produced those perfectly halved pecans on those slices of restaurant pecan pie? Chances are they were grown in orchards like those owned by Chase Farms.

In the late 1980s, local businessman and entrepreneur Mack Chase ventured out from the oil and gas business to dabble in a new industry -- pecan farming. With only a handful of employees, Chase Farms was incorporated in 1987. The rest, as they say, is history!

“We planted our first orchard – 40 acres – over by the shop on Bolton Road,” said farm manager Bill Kuykendall, who was one of the very first employees of Chase Farms. “We filled up that farm and then purchased another one. And that’s how we’ve done it since we started.”

Fast forward to 2013 and Chase Farms is one of the largest pecan producers in the region with more than 3,000 acres of farmland in New Mexico – the Pecos Valley to be specific – and another 2,500 in Arizona. And those four or five employees? Well, that number now hovers around a couple hundred.

“I don’t think anyone really knew it would get this big,” Kuykendall admits. “We hoped it would and we knew we wanted it to, but we didn’t really expect this. And we’re still growing as fast as we can.” photos left to right:

26

• The majority of trees planted by Chase Farms are what they call bare roots. Typically trees that are two to four years old are considered bare roots.

• For the first two years after bare roots are planted, crews spray white latex paint on the west side of the trees’ trunks to act as sunscreen and protect them from the setting sun.

• Pecan trees in an orchard, planted three years ago.

focus on industry | 2013

The pecan growing process

Kuykendall was kind enough to share some industry secrets and give readers a crash course in pecan growing 101, starting from square one.

Planting

“When we purchase a new farm, we either laser the land completely level so we can flood it (to water the trees), or if the land is too rocky or sloped or not good for lasering, we will put in sprinklers,” he shared.

Once the land is prepped and ready, it’s time for the trees – bare roots usually. “Bare roots are what we call trees that are two to four years old,” he explained. “We keep them cool and moist with a little sawdust until we are ready to plant them.”

In some cases, however, a new piece

of farmland will get trees that were “crowded into” a different farm land as bare roots and transplanted once they reached an optimal size. During this process, Kuykendall said they will crowd in a large number of bare roots and once they start growing and overcrowding the land, his crews will move a portion of them to a new piece of farmland.

“The tree spade only gets a quarter of the roots or so, so you have to cut the tops back so they don’t go into shock and die,” he added.

Once planted, Kuykendall said pecan trees typically take eight to ten years to begin producing quality nuts.

It’s a process that takes time and money. “Basically, the older trees are supporting the newer trees because they take a lot of water and fertilizer and care for a long time before you can make any money off of them,” he noted.

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Harvest

When the trees have reached optimal maturity for harvesting nuts, the real work begins! Harvest at Chase Farms usually begins around Thanksgiving. Kuykendall explains, “First, we wait on a freeze to shed the leaves. The sun will help in the drying process, and as soon as they are dry enough, then we will shake the trees with machines. The pecans fall to ground, and then we sweep them up into rows with another machine.

Then a harvester comes along and picks up the wind row, blows leaves and dirt out and hauls them to the plant. Mixed in with the pecans are rocks and sticks and various bits of debris.”

“Through a series of machines we take out more dirt and trash, we take out the rocks and sticks and try to get hulls off the ones that came in with hulls on them; then using air, we separate the good ones from the bad ones. It’s a pretty complex process, really.”

To put the process into context, Kuykendall said on any given day during harvest, Chase Farms (in the Pecos Valley) will harvest and clean about 75,000 pounds of pecans per hour, per day. “On a good day we might do half a million pounds at the plant.”

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2013 | focus on industry

27

Shelling

From harvest, Chase Farms pecans travel to their plant in San Saba, Texas, for shelling. The plant, owned

by Chase Farms, is one of the top 10 pecan shelling facilities in the country.

At the plant, the pecans are shelled, packaged and shipped to stores where the public can buy them, or they are sent to large food manufacturers, such as Kraft or Planters or even ice cream stores.

Between harvests

It probably goes without saying that work on the farms doesn’t cease after harvest ends in January. “Between harvests is when we move trees,” Kuykendall said. “We prefer to move them when they’re dormant, which is around the end of harvest

28

focus on industry | 2013

through March. During that time we are also hedging – keeping trees at a manageable size so sunlight is able to get to the tree – and we clean up after hedging. We try to do the majority of other pruning then too.”

Starting in April and lasting through October, crews water and fertilize the trees, work on controlling weeds and spraying nutrients. They also plant bare roots in January and February as well, again, trying to do all of their pruning and planting when trees are dormant.

And then November rolls around, and the process begins all over again – time for harvest!

After more than 25 years in the pecan business, Chase Farms is still going strong and is showing no signs of

slowing down any time soon. “We buy farms as they become available, and we continue to put in trees as fast as we can,” Kuykendall said.

Whether you are entering the Artesia city limits from the north, south or east, you are sure to drive past one or two Chase Farm orchards.

photo below: Sprinkler systems are put in place in orchards where lasering is not an option, whether due to rocky terrain or sloped, uneven land. When possible, farm manager Bill Kuykendall said they prefer to laser new land, which allows them to flood the orchards rather than using sprinklers.

The sprinklers pictured here are providing water to pecan trees that were planted about two years ago.

F oc u s on the railroad

All the Livelong Day As industry keeps growing in Southeastern New Mexico, the folks who link the region with the rest of the world are paying close attention.

John McCormick, general manager of Southwestern Railroad Inc., said the rail company’s presence in the area has grown significantly over the past few years and additional growth is expected.

Southwestern Railroad operates freight services on a leased line of the Burlington Northern-Santa Fe between Clovis and Loving, including the Carlsbad and Loving industrial spurs.

The incoming facilities likely to result in the biggest rail growth are two

anticipated trans-loading facilities related to the oil and gas industry – owned by Rangeland Energy and another similar company. Each facility will need around 18,000 feet of additional track, McCormick estimated.

Another company, Murex/Cetane, has already broken ground on a unit train facility on property they own along Highway 62-180. That project will add about 17,000 feet of track.

Southwestern Railroad has a sister company that may bid on the

railroad’s construction, but the focus of McCormick’s office will be on operations.

“So, yes, we’re increasing our scope,” he said. “We’re building our locomotive fleet up, little by little, and we’re building our crew base, both here and at Clovis.”

Crews in Carlsbad run the local switching operation, track department and rail car repair department. The photo left: John McCormick, General Manager of Southwestern Railroad Inc., says his company is adjusting for rapid expansion in the area. photo inset: The local rail yard. Southwestern Railroad is currently in the process of painting its entire locomotive fleet.

2013 | focus on industry

29

car repair department performs work on almost any rail car that comes in. A subcontractor cleans the rail cars.

Southwestern Railroad has a close relationship with BNSF and builds all the outbound trains per destination, using BNSF locomotives. This allows BNSF to put their crews on the train once it arrives in Clovis, NM, and continue on across the country to the final destination.

SW Train crews that live in Clovis have the job of running cars to Carlsbad for use. “Mostly, they will deliver a train of empty cars to Carlsbad, and we’ll have a loaded train waiting for them to take back,” McCormick said. The Clovis teams have to rest ten hours before they can head back, so McCormick is no stranger to Carlsbad’s surging hotel costs.

Southwestern Railroad had 23 local employees when the company took over in 2004. Today, McCormick has a staff of about 45, mostly Carlsbad residents. The responsibility includes

about 183 miles of main line and another 70 miles of industrial track linking Mosaic and Intrepid.

The railroad currently handles approximately 40,000 carloads annually, using four GP40s and six GP40-2 locomotives.

McCormick said he’s been working with some companies in the oil and gas industry for the past three years to prepare for added growth.

Both incoming trans-loading hubs (basically, an oil and gas base of operations offering frac sand, pipeline and rail) plan on building what’s called a Unit-train facility, a train with all of its cargo dedicated to one project.

“Both of these places are planning manifest tracks in addition to their unit train loop track,” McCormick noted. “We’ll give it (the train) to them. They’ll unload it, and when they are through with it, we’ll pick it up and take it back.”

McCormick started working on the railroad in Carlsbad in 1979.

“I think for 30 years now, I’ve heard that potash is dwindling away,” he observed. “But it’s just getting bigger and bigger.”

Down the road, McCormick would like to see someone build a local distribution center for more commercial products – a warehouse connected to rail. Southwestern Railroad is currently in the process of painting its entire locomotive fleet. The company, with the help of the New Mexico Department of Transportation, is also starting a $2.1 million crossing project north and east of Carlsbad.

“We’re redoing every railroad crossing on Hwy 31,” McCormick noted.

“We’re putting in surfacing concrete panels for crossing, and each one is getting signalized. It’s going to be a little bit of a change.”

With a healthy potash industry and a rocketing oil and gas trade, chances are pretty high that McCormick and his staff will be working on the railroad − all the livelong day.

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