4 BASIN RESOURCES
Summer 2014
contents
Energy Week Industry leaders show eighth-graders the importance of Basin’s energy production
Desk and Derrick
28
Local club has leaders at international, regional and local levels
Open for business Museum’s new energy wing up and running
Four Corners Oil and Gas Conference
8
Conference brings industry leaders, new ideas
San Juan Basin has vital role
12
34
USDA invests in renewable energy
Dirt Bandit’s new facility will have state’s only asphalt recycling equipment
Praxair expands
22
56
50
School of Energy classes long distance
58
SJC online courses lead Vann to degree
40
President wants 133.7 million for BLM’s Oil and Gas Management plan
Should energy independence be America’s goal?
Repurposing roads, cement
Gov. Susana Martinez visits Kirtland plant
Rich in energy resources, state a big part of U.S. picture
BLM 2015 Budget Plans
16
Energy News
61
Across the nation
46 www.basinresourcesusa.com • SUMMER 2014
6 BASIN RESOURCES
Editor’s note
Ready, willing and more than able 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 perDon Vaughan cent of state government revenue coming puBliSHER from the oil and gas industry. Here in the San Juan Basin we struggle Cindy Cowan Thiele and thrive around those numbers. There’s EDiTOR been little to smile about here for awhile with the glut in natural gas taking its toll Debra Mayeux on rig numbers. Dorothy Nobis However, in the last few years we’ve CONTRiBuTiNG WRiTERS gone from a glimmer of hope to guarded Josh Bishop optimism. CONTRiBuTiNG pHOTOGRApHER Producers currently are putting some money behind that optimism and we Suzanne Thurman again are looking at putting some forward DESiGNER progress in the Basin. Work has begun on the San Juan Shelly Acosta College new School of Energy. DeYan Valdez The vision of the School of Energy is Aimee Velasquez to become a national leader in energy SAlES STAFF production technical education, and to provide training in all energy sectors, For advertising information including oil and gas, power generation, Call 505.516.1230 and coal. Students will have the opportunity to www.basinresourcesusa.com learn everything from how energy is produced 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 Majestic Media a big turnaround in state oil production. 100 W. Apache Street Excluding federal offshore areas, in Farmington, NM 87401 2013 New Mexico ranked sixth in crude 505-516-1230 oil production in the U.S. www.majesticmediausa.com New Mexico’s 2013 oil production was Basin Resources magazine is published four times a approximately 97 million barrels – a 17 year by Majestic Media. Material herein may not be reprinted without expressed written consent of the publisher. Opinions expressed by the contributing writers are not necessarily those of the publisher, editor or Basin Resources magazine. Every effort has been made to ensure the accuracy of this publication. However the publisher cannot assume responsibility for errors or ommissions. © 2014 Basin Resources magazine.
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.
Cindy Cowan Thiele
www.basinresourcesusa.com •SUMMER 2014
8 BASIN RESOURCES
Conference brings industry leaders, new ideas together Every other year, the Four Corners Oil and Gas Conference brings industry professionals together to learn about new technology, 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 between API (Four Corners Chapter of the American Petroleum Institute), SPE (Four Corners Section of the Society of Petroleum Engineers), NACE (Sandia Mountain Section of NACE International), 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 committee researches topics, possible speakers, rules and regulation changes, and industry news. Each month, the committee gets together to discuss 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 represents 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 scientist 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 Productions; and Rod Troxell, a Healthy Safety and Environmental engineer for PESCO, are all past chairmen of the conference and serve as advisers.
* Conference 15
ranDy PaCheCo Dean of SChool of energy San Juan College www.basinresourcesusa.com • SUMMER 2014
10 BASIN RESOURCES
Professionals, businesses come together Four Corners Oil and Gas Conference set for May 7 and 8 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 Corrosion Engineers, or NACE, and the American 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, taking its “home” from the Civic Center to san Juan College to McGee Park as attendance demanded more growth and more room.
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12 BASIN RESOURCES
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 role Rich in energy resources, New Mexico a big part of U.S. picture 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 percent of the world’s population, and in actuality 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 barrels. 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 independent. It’s not the end of the world, but it is not an ideal situation,” T. Greg Merrion, 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, Merrion 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 remains 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 economy has been based,” Farmington Mayor Tommy roberts said. energy production has improved the quality of life in Farmington 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.
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“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 College 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 reserves, many people, including our U.S. Senators and Congressmen, have advocated for the exportation of natural gas. 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. “This is a tremendously important industry to New Mexico. Most New Mexi-
Because of the U.S. strong natural gas reserves, many people including our U.S. Senators and Congressmen have advocated for the exportation of natural gas. The San Juan Basin has a potential to develop “tens of trillions” of cubic feet of national gas to be marketed inside and outside of the United States, according to New Mexico Oil and Gas Association President Steve Henke.
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
SUMMER 2014 • www.basinresourcesusa.com
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 natural gas prices are not high enough to
14 BASIN RESOURCES provide a high rate of return. There also have been concerns from oil and gas industry officials regarding the regulations placed upon extractive industries utilizing 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 profiles, nations around the world are seeking opportunities to diversify their energy supplies. For the first time, The United States is being recognized as one of their options. Responsible development of natural gas can benefit the environment 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 exporting LNG to Europe and Japan; both nations 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 resources in the San Juan Basin. “Our students come from throughout the Southwest and the Four Corners and, when the new School of Energy is completed in the spring of 2015 and with the support of our partners in the industry, we’ll be able to provide that education 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 extraction 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 energy than we can produce,” he said, and that is what will keep the energy companies eyeing the San Juan Basin.
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BASIN RESOURCES 15
Conference
continued from 8
This year’s conference has 20 new exhibitors and 302 total exhibitors. 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 Secretary 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 revenue to our community and to our state. To be part of that industry
SUMMER 2014 • www.basinresourcesusa.com
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.
Industry leaders show eighth-graders the importance of Basin’s energy production Debra Mayeux Basin Resources 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 students 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 program when energy Week kicked off on april 23.
The students had an opportunity not only to hear from professionals, but also to see much of the equipment used in the field. There was a pumping unit, separator, compressor, driving simulator and fracking presentation in the museum’s parking lot. The students were told about the dangers of being around such equipment 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 companies 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 president of Merrion Oil and Gas, T. Greg Merrion, who shared information 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. SUMMER 2014 • www.basinresourcesusa.com
“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
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BASIN RESOURCES 19 He showed a picture of a person pedaling a bicycle and explained 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 improves the quality of life for humans 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.
SUMMER 2014 • www.basinresourcesusa.com
20 BASIN RESOURCES “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,
The students had an opportunity not only to hear from professionals, but also to see much of the equipment used in the field. and Merrion said nuclear is a viable option. “I am pro-energy. I love all of the sources,” he said. “Renewables 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.
www.basinresourcesusa.com • SUMMER 2014
22 BASIN RESOURCES
www.basinresourcesusa.com • SUMMER 2014
BASIN RESOURCES 23
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
SUMMER 2014 • www.basinresourcesusa.com
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
“This is better than a crushing facility. We’re not digging. We’re just recycling free material.” — Phil Mckinney Dirt BAnDits AsPhAlt service
www.basinresourcesusa.com • SUMMER 2014
BASIN RESOURCES 25 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 machinery. McKinney is in the process of building a 75,000-square-foot building at the new location, and he is eagerly awaiting the arrival of his state-of-the-art asphalt recycling machine. Once it is on site and ready to operate, the plant will be able to recycle asphalt and concrete with rebar. The materials will go in and come out with a 100 percent certification as a Leadership in Energy and Environmental Design, or LEED, recycled product. “The real bonus is the asphalt and concrete is engineered and can be used anywhere. 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 service to include asphalt patching and resurfacing. “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 asphalt 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 Farmington, 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
SUMMER 2014 • www.basinresourcesusa.com
no other asphalt or concrete recycling facilities 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 Management made a deal with McKinney to bring any concrete or asphalt from the landfill to Dirt Bandit so the material can be recycled 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 concrete. McKinney will take it for no cost. He then will sell the recycled material, such as “road base,” for a lower cost than retail. “We sell it for half the price of natural materials,” McKinney said. Municipalities
“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
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 recycled. “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 LEEDcertified and municipalities and contractors can apply for LEED points when using it. Because of the LEED certification, municipalities 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.
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28 BASIN RESOURCES
Desk and Derrick
Local club has leaders at international, regional and local levels Debra Mayeux Basin Resources
The association of Desk and Derrick Clubs has a 65-year history in the petroleum and energy industry. It had a humble beginning in 1949, when Inez awty Schaeffer 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 knowledge of the industry and a wider association 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 energy industry.” The Farmington club also established an
endowment through the San Juan College Foundation to provide financial aid to students 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 national level, and this year has been no different with three local members serving in leadership positions at the international, regional and local levels.
www.basinresourcesusa.com •SUMMER 2014
30 BASIN RESOURCES Linda Rodgers, the chief financial officer 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 responsible 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 Promise.” 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, because she found herself working in the industry without a deep understanding of how it worked. “I needed desperately to
“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
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 members opportunities for experiences not regularly offered to people, such as visiting offshore drilling sites and flying over the Gulf of Mexico in a helicopter to see operations in the area. She believes her participation in Desk
and Derrick has brought a different perspective 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 leadership. Leadership experience led her to obtain the position of association president, which was not the first national seat Rodgers was appointed to hold. Nationally, she has served as the Region V Director, treasurer, secretary, vice president and president-elect. Locally, she was treasurer, president and parliamentarian.
www.basinresourcesusa.com • SUMMER 2014
32 BASIN RESOURCES She hopes as association president to make this a “building year,” focused on technology and other educational opportunities. “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 “Embrace 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 members with the future members, who focus more on technology and social networking. This, she said could help the seasoned 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
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.
Learn mor Learn moree about Encana’ Encana’ss oper operations ations in San Juan: encana.com/sanjuan
www.basinresourcesusa.com • SUMMER 2014
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BASIN RESOURCES 35
Museum’s new energy wing up and running 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 middle 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 architectural 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
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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.
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38 BASIN RESOURCES 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 together,” 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 research into alternative energies,” Wilsey said. “It’s all a part of that picture, including conservation – insulating 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.
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40 BASIN RESOURCES
Bureau of Land Management Farmington Field Office
BLM 2015 budget plans President wants 133.7 million for BLM’s Oil and Gas Management plan Debra Mayeux Basin Resources The Obama administration has followed through on a promise to increase oversight and fees with regard to the development 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,
“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
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 request includes both direct appropriations and funding fees for service provided to oil and gas producers on federal lands, according to a press release from the bLM.
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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 landscapes. 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 additional resources to key initiatives such as the National Conservation Lands, wild horses and burro management, restoration projects, and many other areas. • Inspection and Enforcement Fee: In support of responsible 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 effectively. • 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 continue multi-year studies focused on the development of more effective and longer-lasting fertility control agents and techniques. It would also further the BLM's implementation of the National Academy of Sciences recommendations made in 2013. SUMMER 2014 • www.basinresourcesusa.com
42 BASIN RESOURCES 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, leasing and permitting capabilities, allowing the BLM to keep up with industry demand and workload. While vacancies in offices in high oil and gas production areas will be filled, the budget also will help fund enhanced environmental analyses 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 accountability, safety, and environmental protection 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
States to share nearly half of sale revenues BLM oil and gas lease sale nets more than $31 million Santa Fe – as part of President Obama’s all-of-the-above strategy to continue to expand safe and responsible domestic energy production, a Bureau 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.
• Generational Leap Forward in Online Data and Mapping: the BLM is seeking to take a major step forward in developing and using a simple, easy-to-use online interface where the public, industry, and BLM's employees and partners can find critical information about the landscapes we manage.
BLM oil and gas leases are awarded for a period of 10 years and for as long thereafter as there is production in paying 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 allow the BLM to take critical steps towards long-term conservation of the West's sagebrush ecosystems that are critical to SageGrouse 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.
budget request maintains funding for the BLM's Sage-Grouse initiative, which will
Get the Job Done Right
• Sage-Grouse Conservation: the
M a x i m i z e Yo u r W o r k Ve h i c l e . . . W e c a n h e l p . . . and install it!
Tints & Detailing too 2401 San Juan Blvd Like Us! Farmington 326-6644
www.basinresourcesusa.com •SUMMER 2014
the federal government and 48 percent to the state where leasing occurs. New Mexico will receive $13,844,227 on 22 federal leases totaling 6,947.19 acres from today’s sale, while Oklahoma will receive $265,869.12 on 10 federal leases totaling 616.52 acres, Texas will receive $890,077.92 on 43 federal 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 billion 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 Onshore Oil and Gas Leasing Reform Act authorize leasing of federal oil and gas resources. The 1987 law requires each BLM state office to conduct oil and gas lease sales on at least a quarterly 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 office, 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
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44 BASIN RESOURCES 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 resources 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 treasury during the next 10 years, of which approximately $1.7 billion will result from statutory changes. This budget also will focus aggressively on facilitating and supporting renewable en-
“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
ergies on public land, as the Interior Department 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, including 27 solar, 11 wind, and 12 geothermal 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 outdoor recreational opportunities and thoughtful resource management.” Kornze noted that the BLM generates an estimated $150 billion annually in economic output for the nation and supports more than 750,000 jobs through resource development and conservation and recreational activities on BLM-managed public lands.
www.basinresourcesusa.com •SUMMER 2014
46 BASIN RESOURCES
should energy independence be 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 Washington 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 happen, this policy “success” has little to do with Washington and a lot to do with hydraulic fracking and new technologies that have unlocked vast reserves of energy. nonetheless, as america approaches energy sufficiency, if not actual independence, it is worth discussing what these terms mean and how their various meanings could affect government policies and the u.s. economy as a whole. let’s take energy independence first. To be truly “independent” implies not relying on foreign nations for any of our nation’s energy resources. This is a highly unrealistic and unwise policy goal for many reasons. Obviously the term “independent” 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 computers, 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
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 of energy sources that are not interchangeable. 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 necessary 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 implications of independence as opposed to interdependence when it comes to energy? i’ll address each of these issues in order. Certainly energy is a unique resource. author 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 bananas, there is no real short-term substitute for a specific source of energy. Coal
can’t easily be substituted for oil and nuclear is not a substitute for natural gas. However, by its definition, “free trade” benefits both parties who choose to engage in it. in other words, nations that wish to export 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
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BASIN RESOURCES 47 and entrepreneurs to search for new sources of oil including Alaska and the North Sea. On point two, which relates to the noninterchangeability 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 recently discussed the misguided understanding of the Democratic Congressional Campaign Committee, or DCCC, relating to various resources and how they should be used to make America more “energy independent.” Among the DCCC’s recommended policies is the usual emphasis on “renewables.” One can agree or disagree with government “renewable” mandates, but it is hard to justify them as a means of enhancing America’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 environmental groups now oppose, the “renewable” fuel sources available for automobiles are extremely limited. Point three and the debate over what to
The final issue relating to interdependence vs. independence when it comes to energy is geopolitical considerations. do with America’s newfound energy bounty is perhaps the most important single energy issue in terms of its overall economic implications for the U.S. and New Mexico economies. While some supporters of energy independence are more comfortable 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 supporting 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
SUMMER 2014 • www.basinresourcesusa.com
and energy experts (including the author) to conclude that America could benefit greatly from exporting LNG abroad. Unfortunately, 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 export destination. Organized opposition to LNG exports comes from environmental groups, such as the Sierra Club which philosophically oppose fossil fuels, and some big businesses – led by Dow Chemical – which enjoy having a tremendous cost advantage over foreign companies for an important feedstock. Notably, New Mexico is the seventhlargest natural gas producing state and would be a likely beneficiary of LNG exports. The Rio Grande Foundation crunched the numbers based on other, national 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 technology, 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 exports are quite simple and involve classic special interest politics. Companies that
48 BASIN RESOURCES drill for oil – producers – generally favor exports. Refiners do not. That’s because refined crude products can already be exported. U.S. refiners are also currently swimming in an abundant supply of lowcost 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 interdependence vs. independence when it comes to energy is geopolitical considerations. Assuming that independence is possible, America would arguably have fewer con-
cerns about what happens overseas, but would have a smaller impact on foreign affairs. The current situation involving Russia’s invasion of the Ukraine is a perfect example. 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 particularly reliant on Russian energy, many European nations are. Having the ability and laws in place to export American energy – 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, American 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 because 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 continuation of the boom in domestic energy production which will in turn result in additional tax revenues, more jobs, and greater on-shoring of various energy-efficient manufacturing in order to take advantage of the new energy bounty. In other words, taking care of a few misguided federal policies could unleash an American economic boom of untold proportions. It’s time to free American energy!
www.basinresourcesusa.com •SUMMER 2014
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50 BASIN RESOURCES
Praxair exPands Gov. Susana Martinez visits Kirtland plant Debra Mayeux Basin Resources Praxair, a Fortune 250 company, completed its new Kirtland-based gas plant in January and announced its plans for the region during a Feb. 27 visit to the facility by Gov. Susana Martinez. “Praxair is pleased to be expanding operations 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 industries, 31 indirect jobs in supplier industries and 46 induced jobs based on the indirect job creation, according to Thomas Kevin Swift, the chief economic and managing 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
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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 environment 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 nitrogen that is being supplied to local pipeline customers. The gases Praxair produces are used for a wide variety of applications 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 positions 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 expand its presence in New Mexico because of the state’s welcoming 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 regulatory climate.” SUMMER 2014 • www.basinresourcesusa.com
52 BASIN RESOURCES
Desk and Derrick
continued from 32
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 president, vice president and president. Bea Saavedra, administrative assistant to the San Juan Business 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-
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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 knowledge 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 division. “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 companies,” 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 actively employed in, affiliated with, or retired from the petroleum, 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.
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Pyramid purchases Tarpon Energy Merger allows for expanded services in San Juan Basin Debra Mayeux Basin Resources PTW energy Services Limited, a privately owned company based in Nisku, alberta, Canada, will expand its services in the San Juan basin with Pyramid Corporation’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 operations in markets across key oil and gas basins in the u.S., Canada, Southeast asia and the Middle east,” said Don basnett, president and CeO of PTW. The transaction, finalized on april 16, will make PTW one of the largest electrical and instrumentation providers in North america. PTW will have the capability 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 sectors in North america and internationally, basnett said. “In addition, combining Pyramid, Tarpon, Warwick and Kent’s modular solutions, structural fabrication and design expertise will constitute a strong, full-service building solutions offering,” basnett said. “Supported by various investors, the organization is well-financed and poised to continue the high level of solid management 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
“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
PTW and its clients with regard to the range of services provided, said Kyle Wolff, manager for Farmington area operations. “This merger will allow Pyramid’s numbers to grow and pull from a larger collective and will create a range of experienced and a different caliber of personnel reflected back to our clientele,” Wolff said. Prior to the merger, Pyramid and Tarpon were competing for the same contracts. 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 energy 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 contracts. 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 integration of operations. Pyramid has a history of providing service and product to
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BASIN RESOURCES 55 industry within the U.S. and Western Canada. “Our firm offers a broad range of services, including electrical-instrumentation maintenance and construction and control panel manufacturing,” Basnett said. “We maintain a state-of-the-art facility which houses a fully certified process equipment fabricator and compression package manufacturer. Both offer in-house product design and strictly adhere to a comprehensive QA/QC program.” Pyramid also operated two instrumentation repair and distribution companies. Pyramid historically has supported a network of offices, with each strategically located to offer “complete maintenance, construction and material procurement services to our clients in the petroleum, petrotechnical, mining, wood products, agricultural and industrial sectors,” Basnett said.
Pyramid’s corporate committment has been to be the electrical and instrumentation industry leader, while adapting to a changing technical environment. Its objectives included safety, customer satisfaction, 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 possible service to all our clients,” Basnett said. PTW will focus its operating manner in a way to allow for a seamless transition for employees and customers once the transaction closes in April. The closing will be based on third-party approvals from the Canadian Competition Bureau and the Tarpon shareholders. Under the new umbrella corporation, Basnett will remain as president and
SUMMER 2014 • www.basinresourcesusa.com
CEO of PTW and Pyramid. Upon closing, 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 president 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 transaction, as it is a win-win for all parties involved,” 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 dedication of its employees.”
56 BASIN RESOURCES
USDA invests in renewable energy, biofuels for rural New Mexico DeBrA MAyeUx Basin Resources The U.S. Department of Agriculture recently placed an emphasis on helping develop 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, according to Terry Bruner, state rural development 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 America 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 office buildings, the conversion of diesel to electric water pumps on ranches and the development of biofuel businesses within the state. One such business was rio Valley Biofuels, LLC, in Anthony, which received $2,613 in this round of funding from the advanced
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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
* Biofuels 60
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to eligible producers based on the amount of advanced biofuels produced from renewable biomass other than corn kernel starch. examples of eligible feedstocks include crop residue, animal, food and yard waste, vegetable 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
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58 BASIN RESOURCES
School of Energy classes long distance SJC online courses lead Vann to Associate in Occupational Safety degree 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 industry. 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 improve his talents in the area of safety. he has taken the time to become certified in accordance 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 degree, and the texas A&M Engineering Extension service, or tEEX, recommended he take online classes through the san Juan College school of Energy. tEEX is an internationally recognized leader in the delivery of emergency response, homeland security
Zachary Vann
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 recognizes the academic achievement of two-year
college students. the classes, that important degree, and those distinctions didn’t come without sacrifice, 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 traveling. Although obtaining a degree solely online 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 averaged 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 traditional classroom and the give and take of
www.basinresourcesusa.com • SUMMER 2014
BASIN RESOURCES 59 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 College – 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 cannot visit San Juan College to obtain assistance, 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 aspects of getting their certificates and degrees,” 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 Engineering Extension Service, with which San Juan College has an agreement to transfer in its Certified Safety & Health Official for college 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 students outside of San Juan County and New Mexico and obtain their degree from our institution 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
SUMMER 2014 • www.basinresourcesusa.com
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 diligence 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
60 BASIN RESOURCES
Biofuels
will be present with his family at graduation ceremonies,” she said. “All I can say is ‘Job well done, Zachary!’” Vann will continue his education at Eastern Kentucky 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 degree, 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, camping and that all-important family time. His determination 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!”
continued from 56
Administration’s commitment to support an ‘all-of-the-above’ energy strategy and to help create jobs,” Agriculture Deputy Under Secretary Doug O’Brien said. “Producing advanced biofuels is a major component of the effort to take control of America’s energy future by developing domestic, renewable energy sources.” Through this program and others at USDA, the department is working to support the research, investment and infrastructure necessary to build a robust and lasting biofuels industry that creates 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 gallons of advanced biofuel and the equivalent of more than 40 billion kilowatt hours of electric energy. Bruner added that biofuel production 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 – especially those traditional New Mexico products that are a source of pride for our state,” Bruner said. “It means partnering with rural community to improve essential infrastructure improvements in water, sewer, telecommunications, electric service and housing. It means seeing past traditional boundaries to harness the strength of multiple rural communities to create stronger regional economies.”
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BASIN RESOURCES 61
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Financial questions seen for U.S. shale gas, tight-oil plays Financial problems of operators in U.S. shale gas and tight oil plays might hold production growth below current expectations, according to the author of a March comment 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 London. The producing industry has demonstrated it can create opportunities, innovate operationally, and address environmental issues despite evolving government policies and questions of public acceptance, Sandrea writes. “What is not clear from higher-level company data is if the industry (both large players 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 approaching $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 becoming negative as debt rises. Other financial 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
SUMMER 2014 • www.basinresourcesusa.com
a full-cycle risk-adjusted return.” Some operators see that point as still five years away. Meanwhile, the industry will remain challenged. Sandrea says “above-ground reasons” include the need to constantly acquire and drill leases, infrastructure needs, transportation costs, increasing costs to manage environmental considerations as operations grow, and “the fact that drilling and hydraulic fracturing costs respond to fluctuations in gas and oil prices as well as demand, leaving little excess profit for long.” Below ground, he says, rapid production declines and low recovery rates, despite
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
Waste Management
Named World’s Most Ethical Company for 2014
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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 behavior, 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 recognizes our company’s efforts in transforming the waste industry 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 industry 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 develop strategies to extract value from the waste stream to minimize our environmental impact, while at the same time demonstrating a culture where safety and ethics are core beliefs.” The World’s Most Ethical Company assessment is based upon the Ethisphere Institute’s Ethics Quotient framework, which
* Waste Management 65
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BASIN RESOURCES 63
BLM to examine steps to reduce methane from mining operations on public lands WASHINGTON, D.C. – As part of President Obama’s recently released Strategy to Cut Methane Emissions, a component of the Climate Action Plan, the Bureau of Land Management (BLM) today announced that it is seeking public comment 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 environment,” said BLM Director Neil Kornze. “We will work with federal, state and local officials as well as with industry and non-
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governmental organizations to explore ways to responsibly reduce methane emissions.” The BLM published in the Federal Register an Advance Notice of Proposed Rulemaking (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 result of mining operations is known as waste mine methane. The authority for the BLM to address the capture, use, or destruction of waste mine methane across 700 million acres of Federal mineral estate
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comes from the Mineral Leasing Act. When released into the mining environment, waste mine methane can pose a significant 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 develop a comprehensive, interagency strategy 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
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BASIN RESOURCES 65 actions and common-sense standards. 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-strategy-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 increased. 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.
Waste Management
continued from 62
was developed to provide a means to assess an organization’s performance in an objective, consistent and standardized way. The information collected provides a comprehensive sampling of definitive criteria or core competencies, rather than all aspects of corporate governance, risk, sustainability, compliance and ethics. “The entire community of the World’s Most Ethical Companies believe that customers, employees, investors and regulators place a high premium on trust, and that ethics and good governance are key in earning it,” said Timothy Erlich, CEO for Ethisphere. “Waste Management joins an exclusive community committed to driving performance through leading business practices. We congratulate everyone at Waste Management for this extraordinary achievement.” Waste Management, based in Houston, Texas, is a leading provider of comprehensive waste management services throughout North America.
I N - H O M E S O LU T I O N S F O R S E N I O R S A N D FA M I L I E S
Missing work to care for your loved one? Injured on the job?
PALS can help! Companionship Home cooked meals Light housekeeping Errands/Transportation - Grocery Shopping - Doctor Appointments - Hair Appointments & more Philips Lifeline Medical Alert Service Philips Medication Dispensing Service
PA LS
2-24 hour Care Live-in Service Respite Care or Family Relief Dementia/Alzheimers Care Individualized Care Personal Care - Toileting - Bathing - Transferring End of Life Care
P artners A ssisted L iving S ervices 505-325-9600
313 N. Locke Ave. • Farmington • www.partnersassistedliving.com SUMMER 2014 • www.basinresourcesusa.com
66 BasiN resoUrces Allstate ......................................................26 Viviana Aguirre 900 Sullivan Ave., 505-327-4888 B J Brown 3030 E Main St., Ste X9, 505-324-0480 Kelly J. Berhost 1415 W. Aztec Blvd, Ste. 9, Aztec, NM 505-334-6177 Harold Chacon 8205 Spain Rd. NE, Suite 209 C Albuquerque, NM 505-296-2752 Dennis McDaniel, 505-328-0486 Matt Lamoreux 4100 E. Main St., 505-599-9047 Johnnie Pete 817 W. Broadway, Ste. B, 505-325-0297 Silvia Ramos 2400 E. 30th St., 505-327-9667 Animas Environmental Services.....................9 Farmington, NM 505-564-2281 Durango, CO 970-403-3084 www.animasenvironmental.com Animas Valley Insurance ...............................7 2890 Pinon Frontage Rd. Farmington, NM 505-327-4441 www.aviagency.com Antelope Sales & Service Inc.......................49 5637 US Hwy 64 Farmington, NM 505-327-0918 www.NMASSI.com Armstrong Coury Insurance.........................37 424 E. Main Farmington, NM 505-327-5077 www.armstrongcouryinsurance.com Bailey’s Welding.........................................43 6175 Hwy 64 Bloomfield, NM 505-632-3739 Big Red Tool, Inc. .......................................17 2010 San Juan Blvd. Farmington, NM 505-325-5045 Brady Trucking, Inc.....................................68 5130 S. 5400 E Vernal, UT 84078 435-781-1569 Farmington, NM Division 505-598-5580 Grand Junction, CO Division 970-263-8791 Williston, ND Division 701-572-1522
advertisers directory
Crossfire, LLC .............................................35 PO Box 339 Ignacio, CO 970-884-4869 www.crossfire-llc.com Dirt Bandits................................................64 101 E. Pinon Farmington, NM 505-326-0111 www.dirt-bandit.com Edward Jones/Dennis Gross ........................24 2713 E. 20th Farmington, NM 505-325-5938 www.edwardjones.com Elite Promotional & Embroidery ..................62 1013 Schofield Farmington, NM 505-326-1710
Largo Tank.................................................52 505-327-6281 www.largotank.com Mechanical Solutions, Inc..............................2 1910 Rustic Place Farmington, NM 505-327-1132 Mesa West Directional.................................58 505-402-8944 www.mesawestdirectional.com
Encana.......................................................32 www.encana.com/sanjuan Energy Pump & Supply ...............................43 2010 Troy King Rd. Farmington, NM 505-564-2874
Miller & Sons Trucking ................................53 1110 W. Sategna Ln. Bloomfield NM 87413 505-632-8041 www.powerinnovations.com
Farmington Fire Equipment ........................25 6007 E. Main Farmington, NM 505-327-1933 www.f-fire.com
New Image Powder Coating.........................38 2792 Inland Street Farmington, NM 505-326-2797
Four Corners Community Bank ....................47 505-327-3222 New Mexico 970-565-2779 Colorado www.TheBankForMe.com
Odessa Pumps ...........................................31 940 Hwy 516 Flora Vista, NM 505-334-1330
Four Corners Oil & Gas Conference..............37 505-325-0279 505-258-1748 www.fourcornersoilandgas.com
Oil & Gas Equipment Corp. ..........................14 8 CR 350 Flora Vista, NM 505-333-2300 www.ogequip.com
Foutz Hanon ..............................................42 2401 San Juan Blvd. Farmington, NM 505-326-6644
Parkers Office Products ..............................39 Farmington, NM 505-325-8852 www.parkersinc.com
Global Communication Solutions..................30 505-325-6098 1-888-456-2238 service@globalcommunicationssolutions.net
Partners Assisted Living .............................65 313 N. Locke Ave. Farmington, NM 505-325-9600 www.partnersassistedliving.com
Halliburton.................................................20 www.halliburton.com Hands on Safety Service.............................56 1901 E. 20th St. Farmington, NM 505-325-4218 Henry Production .......................................21 3440 Morningstar Dr. Farmington, NM 505-327-0422
Cascade Bottled Water & Coffee Service ................................25 & 38 214 S. Fairview Farmington, NM 505-325-1859 • 800-416-1859
Highlands University ..................................41 505-454-3004 nmhu.edu/energy
Corrpro......................................................51 3900 Monroe Rd. Farmington, NM 505-325-1946 www.corrpro.com
Kozi Homes..................................................5 505-327-9008
Metal Depot ...............................................55 2001 San Juan Blvd. Farmington, NM 505-564-8077 www.metaldepots.com
Calder Services ..........................................48 #7 RD 5859 Farmington, NM 505-325-8771
City of Farmington .....................................27 1300 W. Navajo St. Farmington, NM 505-599-1395 www.IflyFarmington.com
Kelco, Inc. ..................................................45 515 E. Animas St. Farmington, NM 505-325-6372
IEI Industrial Ecosystems ............................59 49 CR 3150 Aztec, NM 505-632-1782 www.industrialecosystems.com Inland Kenworth .........................................44 3924 Bloomfield Hwy. Farmington, NM 505-327-0200 www.inland-groups.com www.kenworth.com
Patriot Technologies.....................................3 3920 Monroe Road, Suite A Farmington, NM 505-325-4747 Premier NDT Services .................................23 505-325-1407 www.premierndt.com Pumps and Service.....................................21 505-327-6128 www.pumpsandservice.com Pyramid .....................................................26 1-866-955-HIRE QuickLane Tire & Auto Center......................60 5700 East Main St. Farmington, NM 505-566-4729 Reliance Medical Group...............................19 3751 N. Butler Ave. Farmington, NM 505-324-1255 Occupation Medicine 505-324-1255 Urgent Care 1409 Aztec Blvd. Aztec, NM 505-334-1772 www.reliancemedicalgroup.com
Rush Truck Centers of New Mexico......13 & 57 6521 Hanover Road N.W. Albuquerque, NM 87121 505-875-3410 www.rushtruckcenters.com San Juan Casing Service..............................36 6101 E. Main St. Farmington, NM 505-325-5835 San Juan College School of Energy..............18 800 S. Hutton Farmington, NM 505-327-5705 www.sanjuancollege.edu San Juan United Way...................................63 505-326-1195 www.sjunitedway.org Serious Texas BBQ......................................28 3475 E. Main St. Farmington, NM 505-327-9889 506 Broadway Blvd. 505-333.6227 www.serioustexasbbq.com Southwest Concrete Supply.........................33 2420 E. Main Farmington, NM 505-325-2333 www.southwestconcretesupply.com The Spare Rib ............................................52 1700 E. Main Farmington, NM 505-325-4800 www.spareribbbq.com Twin Stars, LTD...........................................67 100 Iowa Ave. Bloomfield, NM 505-632-9202 7169 Roswell Hwy. 575-746-6690 Sunray Casino ............................................48 Farmington, NM 505-566-1200 TJs Diner....................................................15 119 E. Main St. Farmington, NM Treadworks ................................................31 4227 E. Main St. Farmington, NM 505-327-0286 4215 Hwy. 64 Kirtland, NM 505-598-1055 www.treadworks.com Uncle Bob’s Auto & Truck ...........................20 3995 Cliffside Dr. Farmington, NM 505-436-2994 U.S. New Mexico Federal Credit Union..........15 3024 E. Main St. Farmington, NM 505-599-3610 usnmfcu.org Ziems Ford Corners ....................................18 5700 East Main Farmington, NM 505-325-8826
www.basinresourcesusa.com •sUMMer 2014
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