Job Creation Listening Tour stop focuses on rail infrastructure, marginal well production

• Brian Egolf says the interest shown in rail infrastructure could put the the topic in the state government wheelhouse.
• Four Corners Economic Development will contract with consultants about rail potential.
• Approximately 70 percent of San Juan Basin wells are in marginal condition, a local businessman says.

FARMINGTON — Local industry leaders brainstormed ideas to create jobs and grow the economy in Four Corners with state legislators at a statewide Job Creation Listening Tour on Wednesday.

Several dozen business community members met with state House Speaker Brian Egolf, D-Santa Fe, and six state representatives at San Juan College to talk about the potential of rail infrastructure and assistance for marginal well production, among other subjects. 

Egolf said though the listening tour opens an important avenue between people on the front lines of the local economy and lawmakers, the Four Corners community needs to be able to provide “a clearer direction from within the community about where they want to go” for the Legislature to help. 

“I guess they’re still thinking about what industries they want, but history tends to show that when communities have a huge disruption in the economic base, the ones that survive are the ones that most quickly move or most quickly decide and attract new industry to make up the loss,” Egolf said after the event. “That’s why the last question (posed by the legislators at the event) asked, ‘What can we do to help you plan?’”

The potential of adding infrastructure to accommodate a railroad was a recurring theme throughout the event, which lasted more than 90 minutes. Tom Taylor, a board member of Four Corners Economic Development executive committee, said a short rail line is on the FCED’s radar and has been for a few years.

“Something that we’ve recently done is sent out (a request for proposals) to consultants to do a real study for the possibility of rail here and the volume of materials we can ship out and ship in to here,” Taylor said. “We did a sort of off-the-cuff survey of that a couple years ago, but with this one, we’re going to try to be a little more formal.”

Steve Grey, the Navajo Transitional Energy Company’s governmental and external affairs director, emphasized the importance of including the Navajo Nation and the Bureau of Indian Affairs in talks about rail infrastructure, and Jay Paul McWilliams, president of Logos Resources, said developing economic incentives for rail companies to do business in Four Corners would need to be addressed.

Egolf said that, given the fact that the rail discussion has been some four years in the making, it could “fall right into the government wheelhouse” after lawmakers heard such interest from the event.

Tom Mullins, engineering manager of Synergy Operations, brought up what Egolf called “a really interesting idea” about state support for marginal wells.

Mullins said approximately 70 percent of the oil and gas wells in San Juan Basin are marginal in nature, “meaning that they’re not a new investment, but they’re an existing investment.”

“It’s kind of like your old car,” Mullins said. “You want to keep your old car or old truck functioning as much as possible.”

Mullins suggested that state assistance be provided to establish electrical generators at marginal wells to put the electricity produced into the grid.

“I’d like to see that be incentivized,” Mullins said. “In areas where we can no longer produce those marginal natural gas wells because of just the economic conditions, we can then set electrical generators and put electricity into the grid here in New Mexico and maintain those wells producing.”

Mullins also suggested a severance tax credit for marginal wells “to continue their life.”

Other topics brought up at the event included the cost of federal regulations on local businesses, the drilling permit backlog at the Bureau of Land Management, and the “brain drain,” the effect of people educated in the Four Corners leaving the local economy for other opportunities elsewhere. 

Egolf is hosting a number of other listening events throughout the state over the coming months. Input from listening events in 2016 helped spur the introduction of six pieces of legislation, four of which became law, according to a press release from Egolf’s office.

Megan Petersen covers business and education for The Daily Times. She can be reached at 505-564-4621.