Time to Buy CEMEX?

Aerial view of CEMEX McKelligon Canyon Quarry.
Photo by Scott Cutler

Not the stock - the McKelligon Canyon quarry. Here's why:

There is no way to close down the quarry. That was tried several years ago when Caballero was Mayor. The effort failed and it helped lead to the political demise of Ray Caballero and the election of Joe Wardy. 

There is one fact in Texas law that no one can get around unless there is a huge sea change in Texas politics leading to a re-writing of its Constitution. In Texas private property is sacrosanct. It trumps all other considerations. CEMEX owns the land at the quarry to the ridge of the mountain. Although at a certain point it may become logistically impossible to do any further quarrying, CEMEX can continue to scar the Franklin Mountains for the foreseeable future and there is nothing anyone can do about it.

Nor can the City easily boycott that quarry and not allow them to bid on city projects. It’s very hard to blacklist a vendor.  They have to have a really bad record with the city (or the state or the feds) such as an inability to perform. A construction industry insider said this to me: "I bet the city won’t even blacklist Basic IDIQ even after all the drama at San Jacinto.  It can be challenged legally too. You can’t blacklist CEMEX simply because they own a quarry and are destroying the mountain.  Won’t work."

The City can reduce the amount of rock and screenings used in landscaping. Although that may impact other quarry businesses, if the City ever gets serious about really fixing our streets and sidewalks, that should be a big plus for that industry that would easily offset any loss of landscaping business.

Finally, CEMEX as a corporation is in trouble. The Street, a financial media company, gives CEMEX a rating of D+. Their recommendation to stock traders:

"We rate CEMEX SAB DE CV (CX) a SELL. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself and poor profit margins."

You can download the Street's full report and get more information about CEMEX by going HERE.

Simply put, CEMEX needs cash. Their selling the quarry would be advantageous to their corporate survival.

Who should buy? Certainly not the General Land Office of Texas that owns the mineral rights. That would make no sense. The GLO would simply want to find someone else to quarry the rock so that royalties can be paid to the Texas Permanent School Fund. 

The City of El Paso can't afford it, so . . .

That leaves the Texas Parks and Wildlife Department that runs the Franklin Mountains State Park. 

The deal could be structured over a period of three or four years. Once part of the TPWD, the face of the Franklins can be conserved. Now that El Paso is beginning to realize the huge economic value of eco-tourism, working in concert with others to buy and shut-down the quarry, and preserve the face of the Franklins from any further unsightly damage will only mean economic gain for the City. 

It's time to consider that option.

The Friday Video on Tuesday: Castner Range National Monument

The video was created by Mr. John Nunez. 

Who is that guy in the red Hawaiian shirt?

Gigapan of the Week

Southern Franklin Mountains Gigapan by Joshua Villalobos
Click on image to expand.

Joshua Villalobos is an Associate Geology Professor at El Paso Community College. He has done some amazing gigapans of some of the geological features of our area. Check them out HERE.

"GigaPan Systems is a global, privately held technology company that provides the hardware, software, and services to create and share high-resolution, interactive gigapixel panoramic images." (Wikipedia)

By the way, you can see how much damage CEMEX has done to our mountain.

So where's the water coming from?

In my last post I linked to stories in the Hudspeth County Herald which claimed that Torchlight Energy Resources (our local frackers) were getting between 80,000 to 84,000 gallons of water per day from the City of El Paso for one of their fracking wells. Yet El Paso Water Utilities has not sold any water to Torchlight. That leaves local water haulers. However Mr. John Balliew, CEO of the EPWU, points out that the two independent haulers who buy water from the utility could not possibly be supplying that much water to Torchlight if at all.

According to Balliew, although haulers don't specify what they do with the water that they buy from the utility, most of the water hauled is for construction purposes - dust control and compaction.

There are two haulers who serve the Colonias - Lujan Trucking and Mountain View Water Haulers. Balliew said that they each average about 12,500 gallons per day. That is "about the consumption of one apartment complex with a 3" meter or perhaps 75 single family homes," Balliew told me. 

"If they are hauling to the frackers they cannot be hauling much water to the Colonias and vice versa," Balliew said. 

Since the amount of water bought by haulers isn't out of the ordinary, it does not warrant taking any action by EPWU to limit the amount of water which it sells to the haulers. 

So, where does the water come from? John Turner, the Rancher, or perhaps Horizon Regional M.U.D.?

Checking.

21,840,000 gallons of water from El Paso to frackers per well per year

Water hauling is a legitimate and necessary business. More than just the colonias which need water, the construction, quarrying and other businesses need water to keep dust down. But how much water should go to Torchlight Energy Resources which is fracking just ten miles from El Paso on the Diablo Plateau, the same geographical area as the Otero Mesa depending on whether you are in New Mexico or Texas.

According to the Hudspeth County Journal, Torchlight's first test well required 80,000 gallons of water per day purchased from the City of El Paso. It turns out that the City (El Paso Water Utilities) did not sell water to Torchlight nor has a metered pipe running to the well. The Journal has yet to edit their online story to reflect this fact. Yet, where did the water come from? Water haulers purchase the water from EPWU and re-sell it to their customers. (This does not include water purchased by CEMEX or TxDOT or such.) There are three TCEQ licensed water haulers in El Paso County.

Hudspeth County Journal did do a follow-up story. The drill site superintendent, Jesus Garcia, was quoted as saying that 84,000 gallons of water a day was needed. Rancher John Turner had been supplying some of the water but his well couldn't pump enough water fast enough for the operation and he had to cap sales in order to meet the needs of nearby Deer Mountain Estates. Jobe Materials also could not supply water as needed.

If 84,000 gallons of water is correct, then, in the course of a year, each well being fracked just outside of El Paso will need almost 22 million gallons of water per year and that's just one well. (52 weeks X 5 business days per week X 84,000) Remember that Torchlight could eventually have 2500 wells. That's 55 billion gallons of water each year! And that is the amount of water necessary just for test drilling not for the actual extraction of gas and oil by fracking.

There would be no record of EPWU selling to Torchlight because Torchlight is getting its water from intermediaries - the water haulers. For a city that needs to protect its scarce resource of water, 22 million gallons of water per year per one fracking well is just too much not to mention 55 billion gallons per year if all 2500 test wells are drilled. 

Do not expect Torchlight Energy Resources to go away. According to a recent Market Wired report, Torchlight has maximized its liquidity and limited its exposure to debt. This capital structure has insulated them from the recent price fluctuations in oil and gas. In addition, they have a farm-in agreement with Founders Oil and Gas regarding their fracking in Hudspeth known as the Orogrande Project. "Torchlight will receive payment of $500,000 per well for each of the next 8 wells and through the Farm In agreement the Orogrande project is fully capitalized for development over the next two years."

Expect Torchlight to drill 8 more test wells in 2016.

Shouldn't the PSB consider capping how much water the water hauling intermediaries can purchase over a period of time?

Information and Discussion Only Please

Want to know what is going on with the Open Space Advisory Board (OSAB) these days? Nothing. For nearly a year now the agenda has been hijacked by the Planning Department bureaucracy. Read: Larry Nichols, Director of Planning. Read: Tommy Gonzalez, part-time City Manager. Although OSAB is charged with advising City Council regarding the Open Space Master Plan and acquisitions of open space, members of OSAB are no longer in the position (at least through their meetings) to advise. Why? Most every item on the OSAB agenda is for "Information and Discussion" only. No ACTION. 

In advance of the most recent meeting the Chair, Lois Balin, sent Planning a final agenda with every item marked "Discussion and Action". It got changed—changed from the top—changed by Larry Nichols. A major OSAB concern has long been the revised Natural Open Space zoning ordinance. Last November in a meeting with Chair Lois Balin and myself as Vice-Chair, Larry Nichols promised to move the NOS item forward. At this point his words must be considered to have been misleading.

The Board should be setting its own agenda and Planning should be assisting. Instead it is the tail wagging the dog. 

So where is Open Space money going (that 10% of the stormwater fee that you pay) plus all that Quality of Life bond money? Try park ponds and, I suspect, other non-Open Space budgetary matters.

Just How Far Can CEMEX Go?

Click image to enlarge.

Answer: All the way to the ridge of our mountains! In addition they can stretch almost to the parking lot of Wyler Aerial Tramway State Park. 

It's just not right. 

Consumers should stop buying materials from this quarry. All of us should not patronize companies that get materials from this quarry. The City of El Paso should stop purchasing from this quarry. The State of Texas should buy this quarry and give it to the Franklin Mountains State Park. 

This destruction of our mountains must stop now.

I'm Running!

Here was yesterday's press release:

For immediate release.
For more information, contact Jim Tolbert at 525-7364 or diegotolbert@gmail.com.

NEIGHBORHOOD ADVOCATE, JIM TOLBERT, ANNOUNCES RUN FOR CITY COUNCIL

El Paso -- March 8, 2016. Jim Tolbert announces that he is running for City Council, District 2. Election Day is scheduled for Saturday, May 7, 2016. Early voting starts Monday, April 25.

In deciding to run for city council representative, Jim Tolbert said, "Now more than ever, we need strong, ethical representation at City Hall. We need leaders committed to a common vision who are willing to put in the hard work to make good things happen for El Paso residents. I want to work with the voters of District 2 to restore integrity and decisive leadership to City Hall."

If elected, Jim Tolbert will

• Be a full-time Representative who will listen to his constituents, communicate, be open, honest and transparent.
• Represent all of the interests of District 2, and be a strong leader who will work to make City government functional and ethical again.
• Champion El Paso’s businesses and employees. Growing businesses and well-paid workers mean a prosperous community.
• Work toward ending government waste of your tax dollars.
• Preserve our natural and heritage resources. Improve our parks, senior centers and recreational facilities.

About Jim. Jim is a native El Pasoan who graduated from Austin High School, Texas Tech University and the Episcopal Theological Seminary of the Southwest.  Jim has a long record of public and community service.  He has helped open a shelter for battered women in the Texas Panhandle and served on an advisory committee for a center for troubled youth. He has a passion for preserving our environment, increasing the number and quality of parks in El Paso and strengthening and preserving great neighborhoods. He is the Director of El Paso’s Celebration of Our Mountains, Chair of the West Texas Urban Forestry Council, member of Senator Jose Rodriguez’s Sustainable Energy and Environmental Committees, the City of El Paso’s Open Space Advisory Board, former Co-Chair of the City’s Parks and Recreation Advisory Board, and former member of the Building Standards Commission. He ran a small business as a print broker and is now the southwest sales representative for a promotional products distributor. 

Wyler Aerial Tramway: Celebrating 15 Years!

Click on image to enlarge.

Park Ranger and Interpreter, Diana Moy, posted on Facebook: 

"We are super excited and want to invite all of you to come and celebrate 15 years of the Tramway as a State Park! 

"The celebration will take place at the park on Saturday, March 12 from 12 to 4. Parking will be available at the Amphitheater in McKelligon Canyon [Map] and shuttles will be available to bring visitors to the Tramway and back to your vehicle.

There will be lots of activities, exhibitors, food trucks, and more; don't miss the fun!"

The El Paso Group Sierra Club will be distributing free 13" x 10" x 15" x 10" reusable shopping bags and will share a table with the El Paso Zoo.

Please visit Wyler Aerial Tramway State Park on Facebook.

SWEC Spring 2016 Back by Noon Outings

Click image to enlarge.

Back by Noon Outings are sponsored by the Southwest Environmental Center (SWEC). 

"Established in 1992, we are a member-supported, grassroots conservation organization based in Las Cruces, New Mexico.

"Our mission is to protect and restore native wildlife and their habitats in the Southwestern borderlands, through advocacy, education and on-the-ground projects.


"We speak for wildlife and wild places. We work to protect and restore vital habitats, like Otero Mesa and the Rio Grande, and endangered species, like the Mexican Grey Wolf." - About SWEC

Creating More Trailheads in El Paso up against Bureaucratic Obstacles

Click on image to enlarge.

Over the last few years one of the greatest achievements for outdoor recreation in El Paso was the construction of the Lost Dog Trailhead. The Borderland Mountain Bike Association (BMBA) guided by the leadership of Rick Bonart, Brent Sanders and David Wilson created the trailhead with generous donations from Jobe Materials, the West Texas Urban Forestry Council, the El Paso Water Utilities and others. This private-public partnership created the trailhead faster and cheaper than what it would have cost had the City of El Paso alone constructed it.

Now BMBA is negotiating a contract with the City to build more trailheads. The problem is agreeing on which sites to use. 

An analysis was done on a list of sites produced by the City's Parks and Recreation Department and reviewed by the Open Space Advisory Board. Some of the money designated for trailheads was either on private property or state property. Of the 15 projects on the City's list, 12 are on property the City doesn't have permission to use. 

Unfortunately, the Director of Parks and Recreation, Tracy Novak, doesn't want to vary from the list because composing that list required lots of work to create. This is bureaucratic insanity. Process is valued over product.

In addition BMBA tried to get seed money from the Paso del Norte Health Foundation but the Foundation would not partner with them. Their strict requirements for proving the benefits of any project outweighed the demand for more trailheads.

Rick Bonart summed it up this way: "We all need to work together and make these Quality of Life projects move forward."