Oil Drilling Pads In Permian

Flying low over the Permian Basin to look directly in the eye of the latest and perhaps most profound chapter in New Mexican history, it is the vastness of the oil fields that leave you awestruck. Inevitably an emotional chord is also struck. The realization, held until then in the abstract, is now crystallized. What lies below has the power to literally transform this state from being perennially last in the nation in a basket of vital social standings to a stand-out state where poverty is finally shoved into the back seat and where opportunity is a neighbor not a stranger.

The Permian, mostly in Texas but crossing the border into SE NM and especially southern Eddy County, is now the largest oil producer on the planet. Staring down at the immensity of this enterprise I thought, "Okay, now I really get it. This is how you get billion dollar state budget surpluses."

Coincidence made the awareness even more keen. Just as our group took flight Friday from the Carlsbad terminal Exxon dropped its second quarter earnings. In just those three months the company earned $3.1 billion, a good portion of which came from the Permian.

"It's a wild ride," longtime Carlsbad Mayor Dale Janway told me. "Exxon recently held a Board of Directors meeting here. Who would have thought?"

NAVIGATING THE BOOM

Carlsbad, a half hour drive from the fields, is at ground zero for the NM portion of the boom as is Hobbs. 2018 estimates put its population at 29,000, the largest in history. But Janway says local water usage indicates it is much higher.

The tight-knit community and its political leadership is not unlike a juggler with a dozen plates in the air, trying to keep them spinning and not crashing to the ground.

On the plus side, the job market is so robust a Taco Bell is already offering the $15 an hour wage being sought as the federal minimum by many Democrats. Some restaurants have had to abbreviate their hours because potential employees have been lured to the Permian. Truck drivers there can earn well north of $30 an hour.

Even the little guy is getting in on the act. A food truck belonging to the Chubby Burrito chain parked on one of the busy oil field roadways alerts potential customers that they accept debit cards, credit cards as well as cash.

The Carlsbad leaders we spoke with took to heart that simplistic notion that "it takes money to make money.” It is playing out before them in ways never seen in NM and it has them looking through the lens of opportunity, not the poverty mentality that has been a state mainstay.

Again, that's different from the past. Uncertainty remains part of the picture but fear of failure has been replaced with the fear of missing out. As Eddy County Commissioner Susan Crockett said over lunch at the Carlsbad Country Club:

What worries me is that we do not provide the proper infrastructure--the roads, the housing the education and other necessities and amenities, We could end up keeping the oil but the people move across the border to Pecos, TX.

GOP state Senator Gregg Fulfer of Jal, an energy industry veteran, frets over possible regulatory overreach, citing a bill introduced at the last legislative session to slap a statewide moratorium on fracking because of environmental concerns. The bill went nowhere but he said "it sent a shudder" through the industry.

ENVIRO IMPACT

We asked the BLM officials about the environmental aspect of the boom. They report that the land that the drilling pads are on is eventually reclaimed and restored to its original condition. The huge amounts of wastewater created by the the fracking process is not a major problem especially now that new state regulations encourage recycling. A cottage industry valued in the billions has popped up to handle the recycling.

There is work to be done on methane and natural gas flares that contribute to climate change. The MLG administration is working on new rules and the oil industry is not resisting. We did not meet any climate change deniers during our visit.

A PRAGMATIC VIEW

Some of our readers come at this boom from the perspective of climate, saying that encouraging oil and gas production is inherently wrong because of the climate crisis caused by fossil fuels. We come at it from a pragmatic view, that the Permian oil boom is here for the foreseeable future. It is not a moral failing to advocate for having the resulting monies put to work to reverse our high rate of poverty and our very low child well-being ranking. In other words, to change the course of state history.

DAREDEVIL ROADS

Many of you have heard about what amounts to an emergency on state roads in and out of the Permian. Their rapid deterioration from heavy use and the unsafe driving sparked by the oil field frenzy have led to a dramatic escalation in fatalities--at least several each week. When I asked anyone in Carlsbad about the boom it was always among the top concerns.

Carlsbad "Man Camp"

One afternoon Carlsbad banker Jay Jenkins and I braved some of the worst stretches. We cruised in his SUV absorbing shocks from the washboard like roads also riddled with potholes. It wasn’t long before an 18 wheeler that meant business came barreling down a narrow two lane unstriped roadway. Much of the lanes were chipped away leaving it more like one and a half lanes. No problem for that trucker. He created a wider lane out of the dirt berm, forcing a third of his trailer onto it as Jenkins jerked to the right to make more way for him and to ensure the oil patch did not become our final resting place.

Sen. Sanchez
Welcome back. If you didn't catch our special weekend coverage of the Saturday GOP preprimary convention just scroll down for our report. The key points? Will GOP Senate candidate Greg Sowards spend much of the $600,000 he has banked now that Heather Wilson cleaned his clock at the convention?

Janice Arnold-Jones now takes the front-runner position away from Dan Lewis after scoring a big convention win, but she has to raise money to match the convention performance if she is going to keep it. Now it's on to a new week and the fresh action....

Valencia County GOP State Rep. David Chavez is turning out to be one of the more surreal characters of  La Politica. First, he says he will not seek a second term in the House because serving in Santa Fe is cramping his ability to make money in his private law practice. Then he immediately turns around and announces that he is going to take on Senate Majority Leader Michael Sanchez. What? You won't lose money in your biz when your a Senator, David? Seems he has some 'splanin to do to those House constituents he is abandoning. He told them only this month:

I have to dedicate myself to my practice and my clients. I am extraordinarily busy and have obligations to my clients.

What happened here, according to the top sources in state politics, is that Susana PAC, led by Guv chief political adviser Jay McCleskey, has been urgently trying to field an opponent against Sanchez who Martinez sees as enemy #1 in thwarting her legislative agenda. But they couldn't find anyone. With the March 20 deadline rapidly approaching, Jay seized upon Chavez's decision to abandon his House seat and persuaded him to make the run against Sanchez (Chavez previously ran and lost against Sanchez back in 2000).

Chavez will have a very tough time taking Sanchez out because of the way he is leaving his House seat and because of his own political baggage--both public and personal. But the point doesn't seem to be to take the seat, but to make sure that Susana PAC and other interested Sanchez foes can launch vigorous attacks against Sanchez and make him spend time and money defending himself.  On the other hand, the more motivated you get Leader Sanchez the harder he will work to get supporters to the polls--supporters who will also vote for President Obama, and the Democratic nominee for US Senate. That's not an unimportant point as Valencia County is a key swing county. But satisfying Susana's longing for payback seems paramount--even if the end result is only emotional  satisfaction--not any impact on how the state is actually led.

OBAMA TO NM

President Obama wings into New Mexico Wednesday, but he won't be visiting any of the state's three metro areas--ABQ, Santa Fe or Las Cruces. Instead he will set down in Carlsbad  in SE NM for what locals say is the first ever presidential visit there. He will visit oil and gas fields located on federal lands near Carlsbad to highlight his "all of the above" energy policy. But the visit also marks Obama's entry into the 2012 presidential fray here.

In 2008 Obama did not carry Eddy County where Carlsbad is located. He lost to McCain who captured 62% of the vote there. He will likely lose it again, despite it having registration numbers that favor the Dems. But those are mostly "Little Texas" Dems who routinely vote R. Still, if Obama can maintain his '08 pace in the region and carry the state's metros as he did four years ago, he will be in good shape for his re-elect here.

New Mexico can still be called a "swing" state, but it just doesn't look as "swingy." Obama carried Bernalillo County (basically Albuquerque) in 2008 by a previously unimaginable 59,000 votes. Say that victory margin is trimmed by half. That would still give him a 30,000 vote cushion as the R's try to make up the margin in the south and the traditionally Democratic north.

This is Obama's first visit to the state since September 2010 when he campaigned for unsuccessful Dem Guv candidate Diane Denish. On a swing west earlier this year, he bypassed New Mexico.

There is a great deal of ambivalence over Obama, but he is blessed by an opposition that so far has proven itself too far to the right to present a serious threat to him here. However, likely GOP nominee Mitt Romney has shown, that like Obama, he can perform in the cities. That's something for the R's to hang their hats on. But the President usually retains good popularity (it can wax and wane) with the growing ranks of Hispanic voters (Native Americans,  too) and getting them out to vote will cinch it for him.

With the cities looking solid, Obama's Carlsbad visit is a reminder that in order for him to lose the state's five electoral votes, the GOP must deliver blockbuster results in the south. Any chipping away by Obama in counties like Eddy poisons their well. That's not the official reason for Obama visiting Carlsbad Wednesday, but it does play into that particular narrative.

EVER HAPPEN?

Martha Mauritson, the managing editor of the Carlsbad Current-Argus, writes:

The official Carlsbad historian, a wonderful man named Jed Howard, says no sitting presidents before Obama have visited Carlsbad. The Democratic presidential candidate in 1896, 1900 and 1908--William Jennings Bryan--was here a couple of times, but that's about it.

Obama will be traveling to a section of our state that has been spared the worst of the lengthy recession. In fact, it has thrived. Energy rich Eddy County sports an unemployment rate of only 4 percent. That's basically full employment as the oil and gas industry prospers, along with the potash mines. There were recent layoffs at WIPP--the federally operated low level nuclear waste site--but there does not appear to be a long-term threat to its funding.

No president before Obama has visited Carlsbad, but that doesn't mean previous White House occupants were not aware of it. That's because of the world-renowned Carlsbad Caverns. President Coolidge, in 1923, signed a proclamation establishing Carlsbad Cave National Monument. In 1930, the Congress established Carlsbad Caverns National Park and in 1978 Carlsbad Caverns Wilderness was established with the signature of President Carter. The awe-inspiring caves are a must-see for visitors and state residents alike.

GOP RURAL PROBLEM

The Republican (and conservative) demographic problem in New Mexico is well illustrated by a glance at the population stats for Eddy County and the city of Carlsbad. In 2000, Eddy had a population of 51,000. By 2010, the census says that number had grown to only 53,800. For Carlsbad, the 2000 population was 25,625 and only slightly higher at 26,138 in 2010. Small town and rural voters are an ever shrinking part of the state population pie. Carlsbad is actually in pretty good shape compared to other towns around the east side. The area lost a state Senate seat in the recent legislative redistricting because of sinking population.

The irony here is that Eddy and surrounding counties provide a huge portion of state revenues from energy royalties that keep state government running.

WE'RE BLEEDING

We have continuing economic and business coverage around here that you won't get anywhere else. And that leads us to the catacombs of the NM Workforce Department and the latest on the state jobless rate. This official spin from a department newsletter is actually no spin at all, but the raw truth we've been reporting during this long economic malaise. The unemployment rate in the state continues to drop, not because of "job creators" adding jobs, but mostly because the state work force is shrinking. From the state's Labor Market Review:

New Mexico's seasonally adjusted unemployment rate was 7.0 percent in January 2012, unchanged from December but down from 7.7 percent a year earlier...The statewide unemployment rate for January 2012 was down a full percentage point from its recessionary peak, but much of the decline resulted from a shrinking labor force participation rate with many individuals previously classified as unemployed no longer counted as such. Labor force participation can decrease because of both cyclical (e.g., an increase in worker discouragement) and structural (e.g., an increase in worker retirement) factors.

This Great Recession has permanently sidelined thousands of New Mexicans. Many of them are simply drifting away.

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Not for reproduction without permission of the author

Welcome back. Here's the latest from the campaign trail.

Both Republican Steve Pearce and Democrat Michelle Lujan Grisham say they're ready to start spending on everything from education to infrastructure. And veterans of La Politica say they both may have have it right.

They cite the recent energy summit hosted by Carlsbad Mayor Dale Janeway where experts said the oil boom that's creating an immense surplus in the state budget (projected at $1.2 billion for the year that starts July 1) is not a one time deal. In fact. NM Oil and Gas Association chief Ryan Flynn says this party is just beginning:

“We have more rigs in New Mexico than we ever have,” he said. “We don’t just expect this growth to continue next year, but for the next five years. This is sustained growth.” He also touted one third of the State’s revenue from oil and gas, while the industry employs about 100,000 New Mexicans.

The austerity hawks rightfully point out that the oil boom is bound to disappear like previous ones and are urging massive reserves be socked away to protect the state against a downturn. But if Flynn is right there is something more optimistic to ponder: How does the state handle billions of unanticipated revenue should it come in during the next Governor's term?

If the cash continues to cascade into the coffers not only could Santa Fe fund the state's reserves beyond what even the most conservative lawmakers desire but also resolve long-term problems like the state's pension shortfall; it's chronic underfunding of the judiciary; fully funding education to respond to a court ruling that the current formula is unconstitutional and discriminates against children at risk and give healthy raises to state employees and teachers who have received few during our decade long stubborn stagnation.

Perhaps this is the question for the Guv candidates:

What are your plans if the state continues to accumulate billions from the oil boom? How would you effectively invest that money to reverse the state's standings at the bottom of all major quality of life lists?

OIL VILLIANS?

It's interesting that it is the oil and gas industry and Pearce's ties to it that are the main targets of the Dem special interest TV ads in the Guv race. The oil boys never lead the popularity pack, but with their industry flooding Santa Fe with so much treasure will the public respond to their portrayal as the villain? This is not going unnoticed by Pearce supporters like reader Ron Nelson:

So, the Dems are criticizing Pearce’s connection to gas and oil? The very same industry that is flooding our state coffers with a billion plus surplus for them to squander. Meanwhile MLG and Sen. Heinrich are pushing huge solar and wind farms that will mar NM’s vistas, so they can sell energy to our neighbors. So much for access to public lands.

The ads against oil may help MLG get the progressives back in line but given the current backdrop of an epic oil boom their effectiveness with the broader electorate is questionable.

BOOM AND BUST

Okay, before we permanently join the glass-is-always-half-full crowd, let's take a look at what could put Flynn's prediction of a long oil boom quickly to rest. Some clues:

. . . The public markets have been valuing fracking companies not based on a multiple of profits, the standard way of valuing a company, but rather according to a multiple of the acreage a company owns. As long as companies are able to sell stock to the public or sell themselves to companies that are already public, everyone in the chain, from the private equity funders to the executives, can continue making money. 

It’s all a bit reminiscent of the dot-com bubble of the late 1990s, when internet companies were valued on the number of eyeballs they attracted, not on the profits. . .  As long as investors were willing to believe that profits were coming, it all worked — until it didn’t. . . Most things that are economically unsustainable, from money-losing dot-coms to subprime mortgages, eventually come to a bitter end.

Meanwhile, the Hilton Garden Inn in Hobbs, in the middle of the Permian Basin oil boom in the SE, will set you back a cool $360 a night. Bust? What bust? Party on, Garth.

ARNOLD JONES MISHAP

They call her Lady Sunshine because of her long record of pursuing government transparency but ABQ GOP congressional contender Janice Arnold-Jones stepped into a black hole last week when she appeared to question the heritage of Dem foe and Native American Deb Haaland.

It's a hole that may be nearly impossible to climb out of considering that even before her remarks on Fox and Friends (video here) the GOP nominee was the decided underdog, with DC pundits declaring the seat "Safe Democratic." She said:

“There’s no doubt that her lineage is Laguna (Pueblo), but she is a military brat, just like I am.” Arnold-Jones went on to suggest that Haaland’s mention of her Native American background on the campaign trail “evokes images that she was raised on a reservation.”

That indelicate phrasing was seized upon by a wide range of Dems who lambasted the Republican hopeful in a series of news releases. Arnold-Jones stood her ground and insisted she was simply dealing in facts not in racial bias.

DEBATE UPDATE

Speaking of Fox, it will be FOX NM on channel 2 in ABQ/ Santa Fe that will broadcast  the first televised gubernatorial debate at 6 p.m. September 19, not its sister station KRQE-TV 13. We were given incorrect information by a station staffer when we blogged that the debate would be on 13. The Fox face-off, however, will be moderated by a KRQE staffer and will last one hour. Our original point holds--the first broadcast TV debate is usually the most important one and will help set the tone for the final weeks of the campaign.

LUNDSTROM VS UNM 

Former ABQ GOP State Rep. Joe Thompson and other big name Santa Fe Fe lobbyists for UNM are going to have their hands full come the legislative session in January. That's because a name that's become big at the capitol has gone public with what appears to be an all-out war with the UNM Regents.

You probably heard that Dem State Rep. Patty Lundstrom, who recently took over as chair of the powerful House Appropriations Committee, is hopping mad over the way the UMM Regents treated her when she opposed cutting sports programs from the athletic budget. Peace is still not in sight as Lundstrom hits UNM hard in this op-ed:

Perhaps we should be calling for a different kind of leadership within the UNM Board of Regents – leadership that maintains humility and transparency, embraces diversity of opinion and remains flexible in the face of uncertainty.

Where is UNM President Garnett Stokes? Part of leading the university is to smooth the feathers of ruffled legislators. Sometimes it takes more than the lobbyists. How this all plays out in the appropriations process is the key question. If Lundstrom can't be pacified Lobo Louis may have to be put on a diet.

THE BOTTOM LINES

The city of Santa Fe has a much larger population than the 70,000 we had it at in a recent report. We based that on the city's official website but the actual population, according to the US Census Bureau estimates from 2017, is about 84,000. In any event many of them were celebrating the annual Fiesta this weekend, but as the NYT reports with a very major change. It's the end of the Entrada:

New Mexico Grapples With Its Version of Confederate Tributes: A Celebration of Spanish Conquest

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(c)NM POLITICS WITH JOE MONAHAN 2018

Judith Nakamura

With the price tag for the winning candidate in the '22 gubernatorial race hitting $12 million, there is pressure on those hoping to take over the top floor of the storied Roundhouse in '26 to giddy up and throw their hats into the ring.

The Dems are off to a fast start with Secretary of Interior Deb Haaland ready to make a formal entry this spring and Sen. Martin Heinrich expected to also announce a decision in the months ahead, 

And the Republicans are looking more alive this new year than last. We count at least five possible and credible GOP contenders for the minority party's Guv nomination.  

They are: 

Rio Rancho Mayor Gregg Hull, state Senator Crystal Brantley, retired Supreme Court Justice Judith Nakamura, state Rep. Rebecca Dow and '24 GOP US Senate nominee Nella Domenici.

None of those potential candidates or any others has made a formal entry into the race. 

Hull and Nakamura are newcomers to the list of possibles. Both have proven appeal to Democrats from their previous campaigns.  

JUDGE JUDY 

Nakamura, 64, won election to the Supreme Court in 2016 by beating out challenger Michael Vigil by 391,000 votes to 361,000 (52% to 48%). Nakamura was the first Republican woman elected to the Court in the state history and the first Republican since 1980.

She also has a good history in Bernalillo County, the state's largest and a deciding factor in state elections. She was elected as a Metropolitan Court Judge and District Court Judge. 

In that statewide Supreme Court contest against Vigil, she bested him 55 to 45 percent in big BernCo, a crowning achievement and one her backers say could propel her forward in the '26 Guv contest. 

THE MAYOR

Mayor Hull has an impressive track record in the City of Vision, a Republican-leaning suburb of ABQ with a population of of some 113,000.

Hull was elected as mayor in April 2014 via a runoff election to a four-year term. He was re-elected in March 2018 to a four-year term.  In March 2022, Hull was re-elected to his third, four-year term. Rio Rancho Governing Body members are elected in non-partisan elections.

The population boom has cooled a bit in Rio Rancho while the business climate has improved drastically under Hull. The issue of city residents spending most of their money in ABQ is largely in the rear-view mirror with businesses of all stripes now making their home in the city known for its low crime rate and good public schools. 

With Hull or Nakamura the Republicans could at least knock on the door of BernCo and get someone to answer. 

Gov. Lujan Grisham punished Republican Mark Ronchetti here in '22, posting a 58 to 41 percent victory. That was 144,000 for MLG and 99,000 for Ronchetti, a margin of 45,000, a deficit nearly impossible for a GOP candidate to make up in a race that drew 713,000 voters. MLG won the state by 6.38 percent. 

THE RIGHT MIX?

Some analysts point out that none of the five possible GOP hopefuls is Hispanic even though the last three Governors have been. They also mull about Hull being the only man in the group. After what will be 16 years of female governors next year, the electorate might want to mix it up. 

Still, Hull and Nakamura have the gravitas to carry the GOP banner and perhaps a smidgen more hope of pulling off an upset since since the November election. Trump's loss to Kamala Harris was an even six points, a bit better than the '22 GOP Guv candidate and the best GOP presidential showing since 2004. 

And results indicate some of those Trump votes came from dissatisfied Hispanic Democratic men in the northern counties and elsewhere. 

THE OTHERS

Brantley and Dow are also no lightweights but Dow could not win the '22 GOP Guv nomination when she ran and Brantley has never run statewide. Domenici has run statewide but lost by ten points--55 to 45--to Heinrich. That size of a loss does not give her any foot up for the nomination. However, she does have a personal fortune to deploy, if she chooses, so she will be closely watched by potential rivals.

Finally, while Hull and Nakamura and Domenci have established some moderate GOP credentials, they would be challenged in this blue state on abortion, crime and climate and last but not least the Trump presidency. 

That is no easy needle to thread. Whoever ends up winning the GOP gubernatorial nomination will need the steadiest of hands.

MAYOR JANWAY 

From our perch Dale Janway was one of the best small city mayors in New Mexico. He ably and obsessively supervised the Cave City for three terms ending in January of 2024.

Janway, 80, died of a heart condition December 28.

Carlsbad may be a small city but the issues don't get any bigger than during Janway's time at the helm. The Permian Basin oil boom jammed the town and surrounding environs with thousands of oil workers, creating an epic housing shortage and decimating roadways while boosting the city's coffers with treasure generated from the oil fields.

We experienced that first-hand when touring the area with Janway for an in-depth blog report in 2019 that was one of our most well-received, thanks to Janway's insistence on showing us every angle of the boom and then some. 

Janway was a Carlsbad native who came from the potash industry and was comfortable hanging with CEO's of the world's major oil companies as well as working men and women who are the backbone of the city.

“He was as Carlsbad as it gets,” declared Kyle Marksteiner, the city's PR chief under Janway often known as "Mr. Carlsbad."

"It's a wild ride," Janway told me in the middle of the oil boom. 

He rode it like a pro and today Carlsbad thrives in large part because of him.

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Judges Zamora & Hadfield
You hear about the big political names regularly, but there are literally hundreds of candidates quietly working the stump this primary season. They're shaking hands, door knocking and chatting on Facebook as they work to awaken the electorate and persuade them to vote in the primary--traditionally a low turnout affair.

Even the candidates without primary opposition are working the hustings. For example, two judges--Briana Zamora and Alisa Hadfield--are pictured here at a weekend event for the National Council of Negro Women (ABQ), even though neither Democrat has a rival in the June 5 primary. Now that's dedication.

ABQ Metro Court Judge Zamora will face off with Republican Brett Loveless in November as she tries to win a seat on the District Court Bench. And Hadfield, a current district court judge who was appointed in 2010, must now run in a contested election to secure a six year term. She will face the winner of the GOP primary, either David Standridge or Sanford Siegel.

Zamora, a UNM law school grad, is no stranger to La Politica. Her mom is ABQ State Senator Bernadette Sanchez who will retire from the Legislature at the end of the year.

NO FIGHT HERE

There has been simply no contest when it comes to garnering Indian support in the Dem US Senate primary. Martin Heinrich is running the table, announcing this week that Zia Pueblo has endorsed his candidacy and joining this long list of pueblos backing him:

The Pueblos of Isleta, Laguna, Ohkay Owingeh, Pojoaque, Santo Domingo and Taos, the Mescalero Apache Tribe, the Jicarilla Apache Nation, the Eastern Navajo Agency Council, Shiprock Chapter of the Navajo Nation, the Northern Navajo Agency Council, and former President of the National Congress of American Indians Joe A. Garcia.

Heinrich says he has been attentive to Indian needs and they obviously agree. They are an important Dem constituency and also a considerable part of the work load of a United States Senator from New Mexico.

MICHAEL SANCHEZ

Do you think State Senate Majority Leader Michael Sanchez is working to inoculate himself as SusanaPAC prepares to fire their cannons at him in the general election? Take a look:

Senate Majority Leader Michael S. Sanchez (D-29-Valencia County) announced a $23.5 million grant from the state Public School Capital Outlay Council for the first of two construction phases to rebuild 75 percent of Los Lunas High School.

Sanchez faces no opposition in the June 5 primary, but Valencia County GOP State Rep. David Chavez has been recruited by Guv political adviser Jay McCleskey--who runs SusanaPAC--to take on Sanchez in November. The PAC is expected to dump thousands of dollars into Chavez's campaign.

The race does not seem winnable to most observers, as Chavez is a deeply flawed candidate. For example, he said he was getting out of the state House because his law business was hurting. He then almost immediately turned around and announced he would run for the Senate. But there is a deep personal animosity between Sanchez and the Governor. This race appears to be more about that than strategic political thinking.

ALLIGATOR STRIKE

An Alligator strike today on southern GOP NM Congressman Steve Pearce:

Joe, This appears on the Pearce Facebook page.

"Steve Pearce was born in 1947 to a large working-class family. He was raised in Hobbs, New Mexico, where his father worked as a roustabout, selling vegetables on the side of the road to make ends meet. With six children to feed, times were often hard in the Pearce household."  

This does not seem to mesh with the facts. His father, Mr. Melvin Pearce had a good job with the Humble Oil & Refining Company/Exxon as Technician where he worked until his retirement in 1984. Here is an excerpt from the obituary of Congressman Pearce's father--Melvin Marcus Pearce-- published September 3, 2008:

...In 1951 (Melvin Pearce) began working for Humble Oil & Refining Company/Exxon as an Instrument Technician where he worked until his retirement in 1984. He enjoyed hunting coyotes and fishing trips to the Delaware River near Loving, N.M., where he often took his children to build good relations. Outfitted with fishing poles, ham, eggs, potatoes, pork and beans and an iron skillet, he headed for the river for a couple of days of fun and feasting. His children count these times as among the fondest memories of their childhood....

I believe Mr. Pearce is exaggerating his so-called poverty to get the Hispanic vote.

Now that's what you call a first-class Gator strike. Pearce faces no opposition this year in the GOP primary. His Dem general election opponent is Evelyn Madrid-Erhard of Las Cruces.

THE ECON BEAT

Much of New Mexico's economy may be growing at a snail's pace, but  not all of it. Get a load of this--they think a housing bubble could be forming in Carlsbad--of all places:

Carlsbad’s building boom has some in the city of 26,000 describing it as a real estate bubble. For the past four years, Carlsbad experienced unprecedented job  growth as the oil/gas and potash industries have kept unemployment below  5 percent and driven the city’s median wage to more than $50,000. This  attracted developers from Las Cruces, Texas and Arizona, who are  building multifamily apartments and residential subdivisions as quickly  as they can to house the infusion of workers.

We've blogged of a reduced work force at WIPP--the federal low-level nuclear waste disposal site near Carlsbad--due to budget cuts. But the  oil boom is more than making up for it.

And Hobbs is also hitting on all cylinders in the SE corner. The AP comes with this:

A scientific ghost town in the heart of southeastern New Mexico oil and gas country will hum with the latest next-generation technology--but no people. A $1 billion city without residents will be developed in Lea County near Hobbs, officials said, to help researchers test everything from intelligent traffic systems and next-generation wireless networks to automated washing machines and self-flushing toilets. Hobbs Mayor Sam Cobb said the unique research facility that looks like an empty city will be a key for diversifying the economy of the nearby community, which after the oil bust of the 1980s saw bumper stickers asking the last person to leave to turn out the lights.

Some 350 permanent jobs are expected for already booming Lea County because of this deal.

We're told ABQ Mayor RJ Berry was quite taken with Oklahoma City when he visited there and modeled some of his ABQ The Plan after that city's efforts, but we think he might be best advised to pick up the phone and call Mayor Cobb down there in Hobbs to see how things get done.

AROUND OUR TOWN

It's no secret that the ABQ area is still in the economic doldrums--salary and job growth is basically flat and even if you're doing well, you're watching your wallet as often as your waistline. So any restaurant that can deliver good value and mighty good tasting food finds itself much in demand. Such is Hurricane's Restaurant and Drive-in on Lomas in ABQ's mid NE Heights.

It's a hole in the wall with red vinyl booths, but a killer diner menu served inside or at the old-fashioned drive-in spaces. We opted one afternoon for a Denver omelet with toast and were surprised by the size--like a large pancake--and the price--under seven bucks. You're going to pay near ten at that chain diner down the road.

They didn't get squeamish on the ingredients, either, filling that delight with chunks of ham, bell peppers and onion and lacing it with a generous portion of cheddar. We finished our repast, asking ourselves why more places can't do this. (They also have something call the Disaster Burrito which we will leave to more adventurous souls). No wonder whether it's recession or boom, Hurricane's hangs around. It's nothing fancy, but neither are the times in which we live.

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New Mexicans are always thankful to be living amid one of the most wondrous landscapes on the planet. They'll take to the hiking trails, ski slopes and the city parks this holiday weekend to enjoy the bipartisan pursuit of soaking in sunshine and endless blue skies. A lot of visitors will be joining them. . .

Tourism in the state has been on the upswing as more ad dollars are devoted to attracting travelers. It's one of the few areas in which the Martinez administration and the Santa Fe budget hawks have allowed spending to increase in a meaningful way. The pay off is record lodging tax revenues in small towns like Red River in the north where tourism is the lifeblood of the economy. . .

The state tourism department will be asking the Legislature in January for a $3 million ad budget increase to attract high income visitors from the San Francisco region. Agreeing that the beauty and culture of New Mexico is worth showcasing to the nation is a point even the most ardent partisans can agree on. . .

Not wanting to put a damper on the holiday, NM journalist Wally Gordon looks for some silver linings in the state economic outlook and points to this:

. .  .Nationally the economy grew an unexpectedly strong 3.9 percent in the third quarter, the federal government reported. . .That national growth may help pull New Mexico along in its wake. It was also reported that Albuquerque has the cheapest gas in the country, clearly a boon to our numerous long-distance commuters.

There are tentative signs of a jobs recovery in the state but the fly in the ointment is the kind of jobs being created--most are of the low wage variety. . .

THE OIL PATCH

We noted  this week those astronomical hotel rates in oil boom country in SE NM. A reader familiar with the area clarifies:

While hotel rates are astronomical in Carlsbad they are pretty average in Hobbs and Roswell. This is because of the interest in the geologic formations known as the Bone Springs in Eddy County. Oil production on state lands is higher in Eddy County than Lea County because of development of Bone Spring resources.

And reader Violet Cauthon in Las Cruces comes with more on the oil outlook:

Your story on Mack Energy, state revenue from oil and gas, etc., touts the "high-paying jobs" that would be lost in the inevitable "bust" of the oil business. I grew up in Oklahoma, dad worked for an oil company and in my adult life I also worked for various oil companies.

Those high-paying jobs go to a lot of "gypsy" oil workers from many different states. The locals don't get much unless they're already on Mack Energy payrolls. Just ask the hotel/motel/restaurant industry why their businesses are booming. Out of state workers. I travel through that area and, yes, Artesia looks good as does Clovis but the surrounding rural poverty is still obvious.

Reader Doug Bentley writes of criticism of local biz leaders for not talking more about education reform, improving infrastructure and getting more investment money injected into the local economy:

"Why aren't business leaders talking about that?" It turns out, Steve McKee is talking about it. His points include right-to-work, eliminating the state income tax, regulatory reform & an overhaul of public education. See his speech here.

Thanks, Doug, but didn't we already slash the highest rates on personal income from 8.2% to 4.9%? Maybe we should be talking about the real business killer--the gross receipts tax that is now hitting over 8% in some areas of the state. . .

DUNN VS. POWELL

The odds seem to favor Republican Aubrey Dunn emerging as the official winner when a recount is concluded in the race for state land commissioner. Dunn's lead had shrunk to less than 600 votes but now the secretary of state's site has the lead at 704.

That is a large margin and a major error will have to be detected if incumbent Dem Land Commissioner Ray Powell is to emerge victorious. Recounts are mandatory when candidates are separated by one half of one percent or less. The recount of the land commission race is set to begin December 8.

AT THE MOVIES

Reader Eric Lucero returns with a look at some of the movies out for the holiday weekend:

The Penguins of Madagascar (PG) 92 mins, Comedy/Adventure 2.5 Stars out of 5.  This silly spy yarn tracks a quad of Penguins (remember Madagascar 2005? Skipper and the gang hook up with a snooty undercover clandestine group called the North Wind and the mayhem starts. It's really meant for Madagascar fans under 12, but for the rest of us it’s still a guilty pleasure for the rest of us. A lot of zany fun.”

The Theory of Everything (PG-13), 123 min, Bio-Drama, 4 Stars out of 5. This is a wonderful romantic biopic about renowned astrophysicist and  cosmologist Dr. Stephen Hawking. He projects a powerful human face as he deals with Lou Gehrig’s Disease. Director James Marsh’s (Man on Wire, 2008) fine direction and the inspired performances of Eddie Redmayn and Felicity Jones make this two hour journey into despair and triumph a must see for all audiences…

Interstellar (PG-13), 169 min, Action/Adventure, Sci-Fi Drama, 5 Stars out of 5. This monument of film making by renowned director Christopher Nolan is a brilliant gem. It stretches the bounds of film technology. Interstellar goes way beyond where 2001: A Space Odyssey ever dared to go. With Nolan you always are faced with plots within plots. Every scene has multiple meanings.

HOLIDAY HOURS

A friend in Las Vegas gave us a chuckle when they sent us this pic of "holiday hours" for a Starbucks on the famous Strip. That's an only in Vegas moment, for sure.

As for us, we'll grab a Starbucks over the long holiday weekend. We won't be open 24 hours but will be back in this space with you on Monday.

Happy Thanksgiving, New Mexico!

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Sen. Pinto

He's the longest serving current state senator and he may be the oldest person to ever serve in either chamber of the NM Legislature. John Pinto turned 90 last week. He celebrated with a visit from US Senator Tom Udall and a cupcake with a single candle.

Pinto, born on the Navajo reservation in dirt poor conditions in 1924, represents Indian Country in San Juan and McKinley counties. He has brought millions back to his district since winning his first term in 1976 and rarely draws serious election opposition.

For many of us Pinto's crowning achievement was winning money to turn one of the most deadly roads in New Mexico into four lanes. That would be the old U.S. 666--the "Devil's Highway." It's now U.S 491 and much, much safer.

It's hard to believe Senator Pinto, who had a career as an educator, will run for another four year term in 2016 when he turns 92, but in 2011 when we blogged that he would not seek another term in '12, Pinto later decided against retirement.

Pinto's now traditional singing of the "Potato Song" at the end of each legislative session is one of those only in New Mexico moments. That he was one of a handful of Navajo code talkers in WWII only enhances his legendary status.

BODY COUNTING

Here's a true New Mexico story:

The Carlsbad Environmental Monitoring and Research Center is offering free lung and whole body counting services, or radiation scans, to residents who live within a 100-mile radius of the Waste Isolation Pilot Plant. The scans are part of a research project titled "Lie Down and Be Counted." Since 1997, the program has been working to establish a baseline of normal radiation present in adults living in the region. "Natural radiation is already in the body. You can get it from eating a banana or eating a lot of wild game, such as elk," said Russell Hardy, director of the center.

Watch that banana intake.

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We like to check in from time to time on the latest oil price as it is so key to the state budget and the services New Mexicans get. Right now a barrel of the black gold has slumped back to the $46 a barrel area. That's well below the $56 a barrel the state is depending on as the average price in the current budget year. If we averaged $46 for the year the experts say that would mean at least a $70 million drop in tax and royalty revenue. Not huge but significant in a $6.2 billion budget. With that background we now turn to our self-proclaimed Energy Alligator:

US producers are finding ways to massively cut costs and increase production. This means oil can be produced profitably from the best shale acreage in New Mexico's Permian and San Juan Basins at the $40-$50 level. With these sorts of advances more and more acreage will become profitable to produce. The same thing is happening with natural gas. It's economies of scale and better technology making this possible. While estimating oil prices is like reading tea leaves, the trend appears to be strongly down. As New Mexicans we need to be prepared for the revenue and budget impacts we could see in the next 5 years. What will our share of federal royalties be? How will our Land Grant Permanent Fund be affected? Will there be "new" money for our legislators to spend? Or will we be scraping the bottom of the barrel looking for more money for education and Medicaid?

Thanks for that Energy Gator. We hear much from the anti-government conservatives about how dangerous it is for New Mexico to depend so much on federal spending which is under pressure. But if that's "dangerous" what about our dependence on oil and natural gas for revenue? It makes up some 20 percent of the state's general budget. And that leads us to this . . .

San Juan County GOP State Senator Bill Sharer continues to pound the table for repealing the over 350 exemptions from the state gross receipts tax and replace it with a flat 2 percent GRT on all purchases. Those exemptions are fiercely protected by those benefiting. Getting rid of them may be as hard as getting a gun out of the hands of the NRA president. But. . .

If energy prices stay low for the next five years and we aren't generating enough revenue from other economic activity to compensate, something has got to give. Medicaid and public education budgets can't be denied and the hunt will be on for new revenue. Sharer's hit on the exemptions is the first volley fired in what we expect to be a louder and more intense debate over tax policy as lawmakers grapple with new thinking in this new economic era.

By the way, those $350 a pop Carlsbad hotel rooms that we saw at the peak of the latest oil boom are history. A check on Expedia shows hotel suites down to about $199 and a budget hotel at around $75 a night. That's still pricey for the SE oil area, but at least the tourists can now get a place while they visit the Caverns.

WHITE HOT DENVER

As we blogged this week, Forbes named Denver as the #1 city in the USA for business and careers. Hard to believe that is only 8 hours north of us here in sluggish River City. Reader Michael Lamb sends this in that shows just how white-hot the Mile High City has become:

Metro Denver tenants snapped up an additional 4,550 apartments in the second quarter, but the robust new supply wasn't enough to keep rents from rising and vacancy rates from falling, according to the Denver Metro Area Apartment Vacancy & Rent Report. For comparison, metro Denver's apartment market absorbed 8,631 additional units in all of 2014, up from 4,613 units in 2013 and 3,368 in 2012, according to the report, There were only four other times in the past 25 years that the Denver area absorbed such a high number of units as it did in the second quarter, noted Mark Williams, executive vice president of the Apartment Association of Metro Denver.

And get this. The average apartment rent in Denver is now a record $1,265 but if you're generating high-paying jobs that's not a problem.

GOOGLE IS GOING

Back here, the Governor and policymakers down the chain take a hit as Goggle announces it is moving the Moriarty drone factory it bought only last year from Titan Aerospace. It will be moved to the San Francisco Bay area and presumably with it 40 jobs.

It's not so much the economic impact but the prestige of having one of the most valuable companies on the planet with a NM presence. That helps the state get notice with other major firms. State Economic Development Secretary Jon Barela has been out touting  improvement in the state's exports, but he sure didn't expect Google to export itself out of here.  Don't call the Guv for coffee today, Jon. She might not be in the mood to see you.

THE BOTTOM LINES

Reader Michael Caplan in Grants returns us to the crime beat to complete the Wednesday blog:

Joe, Everyone seems to want the judges to put more people in jail, but no one seems to want to pay to build and run those jails. You get don’t get what you won’t pay for.

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