BASIN RESOURCES4
www.basinresourcesusa.com • SPRING 2014
Spring 2014
Four Corners Oil and Gas Conference set 18Conference to be held May 7 and 8
Good News Travels Fast 8School of Energy expanding program
All for exports 35Gessing: There is global opportunity for San Juan Basin
Energy News 42Across the Nation
More than $300 million 22Encana plans to add 45 to 50 wells in 2014
Udall backs LNG exports 32Senator: This is an important industry to New Mexico
contents
14
26
10
ConnectivityTribes, communities benefit fromfederally funded electric upgrades
Year-End Closure, PurchaseAPS shuts down units 1, 2 and 3 to reduce emissions
Hard work opened doorsService, dedication
made business grow
36 40On the moveHenry Production and Pumps &Services now in same location
Farmington Museum Energy HallConstruction nears completion
www.basinresourcesusa.com •SPRING 2014
BASIN RESOURCES6
www.basinresourcesusa.com •SPRING 2014
Editor’s note
Still stuck in the recession with dry natural gas output at a 20-year low, there hasn’t
been a lot of good things to talk about in the San Juan Basin over the last couple of years.
But lately, talk in the oil patch has begun to turn from the stagnant almost nonexistent
natural gas production to real hope for the Mancos Shale. That talk has begun to turn into
some real proof as companies are beginning to invest and see solid opportunities in the
Basin again.
Encana announced its future plans and the San Juan Basin is one of the company’s five
core liquid-rich plays the company will focus in 2014.
To date, Encana has spent approximately $200 million to explore the Mancos Play and
in 2014 they plan to invest between $300 million and $350 million in the San Juan Basin
while running a two-to-four drilling rig program to drill 45 to 50 net wells in 2014. The
company said this will optimize its completion process by continuing to advance its pace
of development and will work further to reduce well costs.
Also, in 2013 WPX Energy had 15 wells in the Mancos and the company has an-
nounced plans to budget $200 million to drill 37 more wells, according to its third-quar-
ter earnings report.
This has area industry leaders encouraged and many believe these investments will spur
other companies to follow their lead.
Of course, we’ve been through these mountains and valleys many times and businesses
are still cautious about declaring economic victory just yet.
However, when companies start putting money where their mouth is, the area starts to
take notice.
A spark of hope onthe horizon in 2014
Don Vaughan
puBliSHER
Cindy Cowan Thiele
EDiTOR
Debra Mayeux
Dorothy Nobis
Bill papich
CONTRiBuTiNG WRiTERS
Josh Bishop
CONTRiBuTiNG pHOTOGRApHER
Suzanne Thurman
DESiGNER
Shelly Acosta
DeYan Valdez
Aimee Velasquez
SAlES STAFF
For advertising information
Call 505.516.1230
www.basinresourcesusa.com
Basin Resources magazine is published four times ayear by Majestic Media. Material herein may not bereprinted without expressed written consent of the pub-lisher. Opinions expressed by the contributing writersare not necessarily those of the publisher, editor orBasin Resources magazine. Every effort has been madeto ensure the accuracy of this publication. However thepublisher cannot assume responsibility for errors orommissions. © 2014 Basin Resources magazine.
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100 W. Apache Street
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505-516-1230
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Cindy Cowan Thiele
www.basinresourcesusa.com •SPRING 2014
BASIN RESOURCES8
www.basinresourcesusa.com • SPRING 2014
Word has gotten out about the quality of the training offered
by the San Juan College School of Energy.
Because of the ever-increasing demand from the industry and
the community, the School of Energy is expanding its Well
Control program to
other community
colleges throughout the
country. We have
created an interactive
television, or ITT, Well
Control course that
provides the training
needed to be proficient
as a supervisor for
drilling, workover and
completion, and to
receive an International
Association of Drilling
Contractors, or IADC,
certification and
accreditation from San
Juan College.
The ITT classes will
give students at Panola
College in Carthage,
Texas, through Work-
force Training, the same
opportunity to be ac-
credited and certified as
our students in the Four
Corners. Panola’s first
class was scheduled for
the end of January. The
School of Energy will provide students with simulators so they
can complete the course requirements.
Those at the School of Energy and San Juan College
appreciate the opportunity to share these programs with those
throughout our country who are experiencing a high boom in
oil and gas production. The Well Control program is also being
extended to community colleges in Wyoming and Ohio. Our
focus will continue to be on providing a curriculum to those
working in the oil and gas industry to help them obtain the
education and training they need to be successful in their
chosen career.
The School of Energy is also working with the industry to
provide a series of short courses for those who can’t attend
college on a full-time basis. The 18-month program will give
students an associate degree in Petroleum Production Operation
at a cost of under $4,000 for the degree.
These new ventures of providing classes online and through
ITT will help San Juan College and the School of Energy meet
the high demand from the industry for professionally certified
and educated field technicians.
If you’d like more information about the Well Control
program, call 505.566.3880, or for any other training offered
by the School of Energy, please call 505.326.5705.
good news travels fast
ranDy Pacheco
Dean of School of energy
San Juan college
BASIN RESOURCES10
www.basinresourcesusa.com •SPRING 2014
“Our plan for the plant moving
forward saves APS customers nearly a
half-billion dollars over other energy
sources and maintains a highly reliable,
cost-effective source of electricity
generation for APS and other users
in the Southwest.” — Mark Schiavoni
ExEcutivE vicE PrESidEnt
aPS oPErationS
BASIN RESOURCES 11
SPRING 2014 • www.basinresourcesusa.com
DebrA MAyeux
Basin Resources
In an effort to reduce carbon emissions
in the Four Corners region, Arizona
Public Service, or APS, closed units 1, 2,
and 3 of the Four
Corners Power
Plant and pur-
chased the
Southern Califor-
nia edison
interests in units
4 and 5.
The move
came Dec. 30, 2013, and had been
planned since November 2010. It
included a plan to install emission
controls on units 4 and 5, which are
considered by the company to be “more
efficient units,” according to a press
release from APS.
APS CeO Don brandt referred to the
closure and purchase as “bittersweet,” but
also as a “milestone” for the plant, which
is one of the oldest coal-fired plants in
the region. The plant opened in 1963
with units 1 and 2, and then added unit
3 in 1964.
“We have completed a transaction that
will benefit the environment, allow us to
continue to support the economy of
the Navajo Nation and surrounding
community, and help electric users in
the Southwest with an important,
low-cost generating resource,” brandt
said. “Generations of Four Corners
employees have dedicated their careers to
running those three units to keep lights
on for our customers.”
APS plans to install selective catalytic
reduction equipment on units 4 and 5 by
July 31, 2018, to meet the best Available
retrofit Technology, or bArT,
requirements set forth in August 2012 by
the environmental Protection Agency.
“Our plan for the plant moving
forward saves APS customers nearly a
half-billion dollars over other energy
sources and maintains a highly reliable,
cost-effective source of
electricity generation for APS
and other users in the South-
west,” said Mark Schiavoni,
executive vice president for
Year-end closure,
purchaseAPS shuts down units 1,2, and 3 to reduce emissions
operations at APS. “Along with natural gas, nuclear, renewable
and energy efficiency, coal has an important place in our
company’s balanced energy portfolio.”
APS purchased Unit 4 from Southern California Edison for
approximately $182 million, and then filed an application Dec.
30, 2013, with the Arizona Corporation Commission to
recover costs associated with the purchase of Southern Califor-
nia Edison’s interest in the plant. This came about because the
company’s 2012 rate settlement case included provisions that
allowed APS to seek rate relief for those expenses prior to its
next rate case. The filing amounts are expected to have a rate
increase of about 2 percent for the APS residential customer.
The next step of this plan is for APS to proceed with
decommissioning work on Units 1, 2, and 3. This includes
dismantling and removal of the older units and any associated
structures. This will be handled by employees who were
responsible for operating the units, and should last for the next
three years.
The decommissioning work allowed APS to keep its promise
of “no layoffs” at the plant, which employs 434 workers, 82
percent of whom are American Indian, according to Schiavoni.
The workforce will be reduced through attrition.
APS historically has been one of the largest employers in the
region. Along with its support of Navajo Mine, it is believed
that the Four Corners Power Plant has an estimated $225
million annual economic impact on the Navajo Nation and Four
Corners economies. The company has estimated that during the
next 30 years the continued operations at Four Corners Power
Plant could generate more than $6.3 billion in economic value
for the region.
Also, APS filed an application with the Arizona Corporation
Commission to recover costs associated with the purchase of
SCE’s interest in the plant. The company’s 2012 rate case
settlement includes a provision that allows APS to seek rate
relief for those expenses prior to its next rate case. The filing
amounts to a bill impact of about 2 percent. For a typical APS
residential customer, monthly bills would increase from
$140.12 to $142.89.
APS, Arizona’s largest and longest-serving electricity utility,
serves more than 1.1 million customers in 11 of the state’s 15
counties. With headquarters in Phoenix, APS is the principal
subsidiary of Pinnacle West Capital Corp. (NYSE: PNW).
BASIN RESOURCES12
www.basinresourcesusa.com • SPRING 2014
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BASIN RESOURCES14
www.basinresourcesusa.com • SPRING 2014
Bill papich
Basin Resources
construction of Farmington Museum’s
new energy exhibit building is nearing
completion. Next comes the process of
making detailed decisions on the exhibits
that will fill the building.
Museum staff is planning to form an ex-
hibit review committee to address exhibit
details and to provide advice to museum
curators on how to prepare for placement
of museum exhibits and their details.
“We would want the committee to re-
view our current plans and provide input
on what we may be missing and what
more we need to include to make sure that
what we have is accurate,” said Bart Wilsey,
museum director.
planning for the Farmington Museum
Energy hall began 10 years ago. area oil
and natural gas production companies and
power plants have contributed approxi-
mately $1 million for exhibits. Wilsey said
the funding goal for museum exhibits is $2
million.
construction of the building is funded
by the city of Farmington through a $2.5
million city bond renewal.
The Farmington Museum Energy hall
Farmington Museum Energy Hall
Construction near completion; exhibit review committee forming
Bill Papich photo
will be 7,500 square feet of exhibits that ex-
plore the entire process of energy development.
The Energy Hall is intended to tell the story of
how natural gas, oil and coal are formed, how
these minerals are discovered, and the process
of producing
energy from these minerals, and how the en-
ergy produced is transported and utilized.
Technological innovations in energy
exploration, production and transportation are
to be included.
“In the words of T. Greg Merrion – he put it
best when he
donated $100,000 for the Energy Hall ex-
hibit,” said Wilsey. “He said, ‘I want a world
class exhibit.’”
T. Greg Merrion is CEO of independent oil
and natural gas producer Merrion Oil and Gas
Corp. of Farmington. Wilsey said Merrion’s
words sum up what everybody involved in
planning for the Energy Hall wants: A state of
the art energy exhibit that
becomes nationally known and puts Farmington on the map as a
destination for visitors from throughout the United States.
The Energy Hall also is intended to become a regional destina-
tion for students who attend schools with energy exploration,
development, production and transportation on their school
curricula. Wilsey said the Energy Hall would include exhibits on
renewable energy such as wind, solar, geothermal, hydrogen fuel
cells and algae that can be converted into energy.
“If you go from the dinosaurs to the renewables, that’s a big
stretch,” Wilsey said. “So we’re grappling with the story of
energy, how to tell that story, and the story is huge.”
That’s where the review committee comes in, Wilsey said, to
assist in the process of deciding what exactly to include in the
exhibit − with the resources available to the museum and the
BASIN RESOURCES 15
SPRING 2014 • www.basinresourcesusa.com
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BASIN RESOURCES16
www.basinresourcesusa.com • SPRING 2014
�
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Farmington Museum
Energy Exibit Floor Plan
space available − and what not to put in
the Farmington Museum Energy Hall.
Exhibits are planned to include a ride
into an underground coal mine, a moving
pump jack and other natural gas and oil
production equipment exhibits. A “long-
wall” coal mining machine with an
interactive control panel for visitors also is
planned.
Of the 7,500 square feet of space
available in the Energy Hall, approximately
5,000 square feet will focus on the oil and
natural gas industry. Approximately 2,500
square feet will be exhibits on the coal
mining industry and electricity production
by power plants.
On the drawing boards are exhibits on natural gas pipeline
transportation and scale models of a power plant and an open
pit coal mine. A major part of the planned geology exhibits
will include an exhibit of the inland sea that covered the San
Juan Basin approximately 100 million years ago when
Farmington was a tropical area. When the inland sea receded,
layers of sedimentation covered the organic materials – the
tropical forests, marine life, dinosaurs – that today have become
natural gas, oil and coal. The inland sea exhibit is planned to
include a simulated underwater experience of 100 million years
ago so visitors can observe the prehistoric life that became the
fossils on display in the museum’s fossil collection.
Farmington Museum’s existing oil and natural gas exhibit of
1,500 square feet will be incorporated into the new exhibits.
The existing museum includes much of the Alan Hawkinson
Collection of oil and gas memorabilia dating back to the
beginning of the 1900s. The collection relates to the history
of the oil and gas industry consumer markets. There are thou-
sands of memorabilia items from the earliest gas stations and
from the early oil and natural gas production and transportation
companies that operated in the San Juan Basin. The new
Energy Hall will provide space for a full-sized replica of a
1940s gas station that showcases items from the Alan
Hawkinson Collection.
Museum planners anticipate that the approximately $1
million that still is needed for the new Energy Hall’s exhibits
would come from donations by the energy industry, science and
museum foundations, the state legislature and the city of
Farmington.
BASIN RESOURCES 17
SPRING 2014 • www.basinresourcesusa.com
Learn more about Encana’s operations in San Juan:
encana.com/sanjuan
Investing resources to save resources.
Over the past five years, Encana has substantially invested in projects to improve our industry’s environmental performance and safety standards through developing innovative technology.
e about Encana’n morLear
encana.com/sanjuan
ations in San Juan:s opere about Encana’
encana.com/sanjuan
BASIN RESOURCES18
www.basinresourcesusa.com • SPRING 2014
DOROTHY NOBIS
Basin Resources
In 1994, visionaries in the oil and gas
industry decided to host an oil and gas
conference to bring together professionals
in the business to learn about new rules
and regulations that affected the oil patch.
That first conference was held at the
Farmington Civic Center and was organ-
ized by six organizations – chapters from
the American Petroleum Institute, or API,
the Society of Petroleum Engineers, or
SPE, the National Association of Corro-
sion Engineers, or NACE, and the Ameri-
can Society of Safety Engineers, or ASE,
along with the Desk and Derrick Club of
Farmington and the Farmington Chamber
of Commerce. Each partner had – and still
has – a vested interest in the oil and gas
industry in the San Juan Basin and the
Four Corners and had volunteers serve on
the conference’s Executive Board.
Today, 20 years later, the Four Corners
Oil and Gas Conference has grown, taking
its “home” from the Civic Center to San
Juan College to McGee Park as attendance
demanded more growth and more room.
This year, the conference will be held May
7-8. The conference is not open to the
public, due to safety concerns, and there is
no charge to attendees, who must pre-reg-
ister.
Jan Tomko is the conference coordinator
for the conference, which is held every
other year. In spite of challenges the indus-
try has faced, the conference continues to
be successful, she said. “The conference
brings together professionals in the indus-
try, who share knowledge and information
and (a chance) to network with their peers.
It’s a great opportunity for businesses to
promote themselves.”
Karen Ortega has been involved in the
conference for many years and has served
Four Corners Oil and Gas Conference set for May 7 and 8
Industry professionals,
businesses come together
SPRING 2014 • www.basinresourcesusa.com
as the conference chair for the past two conferences. “Since its in-
ception, the goal of the Four Corners Oil and Gas Conference has
been to provide information on new types of technologies, plus
new and changing regulations that affect the oil and gas industry,”
she said.
The conference offers a trade show, which is a big draw for
those who attend as well as the vendors who hope to get one of
the 399 booth spaces available. The booths are awarded first to
previous vendors, then on a first-come, first-served basis, Tomko
said. “In 2012 we had 305 exhibitors,” she said. “Not all are local
– many of the vendors come from outside the region. Some are
trying to move into the area and find the conference a great op-
portunity to showcase their goods and services.”
Gavin Tweedie is the chair of the Program Committee, which
strives to bring in speakers who share their knowledge of the in-
dustry.
“We are very excited to have Encana and WXP Energy coming
to discuss their production and future plans for the Mancos Shale
development,” Tweedie said of this year’s speakers. “We will have
Water Management Solutions, New Mexico Tech and LT Environ-
mental all coming to talk about ground water usage and issues
around that.”
Environmental experts from WXP and Exterran will discuss
BASIN RESOURCES20
www.basinresourcesusa.com • SPRING 2014
Ozone and New Source Performance Stan-
dards, or NSPS, JJJJ (an alphabet number-
ing system) regulations and the effects on
the industry, Tweedie added. In addition,
safety presentations and regulatory updates
are also on the speaker list.
“We always want to make sure that we
have a good quality program with speakers
who are relevant to what’s going on in the
industry,” added conference chair Karen
Ortega. “We always have a great list of
speakers and it’s hard to have to choose
among so many great speakers when we
only have so many slots available.”
Putting on a conference that attracts
people from throughout the Southwest
takes the time and effort of many, Ortega
said. “We have representatives from the six
sponsoring organizations, plus our confer-
ence coordinator, who sit on the Executive
Committee, which is a total of 16 people.
However, it takes many more volunteers
behind the scenes and countless hours to
make sure our conference is a success. We
couldn’t do it without the help of the
sponsoring organizations.”
After conference expenses are paid, the
committee divides the proceeds among the
six partners. “Many of them use it (proceeds)
to offer scholarships for students to attend
college or for members to receive training
and certifications,” Tomko explained.
In spite of the hours spent planning and
hosting the conference, Karen Ortega said
the conference is an event she and the oth-
ers enjoy.
“I, like many others in the Four Corners
region, rely on the oil and gas industry in
several ways,” she said. “I find the friend-
ships made and the familiar faces we see
year after year very rewarding.”
“I want to do anything I can to help
make the conference a success and have
people wanting to come back,” Ortega
added.
For additional information on the
conference, visit the website at
www.fourcornersoilandgas.com or call
Jan Tomko at 505.258.1748 or the
Farmington Chamber of Commerce at
505.325.0279.
“We are very excited to
have Encana and WXP
Energy coming to discuss
their production and future
plans for the Mancos Shale
development.”
— Gavin Tweedie
ProGram CommiTTee
Chairman
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BASIN RESOURCES22
www.basinresourcesusa.com • SPRING 2014
DEbra MayEux
Basin Resources
The San Juan basin is one of five core liq-
uids-rich plays on which Encana Corpora-
tion will focus in 2014 to generate profitable
growth, according to a company statement
issued Dec. 11, 2013.
“In November, we announced
a clear vision and strategy to lay
the foundation for Encana’s fu-
ture,” President and CEO Doug Suttles said.
“Going forward through to 2017 we will
measure success by our performance on
three key indicators: our transition to a bal-
anced commodity portfolio, operational ex-
cellence and the integrity of our balance
sheet.”
Encana plans to transition to a more bal-
anced commodity portfolio and achieve a
goal of deriving approximately 75 percent of
its cash flow from oil and natural gas liquids
by 2017, by focusing on three quarters of its
planned $2.4 billion to $2.5 billion
capital investment on five oil and
liquids-rich assets: the San Juan
basin, Montney, Duvernay, DJ basin
and the Tuscaloosa Marine Shale.
Encana plans to invest between $300 and
$350 million in the San Juan basin while
running a two-to-four drilling rig program
to drill 45 to 50 net wells in 2014. The
company said this will optimize its comple-
tion process by continuing to advance its
pace of development and work further to re-
duce well costs. Work will also continue to
delineate further the company’s acreage,
with Encana intending to work with the bu-
reau of Land Management to find ways to
streamline the permitting process.
Encana plans to accelerate its develop-
ment of the oil and liquids-rich areas of the
Montney play, specifically the Gordondale,
Pipestone and Tower areas, while continuing
to improve capital efficiency across the play.
With an investment of nearly $900 million,
Encana plans to run a six-to-eight drilling rig
program to drill 80 to 85 net wells in 2014.
More than $300 millionEncana plans to add 45 to 50 wells in 2014
Jeff Balmer, asset manager of the San Juan Basin for Encana, speaks March 18, 2013, at San Juan College during the San Juan Basin Energy Conference. – Debra Mayeux photo
SPRING 2014 • www.basinresourcesusa.com
Fifteen to 20 wells are expected to be drilled in Duvernay with En-
cana moving into a full resource play hub development mode with
pad drilling in the northern Kaybob area of the Duvernay. The com-
pany also plans to complete its evaluation of the southern Willesden
Green while finalizing a midstream infrastructure solution to support
future development. This will be an investment of nearly $300 mil-
lion.
Encana’s focus in the oil and liquids-rich DJ Basin play will be con-
tinuously to improve capital efficiency with a goal to reach approxi-
mately 70 percent year-over-year growth in production in the play.
The company plans to invest $250 to $300 million and run a four-to-
six drilling rig program to drill 40 to 50 net wells in 2014.
In 2014, Encana also will complete its assessment of the Tuscaloosa
Marine Shale with plans to invest upwards of $150 million to operate
one-to-three drilling rigs and complete nine-to-12 net wells.
These five assets are expected to make up about 25 percent of total
production in 2014 while generating approximately 45 percent of
total upstream operating cash flow before the impact of commodity
price hedging.
This reflects a 10 percent reduction in planned capital investment
from its 2013 levels, but the company’s forecasted production is ex-
pected to remain the same. Total liquids production is expected to
grow by 30 percent year-over-year, which is expected to offset a
small decline in expected gas production for 2014. “With growth
in higher margin liquids, the company is estimating it will achieve
an approximate 10 percent increase in netbacks in 2014,” the pre-
pared statement said.
Encana said it will maintain its balance sheet integrity by
“aligning its capital expenditures with cash flow and unlocking
value from its asset base through an initial public offering of its
Clearwater Royalty business. The company also plans to repay
from cash a US$1 billion, 5.8 percent note maturity due May 1,
2014.”
The goal would be to create a “sustainable shareholder value”
into the future, Suttles said. “The work we completed in 2013 has
positioned us very well for a strong start in 2014, a start well
aligned with our new strategy.”
As a result of Encana’s “focused strategy and capital investment
plan,” the company projects its 2014 upstream operating cash
flow, including hedging, to nearly $3.2 billion. Total cash flow is
expected to range between $2.4 and $2.5 billion. Natural gas
production is expected to average between 2.6 billion cubic feet
per day and 2.8 billion cubic feet per day with total liquids pro-
duction reaching75 thousand barrels per day.
These plans came after the company went through a 20 per-
cent workforce reduction to restructure in November 2013.
“We have completed the most difficult part of our transition
and I want to thank all of our staff for their professionalism and
continued dedication to the company through what was a tough
time for everyone at Encana,” Suttles said. “With the announce-
ment of our 2014 plans, we are solely focused on building an ex-
citing and successful future for Encana.
BASIN RESOURCES24
www.basinresourcesusa.com • SPRING 2014
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BASIN RESOURCES26
SPRING 2014 • www.basinresourcesusa.com
DeBRa Mayeux
Basin Resources
Hard work
opened
doorsBill Bailey’s consistent service and
dedication made the business grow
Bill Bailey graduated in the spring of
1982, and by summer of the same year
he had a business.
Bailey purchased a welding rig and
began seeking clients for Bailey’s
Welding. He learned his skill at
Farmington High School, where he
completed two years and 1,080 hours
of vocational training.
With his welding truck and
knowledge, Bailey began taking any
odd job that came his way. “I needed to
have experience, and I was young and
nobody knew who I was,” he said.
Thirty-two years later, Bailey and his
wife Vanessa have an office, welding
shop and more than 30 acres of land at
505 County Road 350 in Farmington.
BASIN RESOURCES 27
SPRING 2014 • www.basinresourcesusa.com
www.basinresourcesusa.com • SPRING 2014
BASIN RESOURCES 29
SPRING 2014 • www.basinresourcesusa.com
The company expanded on Nov. 4,
2013, when it moved from its old loca-
tion on U.S. 64 to the new building. “We
purchased the place and remodeled the
offices,” Bill said. It was a necessity. The
business outgrew its old space that con-
sisted of a shop on three acres and an
offsite office. Now, it is a one-stop shop
for all of Bailey’s services.
The growth came from his sought-
after services. Bill proved he could pro-
vide the jobs that were needed, but it
took a lot of work and dedication to the
craft.
In the early days, he would take his
welding truck out to well sites for well
hookups and rig maintenance. He also
did some ornamental work – “Whatever I
could.”
Some of Bill’s first jobs included
building compressor shields for Merid-
ian. “That got us in the door,” Vanessa
said.
Bill started Bailey’s Welding as a sole
proprietorship. When he received con-
tracting jobs, he had to hire a few em-
ployees. “We wanted to keep it small, but
as time went on there were opportunities
for growth,” he said. “We went from a
small shop to a bigger shop, to a bigger
shop.”
At one point the Baileys were operat-
ing the shop, but doing all of the office
work from their home. Then in 2001,
the business grew big enough to become
incorporated.
BASIN RESOURCES30
www.basinresourcesusa.com • SPRING 2014
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“Bill has worked really hard and we’ve
been totally blessed,” Vanessa said.
Today Bailey’s Welding employs 23
people and has contracts with such com-
panies as ConocoPhillips, Enterprise and
XTO.
“We build tanks at the shop. We do
field work, pipeline maintenance,” Bill
said. “We haul materials to locations with
our semis.”
They work with heavy equipment pro-
vide dirt work and remediation work,
while still providing the service that
founded the business – welding.
Bill is surprised when he thinks about
how big his business has become. “I just
thought I would keep it small,” he said.
“We are thankful for the people who gave
us the opportunity to show them what
we could do.”
He has built a business that can be
passed down to the Baileys’ only son,
Timothy, who is studying business at
New Mexico State University. “He, hope-
fully, will be able to help his dad some-
day,” Vanessa said.
And with all of the extra space at their
new location, “We have a lot more room
to grow and work and meet our cus-
tomers’ needs,” Bill said.
For more information about Bailey’s
Welding call, 505.632.3739.
“We are thankful for
the people who gave
us the opportunity
to show them what
we could do.”
— Bill Bailey
SPRING 2014 • www.basinresourcesusa.com
BASIN RESOURCES32
www.basinresourcesusa.com • SPRING 2014
Debra Mayeux
Basin Resources
u.S. Senator Tom udall, D-N.M., has
joined other state officials to push for the
export of liquid natural gas, in order to
support natural gas exploration in the
state.
“This is a tremendously important in-
dustry to New Mexico,” udall said during
an October meeting with industry offi-
cials. “Most New Mexicans know this in-
dustry contributes a lot to the state.”
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.
udall wants to see the oil and gas in-
dustry continue to operate and provide
jobs and tax base to the state, he said.
The industry, however, has been stag-
nant, with oil production down and natu-
ral gas exploration on hold. There are
many reasons for the decline, including
the low cost for natural gas, which slowed
the market for the product, as well as dif-
ficulty placed on the industry by federal
agency that has slowed down the permit-
ting process.
The San Juan basin has a potential to
develop “tens of trillions” of cubic feet of
“We want to urge the
Energy Department
applications and move
them along.”
— U.S. Senator tom Udall
d-n.m.
The Benefit of LNG Exports
Udall backs LNG exportsSenator: This is a tremendously important industry to New Mexico
natural gas to be marketed inside and out-
side of the United States. The reason this
hasn’t happened is the price of natural gas,
New Mexico Oil and Gas Association
President Steve Henke said
“There hasn’t been drilling in the San
Juan Basin because of decreased natural
gas prices,” Henke said.
Oil exploration also has slowed here
because of regulations that limit compa-
nies’ access to public lands, according to
Henke, who pointed out the BLM has a
hydraulic fracturing rule and limited ac-
cess to public lands for production.
“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. Congress devel-
oped a pilot program to streamline permit-
ting in both the Permian and San Juan
Basins. “That pilot of this area was to
make sure there is better permitting and
better enforcing,” Udall said.
The law has expired and the senator is
receiving requests to reauthorize it. “I
think it’s a good law” Udall said, adding
he would like to see it continued.
Udall also joined with 33 U.S. Senators
in sending a July 9 letter to Energy Secre-
tary Earnest Moniz asking the Energy De-
partment to speed up the process to allow
for the exportation of liquified natural gas,
or LNG, to other countries.
BASIN RESOURCES 33
SPRING 2014 • www.basinresourcesusa.com
GROWTH & STRENGTH That's My Bank!
Larry McGee, Colorado Market PresidentShelia Mathews, CEO & President
That's My Bank!
GROWTH & STRENGTH GROWTH & STRENGTH GROWTH & STRENGTH
,
Estimates of U.S. Total Natural Gas Resources Base vs.
Total U.S. LNG Exports and Consumption
Planned and Proposed LNG Liquifaction Capacity
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BASIN RESOURCES34
www.basinresourcesusa.com •SPRING 2014
“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 en-
ergy supplies,” the senators wrote. “For the
first time, the United States is being recog-
nized as one of their options. Responsible
development of natural gas can benefit the
environment and our international priori-
ties.”
The letter asked the Energy Department
to consider exporting LNG to Europe and
Japan; both nations are in need of natural
gas to “fuel their economies.”
The Energy Department has received 20
applications for LNG export projects, but
set a timeline of considering one every six
to eight weeks, according to the letter.
“We want to urge the Energy Depart-
ment applications and move them along,”
Udall said. This could drive up the price of
natural gas and encourage increased pro-
duction.
Secretary Moniz responded on Sept. 12
saying the energy department must “con-
duct a public interest review of LNG ex-
port applications to non-Free Trade Agree-
ment countries and to grant the
Is the Industry Ready?
* Natural Gas 48
DeBra Mayeux
Basin Resources
There is great economic opportunity for
the San Juan Basin, if natural gas becomes a
key export from this country and the Fed-
eral Governments open up public lands for
production.
This was the message from Paul Gessing,
executive director of the rio Grande Foun-
dation during the October 2013 Desk and
Derrick Club banquet at the San Juan
Country Club.
Gessing has been pushing for the u.S. to
start exporting natural gas to countries such
as Japan, India and europe. “Japan really
wants our natural gas,” Gessing said. “We
could be a major producer and exporter of
natural gas.”
There is a global “opportunity” for natu-
ral gas exportation and, as far as oil produc-
tion goes, the u.S. is topping the global
market, with an opportunity to overtake
russia as the world’s leading oil producer.
“No one thought that would happen,” Gess-
ing said. “We are on an upward trend head-
ing north in terms of production.”
This could help in Gessing’s quest to
make New Mexico into an “economically
free state.” He focused on ways to do that
during his presentation.
It includes seeking support from the pub-
lic for a campaign to encourage the Federal
Government to return control of the public
lands to the Western States for a local man-
agement. “Wouldn’t it be great if the state of
New Mexico controlled Carlsbad Caverns,”
Gessing said.
Instead there are “nameless, faceless bu-
reaucrats” who make it difficult for states to
access public lands and the minerals found
below the land.
“The federal government is moving all
too slowly on oil and natural gas develop-
ments, with declines of 33 percent for natu-
ral gas production,” Gessing said. “With all
of the energy out there, the states that have
private land holdings are doing well.”
North Dakota is having a boom at this
time, much like Pennsylvania.
Thirty percent of the nation’s coal re-
serves are found in states west of the Missis-
sippi and 20 percent of the nation’s oil and
gas reserves are in those same states – one
of which is New Mexico. The problem is
that the bureaucracy in Washington does
not allow these reserves to be developed
without a lot of red tape and expenses
through the permitting process, according
to Gessing.
With 41 percent of New Mexico’s land
being federally owned, oil and gas compa-
nies have to wade through lengthy and
costly permitting processes to access the re-
serves. Gessing argues that if the states were
allowed to manage the land, “incredible
wealth could be generated.”
“New Mexico would be transformed, if it
controlled its own resources,” Gessing said,
adding that 68,000 jobs could be added to
the state, along with $8 billion to the econ-
omy.
Without the ability to access those natu-
ral resources, New Mexico has an estimated
two-tenths of a percentage point for eco-
nomic growth.
Gessing pointed out that he is not sug-
gesting the federal government open up the
forest or national parks for the purpose of
oil and gas production. He did, however,
say that he believes the land is not being
“managed effectively for the economic ben-
efit of our nation.”
National forests are burning down each
year from fires that burn uncontrollably be-
cause the land is not appropriately man-
aged. There also are questions about the
way the national parks are being managed –
specifically after the recent government
shutdown.
“It’s embarrassing for a First World coun-
try not to be able to open its major tourist
attractions,” Gessing said.
The rio Grande Foundation is support-
ing a version of House Bill 292, which was
introduced during the 2013 Legislative Ses-
sion in Santa Fe. It is the Transfer of Public
Lands act, which encourages the Federal
Government to give New Mexico back its
All for exports
“Japan really wants our
natural gas.
We could be a major
producer and exporter
of natural gas.”
— Paul GessinG
executive director
rio Grande Foundation
BASIN RESOURCES 35
SPRING 2014 • www.basinresourcesusa.com
* Gessing 48
Gessing: There is global opportunity for San Juan Basin
www.basinresourcesusa.com • SPRING 2014
BASIN RESOURCES36
“We decided to expand ourselves a bit.
We’re preparing for more
growth in the basin.” — Sam Henry,
Henry Production PreSident
SPRING 2014 • www.basinresourcesusa.com
Henry Production opened its doors in
1962 in the San Juan basin when Harvey
Henry made the decision to live in Farm-
ington rather than be transferred by
ConocoPhillips to North Dakota.
Harvey believed there was opportunity
in the region, so he purchased a small
production business from Jim Gould for
$2,300. “There were a bunch of contract
pumpers at the time, and I thought I
could do better than they did,” he said.
The family-owned business has perse-
vered through the industry’s booms and
busts, and in preparation for the next pos-
sible boom, the business changed loca-
tions to provide it with more space.
Henry Production and secondary com-
pany Pumps & Service recently moved
from 603 and 603 S. Carlton ave., to
3430 Morningstar Drive.
“We’ve actually owned the building for
about five years,” said Sam Henry, presi-
dent of the company.
The move allowed Henry Production
Henry Production, Pumps and Services now in same location
On the move
Debra Mayeux
Basin Resources
www.basinresourcesusa.com • SPRING 2014
and Pumps & Service to work
out of the same location. “We
decided to expand ourselves a
bit,” Sam said. “We’re preparing
for more growth in the basin.”
Pumps & Service opened in
1978 as a service organization.
“Pumps & Service sells, services
and fabricates durable equip-
ment systems — pumps, com-
pressors, generators, controls
and more — that ensure
smooth, around-the-clock pro-
duction at agricultural sites, con-
struction sites, energy
production plants, food manu-
facturing plants, landfills, na-
tional laboratories, oil and gas
sites, semi-conductor plants and
wastewater treatment plants,”
according to the website,
pumpsandservice.com.
“Our 36-year record of
successful turnkey engineering
projects is driven by our trusted
industry and equipment
experts,” the website stated. “We
know what it takes to keep
systems working seamlessly to
ensure uninterrupted processes,
greater production and larger
profits for our customers.”
Henry Production is a “com-
pressor rental, maintenance and
fabrication company,” Sam said.
The company provides rental
and sales on a flexible schedule
including 30-, 90-, and 120-
day contracts. The two compa-
nies employee 90 people.
In the new office is the typewriter that Virginia Henry began using in 1962 to type invoices
at the kitchen table. Three months after the company started, after picking up several
leases to operate, Harvey Henry hired his first employee. For the first seven years, he
worked every day of the week. – Josh Bishop photo
BASIN RESOURCES40
www.basinresourcesusa.com • SPRING 2014
Debra Mayeux
Basin Resources
The Navajo Tribal utility authority
has been included in a more than $1.8
billion plan to improve electric service to
37,000 rural customers in 25 states.
The u.S. Department of agriculture
will award the Navajo Tribal utility au-
thority $168 million to build 1,215
miles of line, will invest in smart grid
technologies, and has made other system
improvements to help 3,800 rural electric
consumers in the arizona, New Mexico
and utah portions of tribal land.
“rural electric cooperatives have pro-
vided reliable, affordable power to rural
communities for more than 75 years.
Today’s investments will help ensure our
electric infrastructure continues to deliver
reliable and affordable electricity for
years to come,” agriculture Secretary
Tom Vilsack said.
The funding will include $45 million
for smart grid technology and $73 mil-
lion for renewable energy projects, and
more than $213 million will benefit
american Indian tribes. It is slated to
build or improve 6,500 miles of electric
line throughout the u.S.
ConnectivityTribes, communities benefit from federally funded electric upgrades
“This funding is part of the Obama Administration’s vision for
a new rural energy economy and USDA’s commitment to creat-
ing economic opportunity in rural America,” Vilsack said. “In-
vestments in smart grid technologies will continue to modernize
our nation’s electric system and improve operational efficiencies.”
Other entities receiving funds include Tri-State Generation in
Colorado, which supplies electric power to La Plata County. This
electric cooperative will receive three loans of more than $318
million to finance upgrades and modification to existing genera-
tion facilities in various parts of New Mexico, and it also will
allow for upgrades to infrastructure in Colorado, Nebraska and
Wyoming.
Kit Carson Electric Cooperative in Taos will receive a $33
million loan to build 284 miles of distribution line and make
other system improvements. The loan also will fund more than
$2.2 million in smart grid projects and nearly $1.1 million for
service to American Indians. It will benefit 1,346 electric con-
sumers.
“The modernization of the electric grid in New Mexico is ex-
tremely important if our economy is going to grow, because if
we don’t have good electric service we can’t create new jobs,”
USDA Rural Development State Director Terry Brunner said.
SPRING 2014 • www.basinresourcesusa.com
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BASIN RESOURCES42
www.basinresourcesusa.com • SPRING 2014
E N E R G Y N E W S. . . . . . . . . . . . . . . . . . . . . . . . . .
Across the Nation
ConocoPhillips announced
Dec. 6 a 2014 capital expendi-
tures budget of $16.7 billion for
continuing operations globally.
The budget includes the com-
pany’s allocation of 55 percent of
funds toward operations in North
American and 45 percent toward
Europe, Asia Pacific and other in-
ternational businesses.
There will be an increased in-
vestment in the Permian Basin,
with the company promising to
spend approximately two-thirds of
development drilling program
funds in the Lower 48. This
would target development in “liq-
uids-rich, unconventional plays in
the Eagle Ford, Bakken and Nio-
brara, as well as conventional and
unconventional plays in the Per-
mian,” a press release from Cono-
coPhillips stated.
Exploration and appraisal activ-
ity will focus on the Niobrara and
Permian in the Lower 48, and the
Canol, Duvernay and Montney
plays in Canada. Internationally,
unconventional exploration spend-
ing will be directed toward
Colombia, Poland and China.
There will be a higher alloca-
tion of capital to Alaska compared
to 2013, reflecting increased
spending on the CD-5 develop-
ment and higher activity resulting
from improved fiscal terms from
the passage of the More Alaska
Production Act, the release said.
There also are plans to “ramp up in
operated conventional exploration
drilling programs in the deepwater
Gulf of Mexico and Angola.”
ConocoPhillips CEO Ryan
Lance said 2014 will be an impor-
tant year for the company. “Since
becoming an independent E&P
company, we have set out to de-
liver a unique value proposition of
3 to 5 percent volume and margin
growth with a compelling divi-
dend. To position the company
for these goals, we generated pro-
ceeds of more than $12 billion
from the disposition of nonstrate-
gic assets since the start of 2012,
while investing in programs to
drive future profitable growth,” he
said. “Today, we have an unparal-
leled inventory of opportunities
that will enable us to deliver or-
ganic growth from continuing op-
erations in 2014 and beyond. In
addition, our planned conven-
tional and unconventional explo-
ration activity should provide
opportunities that can keep us on
track for sustained growth and re-
turns.”
Budget announced
U.S. Energy Information Administration | Drilling Productivity Report
Permian play included in North American
2014 ConocoPhillips production
* ConocoPhillips 44
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BASIN RESOURCES44
www.basinresourcesusa.com • SPRING 2014
CHATSWORTH, Calif. – Capstone Tur-
bine Corporation, the world’s leading clean
technology manufacturer of microturbine
energy systems, announced today that it has
received orders for two Capstone C1000s
and an order for 25 Capstone C65 microtur-
bines to be used for oil and gas production
in the Permian Basin located beneath west
Texas and southeastern New Mexico.
According to an October 2013 article in
Investors Daily, the Permian Basin receives a
fraction of the press coverage accorded the
Bakken and Eagle Ford, but it has more pro-
duction potential than these two shale for-
mations combined. The Permian is not just a
shale oil play, nor is it a recently developed
basin. The Permian currently produces some
900,000 barrels per day of crude, about 12
percent of U.S. oil production. Some analysts
expect Permian production to more than
double by 2018 to 2 million barrels per day
– a level last reached during the 1970s. The
Permian Basin is projected still to contain re-
coverable oil and natural gas resources ex-
ceeding what has already been produced.
Industry experts estimate that, at current
prices, more than $3 trillion worth of oil
and more than $300 billion of natural gas
are yet to be extracted. These projections
dwarf the combined estimated reserves for
the Bakken and Eagle Ford.
Horizon Power Systems secured the order
for the two Capstone C1000 microturbines
to be used by an independent oil and gas
producer in the area. This marks Capstone’s
first multiple megawatt project in the Per-
mian Basin after previously installing multi-
ple C30s and C65s at project sites in the
region. The C1000s will replace unreliable
grid service from the local utility and be
used to power the client-owned electric grid.
This small local grid will supply power to
various well locations in addition to the field
operations office. The site is expected to be
commissioned in March.
Horizon Power Systems also ordered 25
In addition to ramping up exploration
and drilling, ConocoPhillips announced it
is on track to achieve its targeted produc-
tion of 1,600 thousand barrels of oil per
day, including 50 from Libya. The com-
pany expects to achieve this through
growth in the Lower 48, Canada, Europe
and Asia Pacific regions, it announced in a
prepared release.
The company also “anticipates utilizing a
portion of its cash balance to fully prepay
the $2.8 billion joint venture acquisition
obligation to its 50 percent owned FCCL
business venture. This obligation would
otherwise have been paid with interest over
the 2014 to 2017 time period,” the release
stated.
The capital budget also includes funding
for base maintenance, development of
drilling programs, major projects, and ex-
ploration and appraisal spending, as well as
corporate expenditures. Approximately 13
percent of the capital budget is allocated
for maintenance of the company’s high-
quality legacy base portfolio, including
2014 planned turnarounds.
Approximately 39 percent of the capital
budget is allocated to the company’s high-
margin development drilling programs,
with approximately 90 percent targeted to-
ward North America. Growth from these
development drilling programs should ac-
count for 600 barrels per day of produc-
tion by 2017 and offsets normal field
decline from the company’s producing as-
sets. The remaining one-third is targeted
toward other conventional and unconven-
tional opportunities, mainly in Alaska,
Canada, Norway and Western Australia.
ConocoPhillips continued from 42
PermIAn BAsIn shAle PlAy
Capstone Turbine gets multiple orders for customers
* Capstone 47
As part of President Obama’s plan to ensure a fair return to Amer-
ican taxpayers for federally-managed natural resources, the Bureau of
Land Management has sold 400 million cubic feet of crude helium
from the Federal Helium Reserve, generating $38 million in revenue.
The Jan. 17 sale implements the initial phase of the Helium Stew-
ardship Act of 2013.
Two firms received the bulk of the he-
lium: Air Products was awarded the largest
amount at 129,600 million cubic feet (Mcf )
while Praxair, Inc. was awarded 122,400
Mcf.
The full results of the sale are available at
the BLM Amarillo Field Office website at
www.blm.gov/nm/amarillo.
“W’'re pleased with the results of this helium sale," BLM Principal
Deputy Director Neil Kornze said. "It's critical that we get a fair re-
turn on this national resource that is so important for health care in-
novation and technology development. We are also proud to have
cleared the debt on this program in 2013, two years ahead of sched-
ule.”
The helium was offered at a price of $95 per Mcf, which is up
from $84 per Mcf in 2013, reflecting a change in methodology de-
signed to match market forces more closely, encourage industry con-
servation and provide a higher return for American taxpayers.
In September 2013, Congress passed the HSA to continue the
Federal helium program.
The HSA succeeds the Helium Privatization Act and allows for
continued operation of the federally managed helium reservoir and
pipeline near Amarillo, Texas, which supplies about 42 percent of
domestic demand for crude helium and about 35 percent of the
world’s demand. The intent of the HSA is to allow for a smooth
transition to private means of helium sourcing as the reserve is
steadily drawn down. The passage of the legislation allowed the
BLM to continue funding the helium operations.
The BLM had spent an initial $272 million to buy helium and
then stockpile it in federal storage.
The BLM has now paid off this debt,
which totaled about $1.4 billion of principal
and interest, to the U.S. Treasury two years in
advance of the 2015 deadline.
Helium is an essential resource for the
aerospace industry, optical fiber manufactur-
ing and medical use, including lung tissue vi-
sualization, heart catheterization methods and
medical lasers. The lighter-than-air gas is also used in aluminum he-
lium arc welding, scuba diving mixtures and national defense appli-
cations such as rocket engine testing, scientific balloons and blimps.
Surveillance devices and air-to-air missiles are additional military
uses for helium.
SPRING 2014 • www.basinresourcesusa.com
BASIN RESOURCES 45
Lighter than air mineral
BLM begins implementing Helium Stewardship Act
BASIN RESOURCES46
www.basinresourcesusa.com • SPRING 2014
You can add New Mexico to
the short list of U.S. states that
are utility-scale geothermal en-
ergy producers.
The new plant in the Animas
Valley, way down in the south-
western part of the state, is oper-
ating at a modest 4 megawatts
right now. But a second phase is
expected to kick the power pro-
duction up to more than double
that figure within the next year.
And New Mexico officials said
they’re hopeful more geother-
mal sites can be developed in the
state.
“This project opens the door
for an amazing future for geot-
hermal power in our state,” Sec-
retary of Economic Develop-
ment Jon Barela said in a state-
ment. “This major project has
been a tremendous economic
development driver for south-
western New Mexico, and other
projects, we hope, are on the
way to continue our develop-
ment of this resource.” As the
map immediately below indi-
cates, the state has at least a
handful of other locations that
are identified hydrothermal sites.
As enthusiastic as Barela was,
the Albuquerque Journal re-
ported that local residents had
some concerns about the plant.
Unlikely as it sounds, right
around the corner from the new
geothermal plant in this high
dry, ranching country is a com-
pany called AmeriCulture, which
bills itself as “one of America’s
largest tilapia hatcheries.” They
take advantage of the area’s nat-
urally hot waters to heat the
pools where they raises tilapia
fingerlings, so water quality is
understandably a chief concern.
State environmental officials
said they’ll be watching the
Another energy venture
New Mexico joins the geothermal power ranks
Capstone C65 microturbines to expand operations for multiple
existing clients in the Permian Basin. This repeat business demon-
strates a high level of customer satisfaction with Capstone microtur-
bines, helping to cement microturbine technology as a preferred
option in the U.S. oil and gas industry.
Capstone microturbines were chosen based on their reduced
maintenance costs, low exhaust emissions, and higher reliability than
traditional engine-based generation. The microturbines easily meet
Tier 4 emission standards without requiring after-treatment.
“The Permian Basin currently contributes about 14 percent of the
nation’s overall oil and gas production,” said Sam Henry, Horizon
Power Systems President. “Horizon is pleased to continue to expand
our presence in this dynamic area. This sale – the first multiple
megawatt Capstone microturbine installation in the Permian Basin –
follows several other C65s and C30s already in place there. Low-
emission, low-noise, and low-maintenance Capstone microturbines
are the go-to solution for running onsite equipment and meeting
customers’ power requirements in the Permian Basin.”
About Capstone Turbine Corporation
Capstone Turbine Corporation is the world’s leading producer of low-emission mi-
croturbine systems and was the first to market commercially viable microturbine energy
products. Capstone Turbine has shipped approximately 7,000 Capstone Microturbine
systems to customers worldwide. These award-winning systems have logged millions of
documented runtime operating hours. Capstone Turbine is a member of the U.S. Envi-
ronmental Protection Agency’s Combined Heat and Power Partnership, which is com-
mitted to improving the efficiency of the nation’s energy infrastructure and reducing
emissions of pollutants and greenhouse gases.
BASIN RESOURCES 47
SPRING 2014 • www.basinresourcesusa.com
Capstone continued from 44
www.basinresourcesusa.com • SPRING 2014
applications unless DOE finds that the proposed exports will not be
consistent with the public interest.”
The review includes a number of factors including the “impact on
domestic natural gas supplies and prices and the full range of
macroeconomic impacts of the proposed export,” Moniz wrote.
Environmental reviews also must be conducted.
While the exportation process is in its infancy, Udall said at least
three applications for exports have been approved, and now the U.S.
is just awaiting the infrastructure, such as ships and ports of entry
and export, to be completed.
In the meantime, Moniz stated that the Energy Department will
continue to review export applications “on a case by case basis as
expeditiously as possible.”
Natural Gas continued from 34
Gessing continued from 35
land. This push is being made in other western states with Utah
leading the way, Gessing said.
This is based on a movement in 1828, when Indiana, Illinois,
Missouri, Louisiana, Alabama and Florida persuaded the Federal
Government to return the lands to the states. It worked then. It is
Gessing’s hope that it will work again in the not too distant future.
BASIN RESOURCES48
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CCUUTT CCOOSSTT.. NNOOTT CCOOVVEERRAAGGEE
plant closely, but developer Cyrq
Energy is promising that a
closed-loop system poses no
threat.
In this closed-loop system,
the hot geothermal fluid is
pumped from the deep reservoir
to a heat exchanger, where heat
from the geothermal fluid is
transferred to a working fluid,
with a lower boiling point, con-
tained in a separate closed-loop
system.
This working fluid then
flashes and powers the turbines,
generating electricity. The geot-
hermal fluid is then re-injected
into the same deep reservoir to
be naturally reheated without
ever coming in contact with the
secondary working fluid or ex-
posed to air.
According to the state, the
first phase of Cyrq’s Dale Bur-
gett Geothermal Power Plant
cost $43 million to build. “The
second phase is scheduled to be
completed in 2014, for an addi-
tional $67 million,” the state
said. Cyrq on its website said
the plant ultimately would be
“capable of generating up to 20
megawatts (MW) of electricity,”
although power purchaser PNM
said it would be a 10-MW plant
and, as the map shows, the
NREL map at that forecasts 15
MW for New Mexico.
If prices remain high and de-
velopers continue drilling
through June, officials said the
state would be on track to break
the earnings of last fiscal year by
as much as $100 million.
Petroleum and natural gas
production make New Mexico
the third largest net energy sup-
plier to the nation, according to
the federal Energy Information
Administration.
www.FlyGreatLakes.com1-800-554-5111Four Corners Regional Airport
1300 W. Navajo St. Farmington, NM • 505-599-1395
www.IflyFarmington.com
Safe & Comfy
BasiN resoUrces50
www.basinresourcesusa.com • sPriNG 2014
advertisers directoryAllstate ..............................................48Viviana Aguirre
900 Sullivan Ave., 505-327-4888
B J Brown
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505-334-6177
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8205 Spain Rd. NE, Suite 209 C
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4100 E. Main St., 505-599-9047
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Antelope Sales & Service Inc. ..............235637 US Hwy 64Farmington, NM505-327-0918www.NMASSI.com
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Basin Occupational and Urgent Care ....441308 E 20th St.Farmington, NM505-324-0149www.basinhealth.com
Big Red Tool, Inc. ...............................382010 San Juan Blvd.Farmington, NM505-325-5045
Brady Trucking, Inc. ............................525130 S. 5400 EVernal, UT 84078435-781-1569Farmington, NM Division505-598-5580Grand Junction, CO Division970-263-8791Williston, ND Division701-572-1522
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Cascade Bottled Water & Coffee Service.........................28 & 48214 S. FairviewFarmington, NM505-325-1859 • 800-416-1859
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DXP Safety Services............................431678 Bloomfield Blvd.Farmington, NM505-325-SAFE(7233)www.dxpsafetyservices.com
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Twin Stars, LTD...................................51100 Iowa Ave.Bloomfield, NM505-632-92027169 Roswell Hwy.575-746-6690
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