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Opening the floodgates for ‘produced water’ [Albuquerque Journal, N.M.]

Yellow Truck With Oilfield TanksMay 20– May 20–Marvin Nash is gushing with enthusiasm about the prospect of irrigating New Mexico’s arid lands with oil and gas wastewater.

His Wyoming-based startup, Encore Green Environmental, is pursuing a pilot project to clean up effluent waste from booming industry operations in southeastern New Mexico and then spray it over desert areas to increase vegetation for ranching and erosion control.

His company already has one pilot project under way at a Wyoming ranch near Cheyenne. In early April, Nash submitted permit applications with the New Mexico Environment and Energy, Minerals and Natural Resources departments to become the first company here to reuse oil-and-gas effluent, known as produced water, outside of industry operations.

“Regulators must review our application to figure out what’s next,” Nash said. “There’s a big learning curve, because no one has done this until now. But we want to be the first pioneers to start this process in New Mexico.”

Nash waited until Gov. Michelle Lujan Grisham signed House Bill 546 into law before submitting his applications. The bill, known as the Produced Water Act, will take effect in July, potentially opening the floodgates for the first time for produced water to be recycled for use beyond New Mexico’s oil fields.

Supporters say the new law marks a revolutionary step forward for the industry, and for New Mexico as a whole, possibly generating more than 40 billion gallons of new water resources annually for the state. House Speaker Brian Egolf, D-Santa Fe, called it “breathtaking,” and one of the “greatest environmental accomplishments” to come out of the state Legislature.

But others are highly wary about the potential risks of moving too fast, including environmentalists and state officials charged with writing new rules and regulations to oversee implementation of the law. Some environmental groups outright oppose it.

The state Water Quality Control Commission still must establish standards and procedures for moving forward, including an open, public rule-making process where everyone can weigh in, Environment Secretary James Kenney said.

“It will take some time before we would issue any permits, because we first need to develop a process to protect water quality with scientific data,” Kenney said.

It’s unclear how long that may take.

“People have legitimate concerns about using produced water and how it’s treated. We need to hear from them about their concerns through a public process,” Kenney said.

Everyone, including industry, supports careful scientific review of the potential risks and safety measures needed before reusing wastewater for things like agriculture or other industrial purposes, much less considering it for recycling into fresh water systems.

That’s because it’s some of the dirtiest water managed by any industry, often 10 times more saline than seawater. It’s generally laced with myriad metals and other elements that seep into it underground, including naturally occurring radioactivity. And oil and gas operators often add scores of chemicals to it during operations, particularly for hydraulic fracturing of wells.

Between five and seven barrels of wastewater comes up from wells with every barrel of oil. And with production now booming in the Permian, the amount of accumulated wastewater is astronomical, reaching more than 1 billion barrels in New Mexico in 2018, according to the Energy, Minerals and Natural Resources Department.

That totals about 40 billion gallons, or more than Albuquerque uses every year.

“If we’re breaking oil production records now in the Permian, it means we’re also breaking records in produced water,” said Bill Brancard, general counsel with Energy, Minerals and Natural Resources.

Many producers have begun reusing wastewater in their own operations, thanks to advances in water treatment and recycling technologies. Recycled wastewater, for example, now accounts for about 40 percent of the water that Houston-based Marathon Oil uses in its New Mexico operations, said Corporate Water Management Advisor Kerry Harpole.

“Technology advancements have made it economical to treat at least a portion of the water instead of sending it down hole,” Harpole said.

Midstream companies have also ramped up recycling to supply operators. Houston-based Solaris Water Midstream recently began service operations in Lea and Eddy counties to recycle produced water using hundreds of miles of pipelines in its new Pecos Star System. The network moves wastewater from industry sites to treatment centers and then back again for drilling and fracking operations. Marathon is one of Solaris’ customers.

Smaller companies are also getting into the game.

Gregg Fulfer, a Republican state senator from Jal and owner of the Fulfer Oil and Cattle Co., has set up his own operation to deliver treated water to producers. About 20 percent of his revenue now comes from selling recycled water.

“Water reuse is having a huge impact,” Fulfer said. “All the major players are going in that direction.”

Still, most produced water is injected underground, in part because operators have been waiting for clear regulations about ownership and management of wastewater before investing heavily in treatment and reuse.

The new state law provides that clarity, guaranteeing ownership rights for companies to recycle, reuse and sell produced water. It also establishes jurisdictional authority among regulators. It puts the state Oil Conservation Division in charge of reuse in oil and gas operations, while authorizing the state Water Quality Control Commission to adopt rules and standards for reuse outside of industry, which the Environment Department would then oversee.

The new law could generate an industry rush to recycle a lot more produced water, both for reuse in their own operations, and for activities outside of oil and gas, said Ryan Flynn, executive director of the New Mexico Oil and Gas Association.

“The law defines control, ownership and liability. That gives clarity to unleash a new source of water,” Flynn said. “… It’s a huge opportunity and a magnet for new investment by businesses and individuals. We could see billions of dollars flow into water resources.”

The law earned broad bipartisan support among state officials, but it was largely an industry-driven initiative. For state officials, it paves the way to turn a waste product into a valuable commodity while guaranteeing that it’s first treated to state standards, Kenney said.

The legislation has support from some environmental groups, particularly the Environmental Defense Fund, but with caveats. That includes detailed, scientific research before allowing treated water to flow outside of industry, with proactive intervention by the Environment Department to protect public health, said Nichole Saunders, senior attorney with EDF’s energy program.

Others outright oppose the law.

Some environmentalists protested during legislative debate, chanting against it as legislators voted on the bill. They’re particularly concerned that highly-contaminated, industrial wastewater will find its way into the state’s fresh water resources, said Rebecca Sobel, Wild Earth Guardians’ senior climate and energy campaigner.


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Drilling Down: Saltwater disposal well boom in the Permian Basin [Houston Chronicle]

May 20– May 20–A boom to build new saltwater disposal wells is underway in the Permian Basin.

Drilling for crude oil and natural gas in the prolific West Texas shale play is happening faster than pipelines can be built to move product to market. It’s also happening faster than companies can build landfills for oil field waste and disposal wells to inject wastewater deep underground.

But that may change. Over the past week, two companies have filed drilling permit applications to develop 12 saltwater disposal wells in the Permian Basin.

Fort Worth saltwater disposal well operation Boykin Energy is seeking permission from the Railroad Commission of Texas to develop five injection wells on its Ross SWD lease in Loving County. Midland oil company CrownQuest Operating is seeking permission to develop another seven saltwater disposal wells on leases in Loving County.

More Information

Permian Basin

Denver oil company Jagged Peak plans to drill 11 new horizontal wells on two leases in Ward County. The wells target the Phantom field of the Wolfcamp geological layer at total depths of 15,000 feet.

Eagle Ford Shale

The recently formed oil company Action Energy plans to drill two new wells on the company’s Y-Bar Action lease in McMullen County. The wells target the Eagleville field of the Eagle Ford geological layer down to a total depth of 12,000 feet. Over the past six months, Action, of Denver, bought already-producing leases in South Texas from Valence Operating Co. and Abraxas Petroleum.

Haynesville Shale

Mount Enterprise oil company KJ Energy is preparing to drill a horizontal gas well in East Texas on its Pool-Cyphers-White lease in Rusk County. Located about 11 miles southeast of Henderson, the well targets the natural gas-rich Brachfield SE field of the Cotton Valley geological layer down to a total depth of 10,347 feet.

Barnett Shale

Oklahoma oil and natural gas company Devon Energy broke a four week-long horizontal drilling drought in North Texas. The company is seeking permission to drill a pair of horizontal wells on its Nelon, G.E. lease in Wise County. Located about two miles southwest of Boyd, the wells target the Newark East field of the Barnett geological layer down to total depths of 9,000 feet.


Dallas oil company Scout Energy Management is seeking permission to drill four vertical wells split between its Sneed and Sneed C leases in Moore County in the Texas Panhandle. The four oil wells target the Panhandle West field at depths of 4,000 feet.


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Mary Shown: With South Bend’s friendlier rules, local food truck market is revving up [South Bend Tribune, Ind.]

May 19– May 19–As the spring weather warms, food trucks have started making the rounds into downtown South Bend and to area business parking lots.

The trucks, often having business names and personas plastered across the sides, have parked along city streets primarily during lunch hours the past few weeks. Most are returning vendors with some new, but familiar faces, peppered in along the way.

The surge in activity isn’t by accident. In 2017, South Bend Mayor Pete Buttigieg signed an ordinance allowing food trucks to stay in one spot for up to eight hours. That is up from the previous four-hour limit. The city also allowed for cheaper, temporary permits so vendors wouldn’t have to pay $525 for the whole season. Those changes were made to entice more food trucks to be available in downtown.

Jermaine Miller tries to take advantage of friendlier South Bend rules by driving his food truck about 35 miles from Michigan City to downtown South Bend once a week. His truck, Cool Runnings, specializes in Jamaican cuisine and Miller tries to park it in the same space near Jefferson and Lafayette boulevards on Tuesdays between 11:30 and 3:30 p.m.

“I like doing the food truck and seeing people’s happy faces,” Miller said. “But every time we go out there, it’s a different situation. It’s a lot of work to load (the truck) up and clean it up. But we just try to give the same service and try to be better every time.”

The food truck has been so successful in South Bend for Miller that he is now looking to open in a permanent restaurant location in the area.

“We are desperately looking for a space to go into,” Miller said. “We want to start out with something small that we can grow into.”

For local Mexican restaurant-chain Hacienda, it’s the opposite. Last fall, Hacienda launched its truck, Tattoo Taco, as executives there recognized a few years earlier the need to squeeze into the mobile food service market. They invested $15,000 into the truck that once served as a prison transport vehicle. This year will be the first full year customers can take advantage of its offerings.

Generally, the truck sells three different tacos — blackened avocado, chicken club and apricot pork — along with Hacienda’s locally famous chips and salsa. But Hacienda officials envision the truck will eventually offer more.

“We are working on different tacos options, but also stick to what is working,” said Cody Jackson, Hacienda’s marketing director. “Maybe we will play with a second or third (taco option), because we definitely don’t want people to get bored.”

Tweaking menus with a blend of old and new options has been a tactic for many food trucks. Martin’s Super Markets launched its deli food truck about three years ago by offering paninis, salads and its iconic fried chicken.

“If we got rid of the fried chicken, I think there were would a riot,” said catering and food truck manager Brittany Szczechowski. “But we are bringing in weekly specials and trying new things like Italian beef and different tacos.”

Szczechowski said the the truck has been primarily used for catering and special events, so it’s unlikely you will see the truck parked in downtown South Bend on any given day. But, she encourages customers to keep in touch with the social media pages to find out exactly where and when it will be. The truck still plans to be present at Friday’s By the Fountain events in downtown South Bend beginning June 7.

Catering to special events and businesses is something most food truck owners are trying to do.

In Elkhart County, Rulli’s Italian Restaurant announced its food truck ambitions last year. Owner Sam Rulli said the truck will be ready in about a month and will sell pizza, sandwiches and breadsticks among other options. Rulli said special and catering events will be the priority, though he is not against arriving at downtown Elkhart or Goshen events as well.

“The goal is to do large orders of pizza,” Rulli said. “Our truck is going to be up for booking and catering.”

The Real Grille, which is operated by Real Services agency, which provides independent living assistance and also operates Meals on Wheels, has begun working with area businesses, including Crowe LLP, to park in its parking lots to provide an easy lunch option for employees.

“We are getting a lot of requests by businesses,” said food truck chef Paul Como. “Plus, parking downtown is a mixed bag for the most part.”

The 20-foot food truck takes up two parking spaces in downtown South Bend, he explained, so working with businesses makes the most sense. Como said they do make a point to be downtown whenever they do not have an event and when the weather is good.

Weather plays a large part in food truck business. Hacienda’s Jackson said dealing with weather has been the biggest learning curve for the food truck business.

“Weather and location are the key things,” Jackson said. “I think we did one thing where it was rainy and we did half the sales we could have. But when the weather is nice, that is our busier time. One day we were outside on a beautiful day and we underestimated how busy we would be and we could’ve sold so much more. Now we know when it’s a nice day to stock up.”

Only adding to what seems to be a plethora of food trucks, other options available in our area include The Wiener Shack, SmoqTruq, Four Winds Food Truck and On The Money BBQ If you have a favorite food truck that was not mentioned here, feel free to reach out and let me know!

Have you heard?

Dickey’s Barbecue Pit will open mid-July at its new location on Mishawaka’s north side at 103 E. University Drive. The Dallas-based barbecue chain restaurant offers barbecued ribs, sausage, chicken, brisket and sides. … The Mishawaka farmer’s market has been canceled Sunday due to the anticipated stormy weather.

Mary Shown’s column runs every Wednesday and Sunday. Contact her at or call 574-235-6244. You can also talk retail at and at Sign up for the weekly Market Basket newsletter at


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Key questions remain after PSNC report on deadly Durham gas explosion [The News & Observer (Raleigh, N.C.)]

May 16– May 16DURHAM — A report to federal regulators obtained Wednesday gives the fullest accounting to date on the April 10 Durham gas explosion that killed two people and injured nearly two dozen others.

But the report says investigators for Dominion (PSNC) Energy do not yet know what ignited the gas leak or whether utility lines were properly marked for a contractor laying underground fiber cable.

Those questions and more were highlighted in the mandatory report from PSNC to to the Pipeline and Hazardous Materials Safety Administration (PHMSA). The News & Observer obtained a copy of the report after a public records request through the Freedom of Information Act.

The gas explosion leveled one building and cost millions in property damage.

A contractor who called 911 at 9:37 a.m. said, “We hit a gas line.” The building at 115 N. Duke St. exploded at 10:07 a.m.

Gas companies must provide an incident report to the PHMSA within 30 days of a “significant” gas pipe damage. The report is from the gas company’s internal and ongoing investigation of the explosion and states all numbers should be treated as estimates.

The report doesn’t represent findings from investigating organizations like the N.C. State Utilities Commission.

Bill Gillmore, deputy director of the operations divisions for the utilities commission, said in a previous interview it could take months or years for its investigation to be complete.

Here are highlights from the gas company’s 10-page report.

Mechanical puncture

PSNC’s report concludes a “mechanical puncture” caused the gas leak, but does not say the exact time the pipe was damaged.

A mechanical puncture is “typically [caused] by a piece of equipment such as would occur if the pipeline was pierced by directional drilling or a backhoe bucket tooth,” according to PHMSA.

Direction drilling — a common method of drilling for installing utility lines — was listed as the type of excavation at the scene.

The report does not list the contractor, but PS Splicing reported the damage to the gas line through the North Carolina 811 system. Anyone who damages a utility line is required to immediately contact 811 to report the damage and reach out to the utility company.

The 811 system was notified at 9:31 a.m., six minutes before the contractor’s call to 911.

A PSNC “first responder” was notified at 9:36 a.m. by 811. PSNC also received a call from 911 about the gas leak at 9:48 a.m., according to the report.

Someone had called 911 at 9:11 a.m. reporting the smell of gas a block away from the explosion, but firefighters were not able to detect the smell of gas at the reported area. and officials have not said the two incidents were related.

Markings in question

Before underground work begins, a company must call 811 so utilities can be notified and the underground pipes can be marked.

“While PSNC has determined that its gas facilities were located by its contract service provider, the investigation has not yet confirmed that the lines either were or were not marked accurately,” the report said.

A PSNC spokesperson previously told the N&O “we feel incredibly confident that the lines were marked accurately.”

‘Inconsequential’ amount leaked

PSNC did not receive an automatic alert after the gas-line break because pressure in the pipes did not fluctuate from normal operating pressure, according to the report.

A “supervisory control and data acquisitions” system — used, among other things, to measure the pressure within the gas system — was in place and there were two monitoring points within the distribution system. The monitoring points were at larger pipes, two miles “upstream” of the break.

“The volume of gas lost was inconsequential” and “there was not a significant or correlating resultant pressure drops at these points,” according to the report.

The gas was turned off until 11:10 a.m.

The volume of gas that leaked was an estimated 46,000 cubic feet or about half the size of an Olympic pool.

The estimated cost of the gas released? $196.

Additional unknowns

The PSNC investigation is ongoing and the report states the company still doesn’t know the ignition source “inside of the structure that exploded” nor the precise number of injuries, though its says various media reports list the number to be between 17 and 25 people.

The costs of property damage, repairs and restoration and emergency response are unknown. The damaged buildings are valued at over $100 million, the N&O previously reported.


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Damage of anchor strike to Straits of Mackinac pipeline finally revealed [Detroit Free Press]

May 16– May 16–A newly released video of an underwater inspection of the Line 5 oil and natural gas pipelines in the Straits of Mackinac shows damage to at least the outside of the pipes following a 2018 ship anchor strike.

The Great Lakes barely dodged a bullet,” said Mike Shriberg, Great Lakes regional executive director of the environmental nonprofit National Wildlife Federation.

The April 1, 2018, anchor strike damaged Line 5 and nearby electric cables along the lake bottom where the Great Lakes Michigan and Huron connect. A tugboat called the Clyde S. Vanenkevort was named by then-state Attorney General Bill Schuette as responsible.

Nearby, high-voltage power cables along the lake bottom, owned by American Transmission Company, also were damaged by the anchor strike, leaking an estimated 600 gallons of dielectric fluid into the water.

Line 5 moves 23 million gallons of oil and natural gas liquids per day through the Upper Peninsula, splitting into twin, underwater pipelines through the 4-mile stretch of the Straits, before returning to a single transmission pipeline through the Lower Peninsula and on to a hub in Sarnia, Ontario.

Concerned citizens and environmentalists have called for the decommissioning of the line, stating a spill like the one on Enbridge’s Line 6B pipeline near the Kalamazoo River in 2010 would devastate the Great Lakes, shoreline and island communities, as well as the state’s economy.

The underwater pipeline inspection video shows deep scoring along the lake bottom, then up and over the twin pipelines. Deep marks are etched in both pipelines, and there is evidence of outer protective coating loss.

The video was released Tuesday by U.S. Sen. Gary Peters, D-Mich. It was provided by Enbridge to the Senate Commerce, Science and Transportation Committee in response to Peters’ questioning of the Canadian oil transport giant at a committee field hearing focused on Line 5 in Traverse City last year. Peters, in a statement Wednesday, said he released the video after receiving assurances from the U.S. Coast Guard that doing so would not undermine the still ongoing federal investigation into the anchor strike.

“An oil spill in the Great Lakes would have catastrophic consequences to Michigan’s environment and economy,” Peters said in a statement. “Michiganders deserve to know the full extent of the damage to Line 5 from last year’s anchor strike — because there’s simply too much at stake. I urge the Coast Guard to swiftly conclude their investigation into last year’s anchor strike and to release the investigation’s results publicly given Michiganders’ understandable concerns.”

Gov. Gretchen Whitmer directed the state Department of Natural Resources on Wednesday to file an emergency rule requiring large vessels to verify no anchors are dragging before passing through the Straits. A formal request also was made to the U.S. Coast Guard to create a similar rule for all foreign vessels operating in the Straits of Mackinac, which lie beyond state authority.

Then-Gov. Rick Snyder’s office, in an April 2018 news release regarding the anchor strike, said Enbridge officials characterized its impacts on Line 5 as “very small” and posing “no threat to the pipeline.”

Enbridge spokesman Ryan Duffy, in an email to the Free Press, said the affected areas of the pipeline were reinforced last summer. The company has since provided funding for cameras to give the Coast Guard real-time monitoring of ship activities in the Straits, he said.

Shriberg called the video “shocking.”

“There are deep gouges in the pipeline. And you can see where the anchor dragged along the bottom and skipped right off the pipeline. It’s one thing to hear about it or read about it; it’s another thing to see the visual evidence. I would guess that’s why Enbridge was trying hard not to get this visual evidence out into the public eye.”

Enbridge Vice President David Bryson called the inspection video “confidential” during Senate committee testimony.

Shriberg called it “luck” that the anchor strike occurred on a portion of Line 5 resting on the lake bottom, as opposed to one of sections where the pipeline is lifted by supports.

“There’s a very realistic scenario where the anchor snags off it rather than skipping off the pipeline,” he said. “And there are areas of suspension very close to where this anchor hit.

“If you hit a suspended portion, all that force, the anchor is designed to grab and hold. You’ve got the force of a boat pulling against it.”

Enbridge negotiated a deal with the Snyder administration in its final days in office late last year to build a replacement pipeline in a new tunnel, drilled below the Straits bottom, an up to 10-year, $650 million project.

The corridor would be large enough for vehicles to drive through, allowing inspectors the ability to assess the condition of the pipeline.

Under the agreement, Enbridge would build the utility corridor, and, upon completion, hand over its ownership to a state authority. Enbridge would then be provided a 99-year lease for use of the corridor, and would remain responsible for operating and maintaining the tunnel. Earlier proposals to make the state lease-holder by the Mackinac Bridge Authority were scrapped in December, citing concerns that taking on such a responsibility would muddle the authority’s bridge operation and maintenance duties.

Whitmer in March halted all state agencies’ work on a Line 5 tunnel proposal, as new state Attorney General Dana Nessel issued an opinion that the legislation that allowed for the tunnel plan was unconstitutional.

But Whitmer then continued negotiations with Enbridge, and has since signaled a willingness to proceed with the tunnel plan if the shutdown of the existing, 66-year-old Straits pipelines can happen more quickly.

Michigan AG Nessel: I’ll move to shut Great Lakes oil pipeline if talks fail

Enbridge didn’t tell state about Mackinac Straits pipeline problems for 3 years

Opinion: Rolling the dice with Enbridge, Line 5 and the Great Lakes. Again.

Noted Duffy, “Going forward, the Line 5 tunnel project in the Straits would eliminate the possibility of an anchor strike, because the pipeline would be inside a tunnel with foot-thick concrete walls, approximately 100 feet below the lake bed.”

But that project could be a decade or more away, with the aging pipelines continuing to operate in the Great Lakes, Shriberg said.

“What this (video) shows you is a tunnel cannot be in place soon enough to protect the Great Lakes,” he said. “It’s an urgent issue.”

Contact Keith Matheny: 313-222-5021 or Follow on Twitter @keithmatheny.


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GM’s potential Lordstown sale draws scrutiny [The Detroit News]

May 13– May 13Brian Milo isn’t impressed with a potential sale of his hometown plant to electric-vehicle start-up Workhorse Group Inc.

Jaded by nearly a year of unemployment, the laid-off General Motors Co. line worker also isn’t impressed by the political fanfare and a presidential tweeting last week celebrating a possible fresh start for the automaker’s Lordstown Assembly in Ohio.

“I’d rather see GM invest in Lordstown and repay us for how we bailed them out,” Milo said. But “if they feel that they are not going to utilize Lordstown, I’d like to see a viable company use the facility.”

Milo, who voted for Trump in 2016, isn’t alone in his skepticism about the plans. In the days following President Donald Trump’s tweet and GM’s announcement, Workhorse’s “viability” is a shared concern for some Lordstown workers, union leaders and industry experts, who cite its shaky financial condition. But GM, according to people familiar with the talks, was ready to make its negotiations with Workhorse public prior to the president’s tweets — a decision not made lightly.

The Detroit automaker, amid a global restructuring and nearing contract negotiations with the United Auto Workers, says it won’t assign a new vehicle to the plant. And the most desirable alternative is finding another automotive manufacturing operation.

“In repurposing a plant, the best and highest use of an automotive assembly plant is automotive assembly,” said Kristin Dziczek, vice president of Ann Arbor-based Center for Automotive Research. “The next best use is manufacturing of any kind, but it doesn’t have the same impact on job creation and the economy.”

GM has been in talks with interested buyers for months, with Workhorse approaching the company in January, according to a person familiar with the talks. Workhorse ticked all the boxes, the person said, including offering continued vehicle production — a key driver of economic development with historically high job-multiplier effects.

Workhorse’s plan, as presented last week, would be a best-case scenario for repurposing, particularly in a rural area like the Mahoning Valley, said Valerie Satche-Brugeman, a CAR researcher who co-authored reports in 2011 and 2012 on the repurposing of automotive manufacturing facilities.

“Closed factories in urban areas have a much higher chance of being redeveloped,” she said. “If the plant closes before a redevelopment plan is made, there is a very low chance it returns to manufacturing again.”

Satche-Brugeman’s 2011 report found that age plays a factor in whether a plant is repurposed, with plants under 46 years old finding the most new uses. Opened in 1966, Lordstown is 53 years old.

Two former GM assembly plants offer examples of potential fates for Lordstown.

After General Motors Baltimore Assembly closed in 2005, the property was sold to a real estate development company for $27 million. It was converted to various corporate residences and warehouse operations, a project that CAR’s report estimated would have cost the real estate developer a total of $150 million over 10 years.

GM’s former assembly plant in Moraine, Ohio, near Dayton was one of a handful closed by the Detroit automaker in 2008 as the company edged toward its federally financed bankruptcy. The plant sat empty until 2014, when a Chinese automotive glass manufacturer, Fuyao Glass Industry Group Co., purchased the plant. Fuyao started operating in the plant the following year.

Workhorse’s potential manufacturing operation at Lordstown, which the company declined to detail at this early stage, would employ “hundreds” of workers to start with room for growth in the sprawling 6.2 million-square-foot assembly and stamping facility. Lordstown was employing 1,435 union-represented workers on one shift before it stopped production of the Chevrolet Cruze in March. That had diminished from more than 4,000 when the plant was operating with three shifts.

“There was also once a little start-up called Tesla building a couple-hundred electric vehicles at a huge plant in Fremont, California,” GM spokesman Jim Cain said, referring to Elon Musk’sTesla Inc. operating out of a plant once jointly operated by GM and Toyota Motor Corp. “Workhorse has defined a similar niche in (electric) commercial vehicles; they’re one of the finalists to build new trucks for the U.S. Postal Service — there is some substance there.”

But to Jeff Schuster, an industry analyst for LMC Automotive who tracks both GM and Workhorse, the thought of Cincinnati-based electric truck-maker taking over Lordstown is “head-scratching.”

“Workhorse appears to be a very slow-moving venture that has a lot of risk, and no massive amount of funding,” Schuster said. “Lordstown is a massive facility, and despite some investments over the years, I don’t believe it would be easily converted to build electric pickups without substantial investment.”

Workhorse sees a way around that funding problem. The company plans to create an acquisition entity, of which it would be a minority stakeholder. That new entity would own Lordstown and use Workhorse technology and intellectual property to build a vehicle

Workhorse spokesman Tom Colton declined to comment on where that investment stands or to identify any potential backers.

Still, LMC estimates Lordstown would need to produce 410,000 vehicles per year to reach full capacity, the watermark for profitability. Schuster says his team estimates Workhorse’s electric pickup truck production potential between 5,000 and 10,000 trucks per year.

United Auto Workers Local 1112 President David Green, who represents union workers at GM’sLordstown plant, says he’d rather focus on efforts by the UAW’s international leaders to pressure GM on reopening Lordstown.

The UAW is suing GM for its plans to “unallocate” Lordstown, Warren Transmission and Baltimore Operations before the current contract expires. DetroitHamtramck is not included in the lawsuit because its production was extended through January 2020, after the current contract expires. Union leaders, who balked at GM and Workhorse’s announcement last week, also are expected to demand a new product for Lordstown during contract negotiations this fall.

“All we have now is more drama, more anxiety,” Green said of the GM-Workhorse announcement.

GM’s Lordstown Assembly, one of five North American plants GM said it would idle as it executes a global restructuring, has become a political football for Trump. Lordstown’s surrounding Trumbull County delivered Ohio to Trump in 2016 as the former Democratic stronghold flipped Republican.

Despite the president’s celebration last week, Green says a lack of real answers is only adding to the anxiety in Lordstown.

“Nothing about that has changed,” he said. “The closer we get to contract talks, the only thing that changes is the anxiety level. It’s like having a loved one on life support and trying to decide whether to pull the plug or wait it out.”

Twitter: @NoraNaughton


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Accused spy Paul Whelan to lawyers: I used work visa to get into Russia [Detroit Free Press :: BC-USRUSSIA-WHELAN:DE]

DETROIT _ Paul Whelan, the Michigan businessman accused of spying in Russia, entered the country on a business travel visa supported by BorgWarner Inc., he told his lawyers in Moscow.

Whelan, 49, of Novi was the director of global security for the Auburn Hills-based auto supplier when he traveled to Russia on Dec. 22 for the wedding of a friend. He was arrested six days later by the Russian Federal Security Service (FSB) and charged with espionage.

He remains in a prison cell at Moscow’s czarist-era Lefortovo Detention Facility, held without much more information about the accusations against him than he knew on the day when he was initially detained.

“He was caught red-handed,” Russian Foreign Minister Sergey Lavrov said at a news conference following Whelan’s arrest in his hotel room at the upscale Metropol hotel in Moscow. In his possession was a flash drive containing what Russian authorities say was sensitive information.

It’s a claim his family denies.

“Paul thought a friend of 10 years was giving him some photos of his hometown,” on the flash drive, said his twin brother, David Whelan, in an email message. Whelan holds U.S., British, Canadian and Irish passports. If he’s convicted of spying, he could be imprisoned for up to 20 years.

Since his arrest, Russian authorities are limiting Whelan’s contact with the outside world, but he has been able to communicate some details about the case to his family through his lawyers. Among those details: BorgWarner helped him get into Russia by sponsoring his visa, and he believes his arrest might be tied to politics involving U.S. sanctions.

BorgWarner has 30,000 employees around the world with 68 locations in 19 countries, but it doesn’t have facilities in Russia, said company spokeswoman Kathy Graham.

The company would not confirm that it sponsored Whelan’s Russian business visa.

“As a general policy BorgWarner does not comment on travel of any of its employees, nor does the company discuss information about individual customers,” said Graham in an email to the Free Press. “Paul was not in Russia on company business. We are deferring to the State Department regarding updates to his situation.”

Although BorgWarner operates no facilities in Russia, the company does have a history of doing business there.

BorgWarner supplied Kamaz Inc., Russia’s largest truck-maker, with turbochargers, fan drives and high-performance fans, according to U.S. Securities and Exchange Commission documents. BorgWarner parts are used in nonmilitary Kamaz trucks and Nefaz buses, and its total sales to Kamaz from 2013-15 through non-U.S. subsidiaries was $12.1 million.

“For over 15 years, BorgWarner has supported (Kamaz) with advanced air-flow technologies, and we are looking forward to continuing the successful collaboration,” Daniel Paterra, who was then BorgWarner’s president and general manager of thermal systems, said in a 2015 news release about the Dakar Rally, an off-road rally in South America in which Kamaz trucks are used.

About a year after Paterra made that statement, the SEC submitted a letter to the president and CEO of BorgWarner, asking for details about the company’s dealings with Kamaz, which was reported to have delivered trucks to Syria and Sudan.

Sudan and Syria are designated by the State Department as state sponsors of terrorism and are subject to U.S. economic sanctions and export controls,” wrote Cecilia Blye, chief of the SEC’sOffice of Global Security risk in a letter to the company dated April 14, 2016.

“We are aware of publicly available information indicating that your subsidiaries have provided turbocompressors, fan drives and high performance fans to (Kamaz) Inc. and news reports indicating that Russia has delivered (Kamaz) military trucks to the Syrian Army.”

The company responded in a letter later that month, writing: “There were no direct or known indirect sales or exports from BorgWarner Inc. … or its subsidiaries … to Sudan or Syria in 2013, 2014 or 2015.

“Non-U.S. subsidiaries of BorgWarner have had and in the future may continue to have de minimis light vehicle/non-military automotive business with customers in Sudan and Syria. U.S. law does not prohibit non-U.S. subsidiaries of U.S. companies from engaging in transactions with Sudanian or Syrian customers that do not involve exports or re-exports subject to U.S. jurisdiction.”

BorgWarner declined to provide the Detroit Free Press with a specific explanation of what it meant by “de minimis” in its response to the SEC, although generally the term is used in legal references to suggest something so small or minor, it is insignificant.


“There are some very good and reasonable questions to be asked from BorgWarner,” said Ryan Fayhee, a Washington, D.C.-based attorney and former U.S.Justice Department prosecutor who is working on behalf of the Whelan family. “There’s an open question right now around the role of a company when their employee, who did not go there for work, but they sponsored his visa, and they have meaningful operations in Russia. They don’t have an office there, but what they do have is … very, very meaningful relations with a company called Kamaz.

“Kamaz is a very interesting organization because it is actually headed by a businessman who was the co-chair of Vladimir Putin’s re-election campaign. … I wish this was a conspiracy theory. It is not.”

The director general of Kamaz is Sergei A. Kogogin, who was, in fact, the co-chair of Putin’s 2018 reelection campaign.

The largest shareholder in Kamaz (49.9%) is a government-run defense technology company called Rostec Corp., which produces such military products as high-precision artillery munitions, artillery shells, rocket launchers, ammunition, along with aircraft and bomb weapons, among other things.

The director general of Rostec is Sergey Chemezov, who is among the most powerful people in the FSB, according to the Warsaw Institute, a Polish think tank focused on international relations, energy security, defense and other issues important to Poland and east-central Europe.

Rostec was sanctioned by former President Barack Obama’s administration after Russia invaded Ukraine. And Chemezov was barred from entering the U.S.

“I’m not suggesting BorgWarner has done anything wrong,” Fayhee said, “but I would suggest … what role can the company have in the horrible, unfortunate situation where one of their employees has become a political pawn? And how do they act, what should they do, and how do they manage it?”

BorgWarner declined to answer questions about its efforts to help recover Whelan from Russian authorities. Fayhee said the company has been less than forthcoming with the Whelan family and in answering his questions, too.

“The big question in the beginning was and still is, … what, if anything, with respect to the company may have contributed to Paul’s arrest?” Fayhee said. “For example, did somebody visit Paul in Detroit, or email or corresponded with him at the company? … You know, if there’s a missing person, you interview his family, you interview his company and you take all these reasonable steps to determine what was done … things like doing some sort of internal review or gathering materials, forensically or otherwise to help support the government in its effort to examine what would have led up to Paul’s arrest and disappearance.”

Yet, Fayhee said when he asked BorgWarner whether any such internal review had been done, an attorney for the company told him it is more concerned with its reputation in the news media than conducting an investigation.

The response surprised him.

“What is clear is that Paul, and the family really deserve more out of BorgWarner,” Fayhee said. “They deserve a dialogue. … The family very much wants to engage in even a private dialogue with the company in order to make sure they are doing everything they can do to secure Paul’s recovery.

“That’s really at the core of it. The statements made by their lawyer, the fact that they’re not speaking directly with the family is really troubling to say the least.”

Through its spokeswoman, BorgWarner issued this statement in response to Fayhee’s criticisms: “BorgWarner worked closely with the family before they engaged their own attorney, and it has coordinated with the State Department and other government agencies since Paul’s arrest, and will continue to coordinate where appropriate, to help bring Paul home safely.”

David Whelan said there’s no indication that his brother’s work for BorgWarner has anything to do with his arrest in Russia.

“We are not aware of BorgWarner’s business connections to Russia beyond what’s in the public record,” David Whelan said. “We don’t have any reason to believe Paul’s situation has anything to do with BorgWarner, other than that it is an American-based company.

“However, we do think that he was targeted by the Russian police because he was an American businessman. Unfortunately, the FSB appears to have miscalculated whatever result they helped to extort out of Paul’s false arrest. Paul has shared notes through his lawyer that he believes his arrest has some sanctions-related element, but we don’t know why he says that. But there’s no indication it has anything to do with BorgWarner.”


In recent weeks, bundles of handwritten letters from Russia have arrived at the Manchester, Mich., home of Whelan’s parents, Rosemary and Edward Whelan. The letters from their son have been censored by Russian authorities, but still are a welcome sight, his brother said.

“My mum and dad received about 75 letters, in three groups … over the past 10 days or so,” David Whelan said. “They’re handwritten notes from Jan. 18 onward. … They describe his day-to-day in jail. As they went through the routine prison censoring, before being held by the FSB investigator for months, they are purely day-in-the-life.

“We haven’t really learned anything that helps us with seeking his release, but they are comforting for my parents. You can hear his ‘voice’ in them, and a letter can be read and re-read while they wait for his return.”

Since his arrest, Russian authorities have limited Whelan’s access to his lawyers and consular services. He has not received mail or phone calls or the English-language books, including an English-Russian dictionary.


Even Jon Huntsman Jr., the U.S. ambassador to Russia, has been restricted in what he’s allowed to discuss with Whelan.

During an April 30 meeting with Whelan at the prison, Huntsman was not allowed to read letters from his family, to ask him to sign a power of attorney, and was banned from “talking about anything that actually matters,” said Andrea Kalan, a State Department spokeswoman, on Twitter.

“Why haven’t Russian officials provided proof? Perhaps it’s lost along with Paul’s mail. Complete lack of evidence + Paul’s isolation = greater likelihood officials will try to get a forced false ‘confession.’ Stop playing games.”

David Whelan said his family is concerned that his brother has been interrogated without the presence of his lawyers or his translator, and noted that his attorneys in Moscow, Vladimir Zherebenkov and Olga Karlova, were appointed by the FSB.

In addition, his brother’s signed Privacy Act Waiver was held up for months by Russian investigators who alleged the document was lost in the mail. And now, a similar delay is keeping the family from getting access to a signed power of attorney, which would grant them the ability to manage his affairs at home and help him choose his own attorney in Russia.

“There’s a real concern that … at some point given the isolation, the limited access, a lawyer that doesn’t even speak English, that at some point that affects your psychiatric health,” Fayhee said. “Maybe that’s done to try to extract some kind of confession out of him or to get him to say something on the record so the Russians can then use that as the basis of his continued detention. It’s difficult or impossible to know. But we shouldn’t understate the potential effects of being isolated the way he’s being isolated.”


Whelan’s next hearing in Moscow City Court is happening at the end of May. His detention could be continued at the hearing, or, Fayhee hopes, Russian authorities could let him go.

“We hope they find this as an opportunity to acknowledge that the allegations … have not been substantiated and that they’ll release him. That would be the appropriate thing to do under the circumstances.

“But the family is prepared also for the possibility that the detention will be extended for another three months in order to further isolate him, in order to extract whatever benefit it is that they’re seeking to achieve whatever goal Paul is being used to achieve.”

In April, the U.S. State Department issued a travel advisory for Americans going to Russia, suggesting increased caution because of terrorist threats, and a risk of being harassed, mistreated, arbitrarily interrogated, detained or targeted for extortion.

“There is no doubt in our minds that Paul’s arrest and imprisonment amount to a kidnapping by the Russian police,” David Whelan said. “We hope the new designation will help other Americans avoid the same fate.”


State Department spokeswoman Julia Mason said the department is continuing to closely follow the Whelan case.

“We urge the Russian government to guarantee a fair and transparent judicial process without undue delay, in accordance with its international legal obligations,” she said. “We have visited Mr. Whelan seven times since he was first detained. We will continue to press for fair and humane treatment, due process, and access to appropriate medical care.”


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Texas’ Strong Economy, Pro-Business Attitude Make It a Top State for Truckers

Trucking companies prosper in Texas

Keep on truckin’. That’s the message the Lone Star State sends over-the-road owner-operators looking to make it big in the transportation and logistics business.

In 2016, more than 3,000 trucking industry professionals throughout the U.S. were surveyed to determine the best and worst states to own and drive a truck. The survey revealed Tennessee as the nation’s best for truckers, with California “raking the leaves” at the back end of the convoy.

The survey factored several items to determine its rankings. These included cost of overnight parking, fees/regulations, if location in the U.S. mattered, and how friendly states were to drivers. Texas finished a solid fourth in the best state’s derby. Were there to be another survey, it’s likely the state could finish higher thanks to the state’s “put the hammer down” pro-business attitude and economy.

Texas benefits from a strong economic base that often booms when times are good and weathers slow times better than the rest of the nation. This creates and sustains demand for consumer and industrial goods and products, goods and products that must be transported over the road. Small trucking companies have plenty of opportunities to compete for these loads, even outfits new to the market. In addition, Texas is home to three of the nation’s largest cities and one of America’s biggest ports. It’s no surprise that Texas cities ranked among the Top 10 in several freight transportation categories in a 2018 trucking survey by DAT Solutions.

The Lone Star State also has a business-friendly agenda. This means fewer laws and regulations that add to costs, sap cash reserves and make doing business harder. These include complex labor and environmental laws that can be burdensome for trucking companies of all sizes, but smaller ones in particular.

In 2018, Texas won CNBC’s annual Top State for Business in America award. It was the fourth time Texas has won top prize in the award’s 12-year existence. Texas Gov. Greg Abbott explains:

“When given the freedom to aspire, Texans risk their own capital and invest in themselves and others by opening businesses large and small. And success is contagious. New business formation in Texas is at a five-year high. Start-ups are growing here right alongside Fortune 500 companies and more than 2.6 million small businesses. It’s no surprise that Texas is ranked by CEOs as the best state for doing business, now for the 14th year in a row. As one Texas entrepreneur puts it: ‘If you like big ideas … build your business in Texas.’”

Meanwhile, Texas placed third in a similar Forbes magazine survey of best states for business.

Texas’ low business taxes and lack of an income tax make it an attractive place to open a business of any size. It’s a top state in terms of access to the capital a business like a trucking outfit needs to expand and grow.

Texas is a big place with tens of thousands of miles of highways. The state has invested heavily in infrastructure and roads in both rural and urban areas. Better and less congested roads make a trucker’s job easier.

Whether you’re eastbound and down, westbound or any other direction, Texas should rank high on your list of places to locate a trucking firm. 

Once you’ve set up shop in the Lone Star State, you may find you need to add employees, buy new equipment or improve your cash flow. If so, consider invoice factoring. Invoice factoring allows you to “sell” your accounts receivable invoices to a factoring company. The factoring company pays you upfront for outstanding invoices, giving you the cash you need today to run your business, and eliminating the worry and hassle of slow pay collections, leaving you free to run your business. Invoice factoring is a convenient alternative to a traditional bank loan or fee-laden online loans and risky crowdfunding. Each of these sources require a long-term contract. Factoring, however, gives you the money you need when you need it with no long-term obligations. You can also get cash quicker through invoice factoring – usually within a day or two. If you would like to learn more about how invoice factoring works and how it can put your cash flow into the fast lane, simply call toll-free 1-855-219-6008 or email

Effort to repeal Colorado’s new oil, gas law is dropped — for now, sponsors say [The Denver Post]

April 26– Apr. 26–The sponsors of a proposed initiative to repeal a new law overhauling oil and gas regulations aren’t moving forward with plans to put it on the ballot — for now.

They pledge to try next year if their predictions of cuts in oil and gas jobs, reduced state and local tax revenue and negative impacts on other businesses come true.

Weld County Commissioner Barbara Kirkmeyer and former Arapahoe County Commissioner John Brackney filed ballot proposals in early April to reverse Senate Bill 19-181, signed into law April 16. They were aiming for the 2019 ballot.

However, state election officials, who review proposals for placement on the ballot, rejected the measure last week. They said it violated the rule limiting an initiative to only one subject.

Kirkmeyer and Brackney requested a second hearing, but decided Thursday to shoot for 2020 instead. The rehearing, set for Friday, was cancelled.

“We’re going to be a little patient. We lost in the first hearing and we’re probably just going to accept that decision, although we don’t like it and don’t think it’s the right decision,” Brackney said.

And while there was strong support in the oil and gas industry for a ballot proposal, there was also a reluctance in some quarters to move forward without first seeing how the law is carried out, Brackney added. He noted that legislators made changes to the bill during the hearing process that were sought by the industry.

“I think a horrible bill was made not quite so horrible,” Brackney said. “Now, is it a good bill? I don’t think I’d go there yet.”

Kirkmeyer said during legislative committee hearings that the new regulations would devastate the economy of Weld County, the state’s No. 1 oil and gas producer.

Business organizations, some local elected officials and oil and gas representatives warned the law will undermine an industry that a report commissioned by the American Petroleum Institute said contributes about $31 billion to the Colorado economy and supports roughly 232,000 jobs.

Kirkmeyer said in a statement that the ballot proposal “has been sidelined for 2019 on a technicality and behind-the-scene maneuvering.” She said with the executive and legislative branches “controlled by extreme liberal Democrat politicians, we knew the deck was stacked against us going into this.”

A number of supporters have committed funding and resources and vowed “to go the distance,” Kirkmeyer said. “We plan to come back stronger, defend our state, our families and re-file a refined ballot initiative for 2020.”

The Colorado Oil and Gas Association wasn’t directly involved with the initiative and hasn’t taken an official stance, Scott Prestidge, the trade group’s spokesman said in a statement. COGA said it is committed to taking part as state officials write new rules for the law, Prestidge said, but shares “the commissioners’ concerns on how this new law could impact Colorado’s oil and gas families.”

The ballot proposal would have reversed the changes made by SB 181, which make protecting the public health, safety and the environment a priority when considering oil and gas development. It also clarifies that cities and counties can regulate oil and gas under the same planning and land-use powers they use to regulate other activities.

The initiative would have replaced the Colorado Oil and Gas Conservation Commission, the main regulatory body, with what it described as an independent body. It would have rolled back the new oil and gas regulations.

One consequence would have been elimination of all oil and gas rules for up to six months, or until a new commission could be formed and rules could be readopted, said Matt Samelson, an environmental law attorney in Denver.

“I don’t believe that’s accurate,” Brackney said, “but we did write it in the heat of the legislative session.”

A 2020 proposal would make clear that the old rules would be in force while a new commission is formed, Brackney added.

Conservation Colorado, which supports the new law, challenged the initiative.

“It’s good to see that these initiatives are off the table for now, but these irresponsible proposals should never have been put forward in the first place,” Kelly Nordini, Conservation Colorado’s executive director, said in a statement. “I hope Colorado can move forward and put the health and safety of workers and communities and our environment first without further industry obstruction.”

Brackney, the former CEO of the Southwest Metro Denver Chamber of Commerce, said it’s unfortunate the debate over oil and gas development is dominated by what he views as extreme positions.

“It’s actually a shame that both sides posture themselves as saying, ‘Oh, it’s just crazy liberal environmentalists or it’s just Big Oil,’ because I refuse those titles,” Brackney said.

However, Brackney said he thinks environmentalists will pressure local elected officials to block drilling in several cities and some counties.

Samelson said he doesn’t see that happening. He thinks the new law will be applied case by case, depending on the city or county.

“Many areas of the state are not going to see local governments taking much action on this,” Samelson said. “Certainly, there will be some local governments who will flex their muscles.”

A few cities and counties might temporarily put oil and gas activity on hold while they review their regulations, Samelson added. “But the whole idea of bans is farfetched.”

State regulators have started work on rules to implement the law. An interim oil and gas commission will be appointed soon and a permanent one will be formed by July 2020.


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