Want to grow your economy? Get off your laurels
Maybe the recession is loosening its grip. We’re starting to see some new economic development prizes around the state.
The most intriguing, of course, is Pegasus Global Holdings’ $1 billion project to create a city without residents to test products. Hobbs (motto: Recession? What recession?) took this plum away from Las Cruces. Newspapers in the City of Crosses seemed genuinely surprised and engaged in some unsportsmanlike commentary when their team lost.
Some of us weren’t surprised. Business people tend to be highly focused and unsentimental when they’re making these decisions, and the Hobbs story offers lessons for every small town looking for its future.
The day of the Pegasus announcement, I was sitting in a packed meeting of the New Mexico Biotechnology and Biomedical Association, where execs of six biofuels startups talked about their operations.
Massachusetts-based Joule Unlimited Technologies recently broke ground in Hobbs on a four-acre demonstration plant that will produce ethanol from microorganisms.
“Hobbs offered us everything we were looking for — sunlight, sources of waste CO2 and large amounts of non-potable water,” said the Joule’s Director of Regulatory Affairs David Glass, adding that the state’s incentives were also good. “We’ve had excellent support from Hobbs and Lea County. We’ve had a very good reception here.”
Eldorado Biofuels, in Jal, is cultivating algae in produced water, and from what it calls Jalgae will extract oil and create feed for cows.
“One reason we’re here is all the ingredients we need are here,” said CEO Paul Laur. That includes sun, produced water, surface area, nitrogen (cow pies), phosphorus (potash mines), carbon dioxide (pipelines from northeastern New Mexico) and a lack of predators.
Predators? Even algae has predators — viruses, bacteria, fungi and protozoa — which is why these companies like the desert. Water produced from oil fields near Jal is similar to sea water, he said, although some toxic elements must be removed.
“We like to think of the algae industry as a keystone industry for regular economic development,” Laur said. “We hope to be a major employer in Jal in coming years.”
Santa Fe-based New Solutions Energy builds algae-growing systems, including commercial systems that farmers and ranchers can use to feed cattle and chickens. The company has a 200,000-gallon pilot project near Spaceport America. And it’s training future employees at Santa Fe Community College.
Incitor is producing biofuels from any form of waste. Its first production facility will be in Milan, in western New Mexico, said its President and CEO John Elling.
The best known of these companies, Sapphire Energy, has facilities in Las Cruces, but its 300-acre commercial pilot facility will be in Columbus.
Hobbs, Jal, Milan and Columbus aren’t exactly garden spots. Obviously, some of the companies find the necessities in these communities — primarily sun and affordable acreage — and some of these new energy companies have a symbiotic relationship with the old energy companies. Another common denominator is a warm welcome and incentives.
“Siting,” said Elling bluntly, “is about incentives. The whole industry right now is incentive driven.”
This is a promising, clean industry for the state, and it will spend millions in private money in New Mexico this year. If you think incentives are “corporate welfare,” you might want to reconsider.
Bottom line, however, is that Hobbs has developed a welcoming, can-do culture not often seen in New Mexico. Hobbs, like Rio Rancho, has a track record of streamlining paperwork and all-around hustling to make sure companies get their operations up and running quickly.
Economic development is not a beauty contest. Las Cruces expected to get the bouquet based on its charm, scenery and university. Hobbs offered its slate of satisfied customers. Given the choice, companies will marry the girl Mom likes and not the prom queen. They can’t afford not to.
© 2012 New Mexico News Service