BusinessBusinessSUNDAY, JANUARY 13, 2013 HOBBS NEWS-SUN 1199

LEVI HILLNEWS-SUN

Intercontinental Potash Corpora-tion recently announced its accom-plishments for 2012 and projectionsfor 2013. Among them is a filing fortheir environmental impact studyin late 2013 and approval to start byearly 2014.

ICP president and chief executiveofficer Sidney Himmel commentedon the company’s goals and the envi-ronmental study.

“Based on our current projectdevelopment schedule, we remainon pace to submit the draft EIS tothe (Bureau of Land Management)for final review in late 2013,” Him-mel stated in a release. “Notwith-standing any unforeseen delays,BLM clearance to proceed with con-struction of the mine and process-ing plant is expected to be grantedprior to the end of March 2014.”

In early 2012, the Bureau of LandManagement commenced the publicscoping process for ICP’s prepara-tion of the environmental impactstudy. The company also hiredWalsh Environmental Scientistsand Engineers LLC to conduct atwo-year biological resource base-line survey for the project.

Wildlife surveys included lesserprairie-chicken leks and pitfall trap-ping for the dune sagebrush lizard.According to the company, the find-ings of the surveys confirmed thatICP’s operations will have little, if

any, impact on the local wildlife andvegetation.

The proposed underground mineis slated to be located some 30 mileswest of Jal, with an above groundoperations center in the area andthe underground mine extendingout from that point.

The company plans to mine poly-halite deposits some 1,500 feet belowground, from which sulphate ofpotash, used in fertilizer, will beextracted.

The company completed a prefea-sibility study on the Ochoa poly-halite project last year that showedthe viability of the project. Accord-ing to the company, the study showsthat the project’s full-capacity capi-tal cost will be around $706 million;have an operating cost of $147 perton; 139 million tons of recoverablepotash reserves in the proven 40-year mine plan and an additional205 million tons of potash not in the40-year plan; and have an after-taxnet value of $1.28 billion.

Last year the company also signedits first agreement with Yara Inter-national ASA to purchase 30 percentof the product for the first 15 yearsof operation.

Another piece of the puzzle for ICPwas confirming its processing pro-tocols for extracting the sulphate ofpotash from the polyhalite deposits.

According to the company it hassuccessfully implemented end-to-end processing for the polyhalite,producing 52 percent grade sulphateof potash.

“Led by Hazen Research, Inc.’sconsulting team at their facilities inGolden, Colo., the batch scale testwork for the Ochoa polyhalite proj-ect progressed through a series ofprocessing steps, including com-minution, washing, calcination,leaching and crystallization,” therelease states. “The test workproved very successful and con-firmed that the process is capable ofproducing a high-quality SOP prod-uct from the company’s polyhaliteresources.”

Having proven the product can beviably extracted and processed,Himmel said the company is nowmeeting with capital investors andfunding sources to kick the projectoff.

“Having succeeded in materiallyde-risking the Ochoa Polyhalite Pro-ject from an operational perspectiveover the past year, ICP’s executivemanagement team is now concen-trating its efforts on defining andimplementing a capital plan to sup-port our project funding require-

Potash project eyes 2014 start

LEVI HILLNEWS-SUN

Lovington native Robert Fierro, 29,left Lea County in 2002 and inDecember he returned to his home-town a certified civil engineer with aplan for helping Lovington grow.

Fierro studied civil engineering atNew Mexico State University, gradu-ating in 2006. He then worked sixyears with Wilson and Company, anengineering firm in Albuquerque.He is a certified civil engineer andan apprentice surveyor working onhis professional certification as asurveyor.

“I have two homes, one here (Lov-ington) and one there (Albu-querque), and I will be travelingback and forth,” he said. “I do likethis area. I want to better the com-munity as far as any developmentthat comes in. I want to be a part ofthat because I have been in Loving-ton and I haven’t seen it grow, but Iwould like to.”

Fierro isn’t focused just on hishometown. He wants to work withall Lea County communities. Duringhis time at Wilson, Fierro workedwith communities like Belen, Antho-ny and Grants on roadway designand drainage management plans.

He said he decided to venture outon his own because he wanted towork closer with his clients thanworking for a large company.

“It is kind of risky, but I felt likeI could manage projects a littlemore effectively,” he said of start-ing his own company. “There weresome drawbacks to working forsomeone larger. I felt I would beable to benefit communities theyweren’t focusing on.”

Fierro and hiscoworker, ConradRoybal, a licensedsurveyor, will beworking in boththe Hobbs areaand Albuquerque.And if he shouldrun into some-thing he hasn’tseen before, Roy-bal said he has thehelp of a mentor,

Alex Abeyta, who has more than 30years in civil engineering in variousNew Mexico communities.

Fierro said his company’s low over-head will allow him to provide serv-ices locally at lower rates than out-of-town or out-of-state firms.

“A lot of companies that come hereare not local and I feel there could bebetter communication between thecommunity and engineer,” he said.“I have low overhead costs and somethat come here are a little moreexpensive. I can provide the sameservice at more affordable rate.”

Fierro said he hasn’t picked up anywork in Lea County yet, but has beenmeeting with city officials and doeshave contracts to fulfill in Albu-querque.

“I would like to work on new hous-ing development,” he said.

The office of Fierro and CompanyEngineering in Lovington is at 1601S. Main. For more information, con-tact Fierro at 505-503-9546 or atwww.fierrocompany.com, whereinformation about his qualificationsand experience can be found.

Levi Hill can be reached at 391-5438 orreporter2@hobbsnews.com.

Lovington nativeback home to openengineering office

Fierro

Oil, gas industry decriesMatt Damon movie

FARMINGTON N.M. — Oil and gasindustry officials are waging a publicopinion battle against critical voicescoming from Hollywood.

"Promised Land," a Focus Featuresmovie starring Matt Damon, wasreleased Friday. Oil and gas industryofficials say its negative portrayal ofnatural gas drilling misses the mark.

In the film, Damon plays a landmanfor a fictional oil and gas corporationthat moves into an idyllic Pennsylva-nia farm town. Damon goes door-to-door selling innocent residents on thebenefits of leasing their land fordrilling.

Along the way, Damon offers a bribeto a local politician, shares beers withthe locals and flirts with a highschool teacher.

It all comes down to a vote at thehigh school gym.

The vote scene isn't too far off fromreality: Communities from Pitts-burgh to Longmont, Colo., have votedto ban hydraulic fracturing, or "frack-ing," a controversial industry prac-tice. And development holds out thepossibility of higher tax revenues topay for schools, and millions for indi-vidual landowners — not unlike thepitches heard in oil and gas patches

across the country.For local industry officials,

"Promised Land" threatens to have anoversized influence on the debateover fracking, a drilling process theysay is critical to producing oil andgas.

"I've never seen Hollywood depictthe oil and gas business in a positivelight," said Steve Dunn, drilling andproduction manager at Merrion Oiland Gas Co., a Farmington company.

Dunn said he had never heard of aninstance of fracking-related watercontamination -- a concern common-ly raised by fracking opponents -- inhis 40 years in the business.

"The environmental movement hasdone an excellent job of spreadingsuspicion and fear in an unwarrantedway," he said. "It's an effective tool."

Industry officials say fracking issafe and effective, and concernsraised in Hollywood and elsewhereare overblown. The procedureinvolves pumping high volumes ofwater, sand and chemicals under-ground to break apart rock.

"This is a fictional movie that does-n't factually portray the industry,"said Doug Hock, a spokesman forEncana Corp., a Canada-based driller.

Encana has drilled several wellsseeking oil in the Mancos Shale, ageologic layer in the San Juan Basin.

Like nearly all wells in the basin,Encana's wells are drilled with frack-ing to increase production.

"Shale has to be fracked," said JohnByrom, president and chief executiveat D.J. Simmons Inc., a Farmingtonoil and gas firm. "Without fracking,very few wells could be drilled in theSan Juan Basin and in the UnitedStates."

In Farmington, which has dozens ofwells within city limits, many drilleddecades ago, fracking is old news.

"We've been drilling and frackingwells here since the early 1960s,"Byrom said. "It just hasn't been anissue here at all."

Mayor Tommy Roberts, an oil andgas attorney, said he had neverreceived a complaint regarding frack-ing in city limits. He noted many ofFarmington's wells were drilled yearsago.

Mike Eisenfeld, New Mexico energycoordinator for the San Juan CitizensAlliance, stopped short of condemn-ing fracking but said more publicinformation is needed.

"There's probably some valid con-cerns with fracking over the chemi-cals used, the long-term effects andthe fact that the industry doesn't haveto comply with some basic environ-

Oil and gas roundup

AP PHOTOMatt Damon and his latest Hollywood movie, “Promised Land,” areunder fire on this billboard in upstate New York. The billboard ridiculesDamon's anti-fracking premise and its claims that fracking can causewater to light on fire. The billboard was erected by documentary filmmaker Phelim McAleer, whose pro-fracking film, FrackNation, airs onJan. 22 on Mark Cuban's cable television channel, AXS. McAleer said heput the billboard up because he wanted the public to know that therehad been flammable water in the United States for at least several cen-turies before fracking, "despite misleading information from Hollywoodcelebrities and environmental activists.

WASHINGTON (AP) — Nearly halfthe 70 employees at a Ford dealer-ship in Clarksville, Ind., have beenout sick at some point in the pastmonth. It didn’t have to be that way,the boss says.

“If people had stayed home in thefirst place, a lot of times that spreadwouldn’t have happened,” saysMarty Book, a vice president at Car-riage Ford. “But people really wantto get out and do their jobs, andsometimes that’s a detriment.”

The flu season that has struck early

and hard across the U.S. is puttingbusinesses and employees alike in abind. In this shaky economy, manyAmericans are reluctant to call insick, something that can backfire fortheir employers.

Flu was widespread in 47 states lastweek, up from 41 the week before,the Centers for Disease Control andPrevention said Friday. The onlystates without widespread flu wereCalifornia, Mississippi and Hawaii.

Flu season puts businesses,employees in a bind

Potash like that found in southeast New Mexico is mostly for use in fertilizers. Potash is the commonname for various mined and manufactured salts that contain potassium in water-soluble form.

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RECORDS 20HOBBS NEWS-SUN • SUNDAY, JANUARY 13, 2013

RIG COUNTJanuary 10, 2013 Lea County

Permian Basin

U.S. Total

ThisWeek

473

467

1,761

1,762

1,987

475

ThisWeek

ThisWeek

LastWeek

LastWeek

LastWeek

YearAgo

YearAgo

YearAgo

5 10 15 20 25 30 35 40 45

25 50 100 200 300 400 500 550 600

400 600 800 1000 1200 1400 1600 1800 2000

33

20

31

HOUSTON (AP) — Oilfieldservices company BakerHughes Inc. says the numberof rigs actively exploring foroil and natural gas in the U.S.dropped by one for a secondconsecutive week to settle at1,761.

The Houston-based companysaid in its weekly reportFriday that 1,323 rigs wereexploring for oil and 434 forgas. Four were listed as miscel-laneous. A year ago, BakerHughes counted 1,987 workingrigs.

Of the major oil- and gas-pro-ducing states, Louisianagained five rigs, Oklahomaincreased by four, Alaskaadded two and California,North Dakota, West Virginiaand Wyoming each gained onerig. Meanwhile, Pennsylvanialost six rigs while Coloradoand Texas each dropped two.Arkansas and New Mexicoremained unchanged.

The rig count peaked at 4,530in 1981 and bottomed at 488 in1999.

mental regulations" including the SafeWater Drinking Act and portions of theClean Water Act, Eisenfeld said.

He added, "The claim that it's done safely,that needs to be supported with moredata."

"Promised Land" follows on "Gasland," a2010 HBO documentary that helped sparkthe fracking debate. An industry-backeddocumentary, "Spoiled," was in large parta reply to "Gasland."

The Damon film makes few factualclaims about fracking, instead weaving atale of a rapacious company using a smalltown for profit.

In the end, the film's box office perform-ance may help determine how influentialit becomes. On that score, "PromisedLand" is off to a slow start, finishing 10thamong films last weekend.

"Promised Land" made $4.3 million, aver-aging a slim $2,573 a theater. It finished farbehind the weekend's top film, "TexasChainsaw 3-D."

"Promised Land" is showing at Allen 8Theatres, 1819 20th St.

Chevron expects fourthquarter profits to improve

SAN RAMON, Calif. (AP) — ChevronCorp. expects fourth-quarter earnings tobe "notably higher" than third-quarterprofit.

The company said Thursday that itsfourth-quarter results will be helped bybigger gains on asset sales and more oiland gas production.

Chevron is the nation's second-biggest oilcompany, and it earned $5.25 billion, or$2.69 per share, in the third quarter.

Analysts expect the company to reportearnings of $3.03 per share when it postsfourth-quarter results on Feb. 1.

The San Ramon company reported a $1.4billion gain from the 2012 swap with RoyalDutch Shell of stakes in natural gas fieldsoff the coast of Australia.

U.S. oil and gas production rose 39,000 bar-rels per day during the first two months ofthe quarter on recovery from HurricaneIsaac and acquisitions that Chevron madein the Permian Basin of Texas.

International production rose even more,up 107,000 barrels per day in the first twomonths of the quarter, due to the lack ofplanned maintenance in Kazakhstan andthe United Kingdom, Chevron said.

Chevron got an average of $97.61 per bar-rel for U.S. oil during the first two months,up 27 cents per barrel from the third quar-ter but below the $105.37 it received in thefourth quarter of 2011. It realized $3.14 perthousand cubic feet of U.S. natural gas, up51 cents from the third quarter but downfrom $3.62 in 2011's fourth quarter.

International prices were mixed in thefirst two months of the fourth quarter, asChevron got more for gas but slightly lessfor oil than a year earlier.

Refining margins "decreased significant-ly" both in the U.S. and overseas comparedwith the third quarter, Chevron said.

The company said oil for refining in theU.S. declined from the third quarter most-ly due to the continued shutdown of acrude oil unit in Richmond, Calif. Thecompany has said it expects the unit to beworking early this year.

Before Thursday's update, shares ofChevron rose 93 cents in regular trading toclose at $110.47. In extended trading, theywere up another 74 cents to $111.21.

Chesapeake CEO to takeno bonus for 2012

OKLAHOMA CITY (AP) — ChesapeakeEnergy Corp. disclosed Monday that CEOAubrey McClendon will not take a bonusfor last year and that the company is limit-ing his use of corporate aircraft.

The oil and gas company stripped

McClendon, its founder,of his chairman title inJune after a series ofcorporate-governanceissues upset investors.Those included a reportthat he took a personalloan from a companythat was doing businesswith Chesapeake.

Chesapeake has alsobeen struggling finan-cially, due in part to aplunge in natural-gas prices. It has cutjobs, sold assets and disclosed in a regula-tory filing Monday that it is substantiallyreducing its executives' annual incentivecompensation for 2012.

That includes McClendon going withouta bonus, at his own recommendation. In2011, he received a bonus of $1.95 million,unchanged from the previous two years.

The company also said that it is develop-ing compensation plans for 2013 tied toperformance.

Chesapeake's board said it is cuttingback on other executive perks. It is elimi-nating the personal use of the companyaircraft by all executives other thanMcClendon, whose own allowable use ofthe aircraft was cut in half. He will have toreimburse the company for any costs over$250,000 a year. He was previously cappedat $500,000.

The board, which includes five new mem-bers and the chairman who replacedMcClendon, is trying to take tighter con-trol of the company and allay investorfears.

It has hired an outside consultant to helpidentify ways to cut expenses. And it hasreduced the company's planned contribu-tions for charitable, trade and politicalcontributions.

Chesapeake's shares gained 17 cents toclose the day at $17.62 but fell 10 cents inafter-hours trading. In the last 12 months,it is down about 27 percent.

Colorado gives initial OKof rules to limit drilling

DENVER (AP) — Colorado regulatorsgave initial approval Wednesday to rulesmeant to limit the effects of oil and gasdrilling on homes, including a ruleincreasing the distance that rigs must befrom occupied buildings.

The rules approved by the Colorado Oiland Gas Conservation Commission areexpected to take effect this summer.

One requires wells to be 500 feet frombuildings, up from a 350-foot buffer pro-posed by the commission earlier.Environmentalists wanted even biggerbuffers, while farmers and homebuilderswere among those saying the larger dis-tances could limit development or hurtloan values on their land.

Also Wednesday, state health and naturalresource officials announced the launchthis summer of a study of how oil and gasemissions behave and their characteris-tics in areas along the northern FrontRange, which has become a hotbed fordrilling. A second phase would study pos-sible health effects.

Environmentalists said the state-spon-sored studies are too little, too late, andamount to using people as "lab rats" todetermine if they may be suffering healthproblems because of drilling.

The actions came on the last day of athree-day hearing to consider updating thestate's oil and gas rules.

Earlier this week, the oil and gas com-mission approved rules requiring ground-water sampling both before and afterdrilling to ensure drinking water supplieshaven't been contaminated.

The rules that got preliminary approvalWednesday include requirements for oper-ators who plan to drill within 1,000 feet ofoccupied buildings to meet new measureson limiting noise, odor, dust and emissionsand to protect against spills. They'd alsohave to give expanded notice to residents.

Plans to drill within 1,000 feet of schools,hospitals or other high-occupancy build-ings would trigger a hearing in front ofthe commission.

State officials said testimony during therulemaking hearing reinforced views ofindustry and environmental experts thatbetter science is needed for oil and gasemissions.

Iraq threatens to seize oilshipments, sue dealers

BAGHDAD (AP) — Iraq has threatened toseize oil exports made without its consentand sue companies dealing in what it seesas contraband crude just days after thecountry's self-rule Kurdish region beganunilaterally exporting oil.

The spokesman for Iraq's Kurdishregional government, Safeen Dizayee, con-firmed Friday that the largelyautonomous territory began shipping oilto Turkey in the past few days.

The move appears to have triggeredBaghdad's threat. A statement quietlyposted a day earlier on the website of theState Oil Marketing Organization warnedthat Iraq may confiscate what it sees as oilcargoes "smuggled across borders," andsue sellers, buyers and companies thattransport the crude.

The statement said SOMO "is the solelegally authorized entity that has theexclusive right to export and import crudeoil, gas and oil products" in the OPECmember nation.

A hard line from Baghdad over the ship-ments could exacerbate simmering ten-sions between Iraq's central governmentand the Kurds. The two sides appeared onthe brink of war just two months ago afteran exchange of fire prompted them todeploy troops and heavy weapons alongtheir disputed internal border.

Iraq's central government and the Kurdshave been at loggerheads for years abouthow to manage Iraq's vast oil wealth.

Since the 2003 U.S.-led invasion, theKurds have struck more than 50 deals withforeign oil companies, including ExxonMobil Corp., Chevron Corp. and France'sTotal S.A. Baghdad considers the dealsillegal. It believes the central governmentshould manage the country's oil policy andwants all exports to travel through state-run pipelines.

Dizayee said the Kurds are shipping thecrude from the Taq Taq oil field intoTurkey by tanker truck. Much of theexported oil will be refined and thenshipped back to the Kurdish region, whichhas a pressing need for fuel during the coldwinter months, he said.

He insisted that the Kurds remain opento talking with Baghdad about the newexports within the framework of a com-prehensive negotiation.

BP seeks judge's rulingon size of Gulf oil spill

NEW ORLEANS (AP) — BP urged a fed-eral judge Friday to rule the companycan't be penalized for millions of gallons ofoil that spewed from its blown-out well butwas captured before it could spill into theGulf of Mexico in 2010.

A court filing by London-based BP PLCsays workers captured more than 34 mil-lion gallons — 810,000 barrels — of crudeand either burned it or shipped it to shorebefore it could enter the Gulf waters.

The company asked U.S. District JudgeCarl Barbier to rule that the collected oilcan't be counted in calculating the compa-ny's Clean Water Act penalties, whichcould amount to billions of dollars.

A criminal settlement with the JusticeDepartment in November didn't resolvethe government's civil claims against BP.

In Friday's filing, BP lawyers also vowedto prove at trial that the federal govern-ment overestimated the size of the spill.

"Today's motion is the first step for BP inmaking that case," BP spokesman ScottDean said in a statement.

Rig count falls by one

Oilfrom PAGE 19

McClendon

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Public records

NEW YORK (AP) — Taco Bellis testing a new value menu thatcould put it in more direct com-petition with the Dollar Menu atMcDonald’s.

The Mexican-fast-food chain istesting a “$1 Cravings Menu” intwo markets that lists nineitems, including three newofferings. If successful, it wouldreplace the chain’s currentvalue menu, called “Why PayMore,” with items priced at 89cents and 99 cents. The $2 “mealdeals” on “Why Pay More” arenot offered on the new menu.

Chris Brandt, vice president ofmarketing for Taco Bell, said the

tests began in October inFresno, Calif., and Knoxville,Tenn., and will continue for atleast another couple of monthsbefore a decision is made onwhether to roll out the menumore widely. He said the idea for“$1 Cravings” came about afterconsumer research showed din-ers felt like they were “forced toeat off the value menu,” ratherthan wanting the items itoffered. So Taco Bell decided tosplit the “$1 Cravings” menuinto what it considers to be fiveuniversal cravings: beefy,cheesy, spicy, crunchy and sweet.

Although $1 seems like pocket

change, it reflects a slight pricehike for Taco Bell comparedwith the “Why Pay More” menu,which was introduced in 2008.

Wendy’s, based in Dublin,Ohio, also revamped its valuemenu recently, replacing its 99-cent menu with a “Right SizeRight Price” menu that chargesup to $1.99. Under the newmodel, Wendy’s has more flexi-bility in charging prices at atime when costs for ingredientslike beef are climbing andsqueezing profit margins. Lastyear McDonald’s introduced an“Extra Value Menu” with itemscloser to $2.

Taco Bell testing ‘$1 Cravings’ value menu

ments,” Himmel stated. “Tothat end (we) have been travel-ing the globe meeting with abroad range of capital marketspecialists and direct fundingsources, including many ofthe world’s largest investmentbanks, private equity groups,institutional money man-agers, family offices, hedgefunds and sovereign wealth

funds, among others.“The level of interest

expressed by many of thesegroups for our Ochoa poly-halite project has been strong,fortifying confidence in ourability to raise the capitalrequired to construct and sup-port commercialization of ourmining and ... processing facil-ities in New Mexico.”

Levi Hill can be reached at 391-5438 or reporter2@hobbsnews.com.

Potashfrom PAGE 19