Current regulatory uncertainty and permitting delays are two of the biggest factors negatively impacting Permian Basin oil and gas production, an industry leader has told a U.S. House committee. Steven Pruett, chairman of the Independent Petroleum Association of America, noted that exploration activity in the Permian Basin, stretching for 250 miles from western Texas to southeast New Mexico, is presently down due to a decline in investment. “The number of banks loaning money to oil and gas companies is half what it was 5 years ago,” Pruett told members of the Energy and Commerce Committee’s Subcommittee on Energy, Climate, and Grid Security. Pruett said the decline was attributable to environmental, social, and governance investing mandates, as well as loan losses. He additionally asserted that “permitting delays for infrastructure development” has negatively impacted projects. Continued Pruett: “Without new pipelines, processing plants, and export terminals, oil and gas production in the U.S. will not grow.” Pruett called for greater Congressional oversight of the Environmental Protection Agency and Department of Interior, among other federal agencies, “as it relates to regulations affecting the oil and natural gas industry broadly defined from the wellhead to the consumer.” The founder and chief executive officer of Elevation Resources, which is based in Midland, Texas, Pruett also addressed the ongoing lack of labor confronting the oil and gas industry. “Negative messaging by the Biden Administration discourages people from joining our industry,” Pruett asserted. “My generation is approaching retirement, setting the oil and gas industry up for the ‘great crew change,’” said Pruett. But even though wages have generally increased by some 15% in the last two years, “there are not enough young people to replace my generation in the oil industry.” Add in one further challenge to the industry: “Months-long delays in completing or repairing wells and facilities due to manpower and equipment shortages.” Altogether, said Pruett, drilling and completion costs just for his company alone have risen from $8 million in 2021 to $11 million per well in 2022 “due to escalating input costs, including steel and labor, while liquid prices have reduced our returns, thus limiting drilling activity.” Other industry leaders providing testimony to the subcommittee contended that the Biden Administration through its regulatory policies is intent on reducing oil and gas production in the coming years. In taking testimony from industry leaders, House Energy and Commerce Committee Chair Cathy Rodgers said a decline in Permian Basin oil and gas production would mean three things: “Lost jobs. Lost revenues. And lost livelihoods.” By Garry Boulard
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Work could begin later this year on a 243,000 square foot industrial building that will go up at the intersection of Scottsdale Road and Thunderbird Road. The Phoenix-based Creation company has just announced the purchase of some 18 acres inside the 8.6-square mile Scottsdale Airpark to build the project. A company specializing in industrial, mixed-use, and office development, Creation will spend around $60 million to build a facility with a height of 32 feet, featuring 51 truck doors. The project will be built as a Class A logistics/manufacturing facility. In a statement, Grant Kingdom, principal of Creation’s Mountain West region, said the building upon completion could attract tenants ranging from “companies in the pharmaceutical, aerospace, electric vehicle and semiconductor section,” as well as “traditional distribution and showroom users.” Founded in 2018, Creation has built a variety of mixed-use developments across the country, and has been particularly active in the West, with projects in Texas, Arizona, Colorado, and California. By Garry Boulard The Houston-based Dinerstein Companies has announced plans to build a 371-unit apartment complex in downtown Longmont that would be built out in ten separate three-story buildings. The project will be in a mostly open space section of downtown Longmont, populated with some warehouse and industrial facilities, at 301 First Avenue. To be called Atlas Longmont, the complex will see apartments ranging in size from studios to three bedrooms, starting at 541 square feet and topping out at 1,411 square feet. The complex will additionally include a two-story leasing and amenity building, as well as an outdoor pool, several spas, a clubhouse, and co-working space. If all goes as anticipated, work will begin on the project later this year, with an overall completion date of spring 2026. A firm specializing in multi-family development and management, Dinerstein Companies was founded more than 60 years ago and has properties in every region of the country, including Arizona and Colorado. By Garry Boulard Treasury Secretary Janet Yellen thinks if the government’s debt ceiling is not raised any time soon, it could have a devastating impact on investments, mortgage payments, and credit card interest rates. Speaking before the National Association of Counties’ annual legislative conference, Yellen noted that “Since 1789, the United States has paid all our bills on time. It should stay that way.” Yellen asserted that a “default on our debt would produce an economic and financial catastrophe,” noting not only that people could lose jobs, but that “household payments on mortgages, auto loans, and credits cards would rise, and American businesses would see credit markets deteriorate.” The Treasury Secretary added that on top of such possible economic calamities, a failure to raise the debt limit would make it “unlikely that the federal government would be able to issue payments to millions of Americans, including our military families and seniors who rely on Social Security.” All such dire consequences could be avoided, Yellen said, by Congress voting to “raise or suspend the debt limit.” “It should do so without conditions,” she continued. “And it should not wait until the last minute.” Negotiations are currently underway between the White House and Congressional leaders regarding the possibility of raising the debt ceiling and what, if any, government programs would be reduced or limited in reaching that goal. By Garry Boulard A downtown Albuquerque property that at least somewhat symbolizes the challenges of the nightclub industry is on the market. Located at 211 Gold Avenue SW, the nearly 5,000 square foot, two-floor structure, has recently been the home to the Tantra Nightclub, which advertises such features as two dance floors (one for club music and the other for hip hop), a hookah bar with premium shisha, and a “chill zone with a pool table.” Before the building housed the Tantra, it was home to another night spot called the Lotus Nightclub, and was yet another drinking, dancing, and social gathering place before that. In its distant pre-nightclub years, the building served as offices to the real estate firm Chavez and Company. Classified as a Class C building, the structure has undergone several renovations over the last two decades, the most recent being in 2022. Located in a section of downtown populated with offices, restaurants and coffee shops, the property is listed with the real estate firm of Resolut RE/Commercial Real Estate. By Garry Boulard Historic Farmhouse in Southern Arizona to be Preserved as Part of a New Shopping Center Project2/21/2023 Work building a new shopping center in the town of Laveen, Arizona is also expected to soon include restoration of the historic Hudson Farmhouse. That nearly century-old structure near the intersection of 59th Avenue and Dobbins Road, is one of the mainstays in a southwest Arizona town that has seen its population jump from less than 1,000 a generation ago to well over 50,000 today. Located 8 miles to the south of downtown Phoenix, Laveen has undergone unprecedented development in the last few years, and is currently seeing the construction of a new walkable shopping and entertainment space called the Laveen Towne Center. That project is being undertaken by the Vestar commercial real estate company, which has offices in Phoenix and Los Angeles, and is expected to cost upwards of $130 million to complete. Ultimately, the new center will make up around 400,000 square feet of retail space. Members of the Phoenix City Council have now given their unanimous approval to reimbursing Vestar for up to $25 million in infrastructure improvements related to the project. Plans call for the Hudson Farmhouse to be repurposed as anything from a restaurant to a wine-related space or tourist gathering spot. Long-existing cement-stave silos at the site may also be preserved after the Laveen Town Center is built. Work on the center is expected to begin sometime next year and to see completion in the last quarter of 2025. By Garry Boulard Farmington, New Mexico rates as the number one metro area with the largest year-over-year home price increases, according to a new survey just released by the National Association of Realtors. According to the group’s latest quarterly report, the northwestern New Mexico city saw a 20.3% gain in home prices between the end of 2021 and the final quarter of last year. Only one other Western city made the top ten list: El Paso, with a growth rate of 15.2%. Four other cities were located in Florida; three in North Carolina; and one in Wisconsin. Overall, according to the NAR report, single-family home sales were up by some 4% on average in 166 out of 186 metro areas surveyed, comprising an average home sale price of $378,700. In crunching the numbers, Lawrence Yun, chief economist with the NAR, remarked that a “slowdown in home prices is underway and welcomed, particularly as the typical home price has risen 42% in the past three years.” Yun added that “far fewer metro markets experienced double-digit price gains in the latest quarter.” In a separate listing, half of the top ten most expensive markets in the country were located in California, with average prices ranging from $829,100 to $1.5 million. Boulder, Colorado placed eighth on the list with an average home price figure of $759,500. Although only one in ten markets in late 2022 saw home price declines, Yun predicted that a “few markets may see double-digit price drops, especially some of the more expensive parts of the country which have also seen weaker employment and higher instances of residents moving to other areas.” By Garry Boulard A thriving company that makes microcontroller, analog, and Flash-IP integrated circuits, among other products, has announced plans to significantly expand one of its facilities in Colorado Springs. Microchip Technology Incorporated, headquartered in Chandler, Arizona, is an international leader in everything from radio frequency devices to linear, interface, and wireless products. Launched in 1989, the company in 2021 recorded around $8 billion in revenue. Now plans are underway for Microchip Technology to substantially expand its fabrication campus in Colorado Springs at a cost of around $880 million. In a statement, Ganesh Moorthy, chief executive officer of the company, noted that the expansion was partly animated by the passage last year of the CHIPS and Science Act, which is providing funding and incentives for increased U.S. microchip production. Essentially, the company will be expanding its existing 50-acre campus located at 1150 E. Cheyenne Mountain Boulevard, enabling the company to expand its silicon carbide and silicon production capacity. The company has additional wafer fabrication facilities in Tempe, Arizona and Gresham, Oregon. Earlier this month, Microchip Technology reported more than $2.1 billion in sales in the third quarter of 2022, chalking up its ninth consecutive quarter of growth. By Garry Boulard A measure that would appropriate some $50 million in funding for the construction of wildlife corridors is moving its way through the New Mexico State Legislature. Senate Bill 72, as proposed by Senator Mimi Stewart, has unanimously cleared the Senate Conservation Committee and would, if passed by the full legislature, see the building of any number of underpasses and overpasses allowing wildlife to avoid vehicular traffic while safely getting from one location to another. The bill would also fund the construction of boundary fencing, as well as the planning of any corridor construction project and ongoing management of the crossings. According to an analysis of the measure compiled by the Legislative Finance Committee, an average of 900 crashes per year between 2002 and 2018 entailed either deer or elk collisions with vehicles. For the entirety of that 16-year period, deer crashes numbered just over 11,400, followed by elk collisions at around 3,000. In a distant third place: black bear collisions at 650. The wildlife corridors measure has additionally won the approval of the Senate Finance Committee and will soon be considered by the full Senate. If approved by legislators and signed into law by Governor Michelle Lujan Grisham it is possible that the corridors initiative could also be eligible for some federal funding. By Garry Boulard The U.S. Government appears destined to default on its debts sometime this summer unless members of Congress agree to raise the federal debt limit. So says Congressional Budget Office Director Phillip Swagel in announcing his agency’s most recent budget and economic outlook. The Director noted that the country’s projected deficit for the next decade is some $3 billion larger than projected last spring, mainly, he asserted, “because of newly enacted legislation and changes to the economic forecast that boost costs and spending on mandatory programs.” Noting that “as the cost of financing the nation’s debt grows, net outlays for interest increase substantially.” Swagel directly addresses the debt limit by predicting that if that limit remains unchanged, “the government’s ability to borrow, using extraordinary measures, will be exhausted between July and September 2023.” Swagel said he could not be more specific regarding what he called a “projected exhaustion date” for the simple reason that “the amount of revenue collections and outlays over the intervening months could differ from our projections.” To that end, the Director noted that “income tax receipts could be more or less than we estimate.” If those receipts end up being less than expected, the Treasury Department “could run out of funds before July.” President Biden and House Speaker Kevin McCarthy have entered into preliminary discussions regarding the debt limit. According to various news sources, both parties have mentioned the possibility of reducing some spending programs, although cuts to either Social Security or Medicare are thought to be off the table. By Garry Boulard |
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