Petroleum and Pretentiousness

The other day my neighbor was gathering firewood from his driveway. As he performed this suburban task, I thought of his Prius and of the Obama sticker that probably will be on the Prius for another year, based on past history. If Prius drivers were consistent, they would opt for a ban on the burning of wood for recreational purposes, as was my neighbor's plan, as perhaps even for heating purposes. Wood is really good at putting crud into the air.
A better and much more self aggrandizing version of the purist approach came in today's Albuquerque Journal when the normally wonderful Leslie Linthicum wrote an "Up Front" column enshrining Doug Fine of rural southern New Mexico, wife Amanda, and five-month-old Quinn as petroleum free paragons. Linthicum describes what she calls "a "carbon-neutral, solar, living-off-the-land style." Toward the end of the puff-piece, Linthicum admits that aspects of Fine's approach "fall short of self-sufficiency." The photo accompanying the column expands the reality show. Fine is shown sitting on a large ball that I'm pretty sure is made of plastic, which comes from petroleum. Fine's feet are on precisely constructed bricks which probably aren't handmade and therefore were made using, most likely, oil or natural gas. A recliner is outside. The recliner appears to be of those, uh...., plastic jobs.
Fine traded his evil gasoline consuming Subaru for a pickup that runs on vegetable oil. I have no idea how veggie auto fuel is made, but I bet the process involved electricity which mostly comes from oil or natural gas. And the truck's tires probably are made from a petroleum derivative.
So far as I can figure, Fine appears to be pure except when he doesn't want to be pure. That's a natural human approach, And it's fine, as it were, except when one makes a living proclaiming purity (Fine writes books) and the so-called skeptics of the journalism world fail to notice the obvious and ask. Like, hey Doug, what's that big ole ball made of?
Oh, and there are Quinn's diapers. Store-bought and therefore made from petroleum? Or cloth and therefore requiring a bunch of water to wash?

Jobs: October, Approaching Zero

New Mexico's year over year growth keeps nudging toward zero. The growth for October was 0.1% with a 1,000 job increase from October 2007. The unemployment rate jumped to 4.4% after the drop in September to 4% which was considered a statistical blip. The unemployment rate of 4.6% in August.
Santa Fe is the weakest metro economy with the year over year job loss streak at five months. Santa Fe lost 200 jobs between October 2007 and October 2008, a 0.3% drop. Even local government lost jobs during the year.
Albuquerque scored its third month of year over year job losses, down 1,500 wage jobs for the year. Professional & business services, metro Albuquerque's second largest sector with 63,400 workers, declined by 1,000 jobs from its year-ago level, shrinking 1.6 percent. The industry has lost jobs for five consecutive months, says the Department of Workforce Services in its monthly news release. The professional & business services sector includes Sandia National Laboratories. In Albuquerque, construction has lost jobs for 22 months.
Albuquerque manufacturing lost 1,400 jobs during the past year, extending the year over year job-loss streak to 17.
In Farmington, the annual wage job increase was 0.6% or 300 jobs.
During the past year in Las Cruces, there were 1,400 wage jobs added for a 2% annual growth rate.Call centers in the professional and business services sector added 800 jobs.

McCulloch on GOP Future

Today Dr. Allen McCulloch of Farmington had an opinion piece in the Albuquerque Journal about the future of the New Mexico Republican party. It has been reported that McCulloch seeks the chairmanship of the state Republican party.
When Dr. McCulloch ran for the United States Senate in 2006, he won the primary election while campaigning part time. He continued the campaign part time into the summer. Nice guy. But when ti comes to the commitment of a political campaign, he clearly didn't get it.
At the election night party (read: wake) in Farmington, as he was losing to Sen. Jeff Bingaman by 40 points, Dr. McCulloch whined that the media cost him election. Wrong, as I said in my 2006 post-election campaign newspaper column, Dr. McCulloch lost because he had no campaign.
I suppose it is possible that Dr. McCulloch has taken to heart everything he didn't do in 2006 (which was a lot) and everything he did wrong (pretty much everything he did do) and therefore would be the ideal leader to bring the NM GOP from the depths. Possible, but not at all likely.

Thanksgiving: Palin Pursues Opportunity

My wife, the family liberal, got a personal letter yesterday from newly famous Alaska Gov. Sarah Palin. Surely it was a personal letter. After all, it was addressed to her by name. The envelope had the seal of the state of Alaska with a return address of "Office of the Governor of Alaska."
Well, OK, maybe it wasn't a personal letter; the salutation said, "Dear Neighbor."
The pitch was to return an enclosed survey card and "receive an official Alaska travel guide—absolutely FREE." Then, once the guide was in hand, Gov. Palin said, "I hope you'll come to Alaska soon."
All in all, it was an interesting ploy. Trade on Gov. Palin's new fame to lure visitors to Alaska.
A modest risk comes from sending the solicitation to people already inclined to think Gov. Palin is a wacko. A few of these folks might be inclined to visit Alaska. Heightening the Alaska association with Gov. Palin might be sending them in another direction. Then there is the timing of the letter, no doubt done to capitalize on Palin's fame while it is still fresh. Given the distance from the Lower 48 to Alaska, I suspect that Alaska trips aren't exactly spur of the moment. But another issue affects travel timing to Alaska—winter. The forecast for Anchorage today is for a high in the mid-20s and another one to two inches of snow. I thought all this meant the letter was sent much too early to be useful. However, some folks with vacation planning experience say that significant vacations are planned six to eight months ahead. That means the timing is about perfect—just ahead of the holiday mail rush and in time for the travel guide to arrive in January.
One reaction to the letter is "good marketing."
From another person, the reaction is that, at some level, playing on the newly enhanced "political" name is just not ethical..
The letter does accomplish the task of boosting Gov. Palin's name identification while spending Alaskans' money.
My wife says she accepts Palin's invitation, so long as Palin pays for the trip.

Economic Development: Eclipse Aviation

As everyone will know by the evening's television news broadcasts, Eclipse Aviation of Albuquerque has filed for Chapter 11 bankruptcy reorganization. Rather than belabor the soon to be well known details, the point of the moment is to remember that Eclipse always and remains a startup, risky by definition. Not only that, Eclipse has been inventing a new business with its light jet, adding a further level of risk. Anyone putting money into such an enterprise should understand the risk.
One report I just found indicates that the state—meaning the Richardson administration—has two equity investments totaling $19 million. That money—yours and mine, a $10 donation from each of us—is gone, in all likelihood; shareholders are the last ones to escape intact from a bankruptcy.
When investing taxpayers' money, there's a rule—the prudent man rule—that basically says, "Be real careful." Putting money into startups in new industries seems outside that rule.
There is a blog with details upon details. See www.eclipsecriticng.blogspot.com.
Technology Note: My first news of the Eclipse bankruptcy came about 10:45 this morning. I was driving along Montgomery Blvd. in Albuquerque when one of those flashing new electronic billboards got my attention. "Eclipse bankruptcy," it said, and promised news at noon on KRQE TV.

Capitol Report: Oil, Movies And Lt. Gov. Denish

At the Legislative Finance Committee Meeting today in Santa Fe, Sen. William Sharer, a Farmington Republican, and Rep. Don Bratton, a Hobbs Republican, expressed serious worry that the state's financial situation is going to get even worse. Sharer said he had seen five idle rigs in San Juan County recently, something not known for years. It's "because of the pit rules," he said. ConocoPhillips has announced plans to move $150 million in planned spending to other states, he said.
Pits, I understand, are small, lined basins that hold salty water that comes up with oil. Industry considers the administration's new rules to be onerous. More to come on that topic.
This means the state coffers are getting a double hit—less royalty money now due to lower prices and fewer wells in the future because of the pit rules.
Sen. John Arthur Smith, LFC chair, added that the situation was forecast in March. "This is why we don't know where the bottom is. We're very apprehensive," he said.
Smith asked the movie question of Fred Mondragon, Economic Development Department secretary. Smith has been getting what he called "interesting inquiries" about use for operational purposes of state capital outlay money allocated to movie projects. What's up, Smith asked. Mondragon and Film Office director Lisa Strout were unable to enlighten Smith. The discussion ended with mention of a "governor's media fund." Smith said he expected the investigative questions to continue.
Finally, passing by the office of Lt. Gov. Diane Denish, I notice a sign on the wall of the reception area. It said, "Observe the turtle. He only progresses with his neck out." neat thought. But "he"?

Real Estate: Industrial & Commercial Outlook

Real estate people are wired for optimism so it might have been expected that the presentation of the 2009 outlook for metro Albuquerque wasn't as depressing as an external person might have thought. Even so, it wasn't a happy tale told today by members of the Society of Office and Industrial Realtors to fellow developers at NAIOP, the commercial developers group.
New industrial developments will be on the west side, around the airport and at Mesa del Sol. The long dominant I-25 corridor is done.
Industrial rents are now above national rates due to the lack of land. Rates are expected to be flat for A and B level properties during the next year and will drop 10-to 15% for C properties. The vacancy rate will bump a point or so to 6.5% by year end and remain stable during 2009. Construction costs will drop slightly during 2009. An expected drop in construction in China will mean more available steel. There has been some industrial sales activity during 2008, mostly early in the year with a few recent deals.
For offices, the hope is that 2008 will end with zero net absorption. The vacancy rate is about 14% now. The office market has been tight, so only a slight increase in the vacancy rate is expected. The amount of sub-leased space is expected in increase. Much of the vacant office consists of large properties such as the former Blue Cross headquarters. The cost of tenant improvements will drop to about $40/square foot from the current $50. Just one reason is a huge drop in the price of copper.
New office construction will be minimal. The price of existing office properties will be down. Those interested in buying offices will need to bring money. A 40% down payment requirement is the outlook.

Jennings: Legislature Needs to Meet

Sen. Tim Jennings, Roswell Democrat, doesn’t necessarily believe that the legislature should go through the formality of calling itself into an “extraordinary session.” But he does believe that all of the legislators should get together soon for a thorough briefing on state finances. That’s because there’s trouble, Jennings says. He raised the topic in Santa Fe Friday at a meeting of the Legislative Council, the committee that oversees the Legislative Council Service.
The trouble, Jennings told me via telephone this afternoon, is that “our deficit is bigger than a lot of people want to tell.” The deficit is not $270 million, it’s “more like twice that or more.”
A further problem, Jennings said, is that a good bit of the money counted as among the state’s financial reserves cannot be accessed without legislative action. He cited the tobacco tax.
The first reason for gathering the legislature, Jennings said, is that in general “people need to know.” The second reason is practical. If Jennings’ sense of the state’s financial fix is anywhere close to correct—and he says, “I’m not the financial guru, I know that”—then the more time to fix the problem, the better. When the 2009 session ends in mid-March, the fiscal year is about three-quarters gone. That simply doesn’t allow enough time to deal with what may be massive cuts.
Rep. Janice Arnold-Jones, Albuquerque Republican, was the only one who spoke in support of Jennings’ suggestions at the Legislative Council meeting. Arnold-Jones is an advisory member of the committee.

Jennings photo by Mark Bralley

Economy: Albuquerque Tech Performance

Metro Albuquerque probably should count it a victory to have kept 31st place for 2008 in the Milken Institute/Greenstreet Real Estate Partners Best Performing Cities Index of 200 cities. The Milken Web site says the index "ranks U.S. metropolitan areas by how well they are creating and sustaining jobs and economic growth."
The solace in Albuquerque's no change from the 31st place rank in 2007 comes from the turmoil in the rankings. El Paso climbed 85 spots for a 35th place rank in 2008. The losers were led by an 112 place drop by the Vallejo-Fairfield, California, metro area north across San Francisco Bay from Oakland. The rank-dropping leaders appeared to be cities hit by real estate disasters. They are in California and Florida and include Las Vegas, Nevada. Phoenix went from fourth in 2007 to 32nd in 2008.
Provo, Utah, led the 2008 pack with a seven-place climb from 2007, followed by Raleigh, NC, which jumped eight spots.
Albuquerque's rank comes from being fifth in relative high-tech GDP growth from 2002 to 2007 and from having a relatively large high tech sector in the local economy.
Albuquerque did less well in overall job performance, ranking 54th in five-year job growth, 89th in one-year job growth, 70th in five-year job growth and 53rd in one-year job growth.
The index is found at http://bestcities.milkeninstitute.org.

Taxes: Increase Rejected

Voters in Otero County, where Alamogordo is the county seat, last week rejected a tax increase proposed to help pay for New Mexico's Spaceport. The margin was 52% to 48%, early reports said. The ten-year, one-eighth cent addition to the county's gross receipts tax rate would have provided the Spaceport $6.6 million per year.
The reaction from Spaceport officials was along the lines of: No big deal. It not that much money; we'll find it elsewhere.
At 7.5%, Alamogordo has one of the highest municipal tax rates in the state. The county has two other municipalities, Cloudcroft with a 7% rate and Tularosa with a 7.25% rate. The gross receipts tax rate in the rest of Otero County is 5.8125%.
The highest gross receipts tax rates are in Quay County where 8% is the rate in Logan, San JOn and Tucumcari.
Dona Ana and Sierra counties have passed tax increases to pay for the Spaceport.

Politics: Election Report

Lonna Atkeson, University of New Mexico political science professor, crunches numbers and does post-election interviews of candidates. She gave a preliminary report at noon today to the Albuquerque Press Women. All her figures are preliminary, she said.
Atkeson's wisdom usually doesn't quite run with the conventional. Today was no exception. At least in New Mexico, she does not see the election as a transformation, but rather as "a response to a particular set of conditions." It will be interesting to see how the electorate responds to the policy changes resulting from the legislature being pushed left.
Application of voter identification procedures varies from precinct to precinct, Atkeson said. Voter ID is done correctly in perhaps 5% of precincts.
Across the state, voter turnout dropped slightly in percentage. It was 68.2% this year and 69% in 2004. Turnout was about 56% in 2000. Turnout increased in Cibola, DeBaca, Hildalgo, Lea, Lincoln, Mora, Rio Arriba, San Juan, San Miguel, Taos and Torrance counties. Turnout dropped most in Grant and Union counties.
One striking result from the 2008 election is the continued rise in the percentage of registered voters not declaring a party preference. The "others" were about 14.5% this year, up from 12.75% in 2004 and 11% in 2000. This "sorting" of party affiliation, which is happening everywhere, will produce more volatility as people choose one message and then the other. The sorting has much to do with the nationalization of politics, which was caused by television. Today's fragmentation of media means more partisanship as the political junkies on one side or the other choose self-reinforcing media. The informed are even more informed, the uninformed know less. Politically inactive people are becoming even more inactive.
At about 22%, Dona Ana and Lincoln counties have the most other" voters. Bernalillo, Los Alamos and Santa Fe are just behind at 20%. Atkeson sees "an interesting tension" with party extremes pushing people to the left or right and people drifting to the middle.

Mini-nuke plants from Santa Fe

Hyperion Power Generation of Santa Fe has turned the first letter of intent received in August into what "The Guardian" of Britain calls "more than 100 firm orders" for its small nuclear power generating plants that are based on technology licensed from Los Alamos National Laboratory. For The Guardian's story, see http://www.guardian.co.uk/environment/2008/nov/09/miniature-nuclear-reactors-los-alamos.
The August letter of intent cane came from TES, a Czech infrastructure company specialising in water plants and power plants.
Hyperion's power plants, smaller than a garden shed and able to power 20,000 homes, cost $25 million. The newer orders are from oil companies and utilities, John Deal, Hyperion president told "The Guardian."

Politics: NRAs Final Shot

The National Rifle Association creatively fired a last shot in the New Mexico election. The NRA’s ad was the plastic bag containing my election day Albuquerque Journal. “Defend Freedom. Defeat Obama,” one side said. The other side pitched a vote for Steve Pearce for Senate.
The fine print on the bag reflected changes in our society that perhaps are ultimately more important than a single election. One message said to keep the bag away from children, as if the words from the Nanny State would help.
The second note said the bag was recyclable. Something from the NRA recyclable? But the NRA is transcendently evil, liberals believe. And recycling is Transcendently good?
The NRA shot proved to be a shot in the dark in New Mexico, just as in Colorado where the same bag, but with a different Senate candidate, contained the Denver Post.

Movie Making: Followup

When writing a week ago about movie-making disruptions, I assumed that Jefferson Middle School had to have been out last Friday. The confusion and complexity of the filming looked to be far than would have been possible while holding school. After a week of unreturned phones calls to Jefferson and Albuquerque Public Schools, a visit to Jefferson this afternoon brought an answer. I was wrong. A teacher said the whole thing went quite smoothly. Students were picked up in the normal area, which then was quickly filled for filming.
I'm impressed. Congratulations to both Jefferson and the movie company.
That said, there are bunches of costs of filming that are not covered by the economic analysis of filming in New Mexico.

Ute Lake Ranch

That's the name of the development near Tucumcari that may have been advertised by the billboard we saw in Amarillo ten days ago and mentioned in a "Road Notes" post.
The initial plan is for the 12,500-acre project is for 1,500 homes, 750 patio homes at $450,000 or so and 750 estate lots/homes at $1 million to $2 million. Our wizard of Tucumcari reports that most of the estate lots have been now sold with 20 or so patio homes sold and under construction.
Carma US, of Calgary, Alberta, a developer of residential master-planned communities, and Ute Lake Ranch, Inc., are the developers. The joint venture partners have hired JC Resorts of San Diego, CA, to oversee construction and operation of the community's 8,000-yard Nicklaus Design golf course and other resort amenities. The golf course will have twelve holes along he water.
The website is www.utelakeranch.com.