Lea County: diversifying as it grows

New Mexico Business Journal, Sept, 1997 by Gailanne Dill

Add a prison and a vinegar plant to beef and dairy cattle, peanuts, oil and gas and you have a rich mixture

Like great prehistoric birds thirstily drinking at watering holes dotting the hillside, the oil pump jacks do a rhythmic dance in the fields in Lea County. Miles of green farmland surround the communities of Hobbs, Lovington, Eunice, Jal and Tatum. Both produce yields important to New Mexico.

With oil and gas prices higher than they have been in years, business is booming in Lea County, which has some 40 different oil and gas companies.

"Everyone is busy. Right now a lot of us have more work than we have people to do the work," said Lonnie Staurd, operations manager for Dawson Production Services. He said prices for a while hit $23 per barrel and have leveled off at about $18 per barrel. With bigger budgets, the oil and gas companies can do more work and are therefore hiring more people.

The beef cattle industry was king in Lea County until the 1920s when oil and gas came in. The industry reached its heyday in the 1970s, but has remained a key player in the area ever since. Still a major presence, agriculture involves beef cattle as its biggest commodity, the dairy industry as its fastest-growing entity with an estimated 15,000 cows and farming as a stable part of the economy.

Lea County is second in the state in peanut production after Roosevelt County. Other crops include alfalfa, corn for silage and cotton. Outside of Lovington, a new dairy is underway that will have 4,000 cows, making it the largest dairy in the county. Using 1.6 million pounds of milk a day from the area and other counties and states, Lea County Cheese Co., in Lovington, produces 160,000 pounds of Cheddar a day which is made into sliced and processed cheese. The whey is sold to Southwest Dried Products, which makes whey protein concentrate, a product used for baked goods, animal feed and infant formulas.

But oil, gas and agriculture aren't the whole picture. Developments on the forefront such as the construction of a proposed 1,200 bed state prison to be built north of Hobbs and new businesses could provide a greater diversity.

"The prison will create 400 to 500 jobs. It will spread out our economic base so that it is not totally dependent on oil and gas," said Lea County Commission Chairman Ken Batson. Batson, who has been on the commission during its 2 1/2-year effort to secure a state prison, said the project plans are awaiting the approval of the Attorney General. The prison is designed like Cibola County's prison and is expected to receive the green light soon. Hobbs's citizens gave the proposed prison a 74 percent favorable rating in a recent survey.

Hobbs, with a population of 32,000 people is the country's largest community. It has seen steady growth, says Bo Thomas, the city manager. Hobbs is working on economic development issues such as the prison and the construction of a vinegar plant. A 10-year, $45 million, capital improvements program for utilities is expected to begin this year. The work includes water line replacement and improvements in two-thirds of the community as well as composting plans for its wastewater treatment plant.

In the future, the Hobbs will undertake a $2 million project for communications and renovations for its police, fire and ambulance services. The communication improvements include a 800 megahertz radio system replacing old equipment.

Hobbs Beautiful, a Keep America Beautiful affiliate, was instrumental in citywide household hazardous waste collections this year, which it is expanding to the county. Since many chemicals are restricted from landfills, household hazardous waste collections provide residents with free disposal. The service cuts down on illegal dumping and protects the environment.

The College of the Southwest in Hobbs is also experiencing growth. In the last 10 years, enrollment has tripled at this private institution with an expected fall enrollment of 650 to 680 students. A capital campaign is underway to seek funding from various sources for the construction of more dormitories and classrooms and the hiring of additional faculty. Now offering a masters degree program in education, the college expects to see continued growth, according to Registrar Glenna Ohaver.

It's not the only area school that's growing. New Mexico Junior College just outside of Hobbs, had a record enrollment of 3,000 this year and is expecting the trend to continue. Don Wilson, vice president for instruction, said the school has seen a 1 to 2 percent increase in enrollment. Nursing is a growing area and basic education courses have maintained a steady interest.

Growth hasn't been limited to Hobbs. For example, Eunice, with a population of 2,600 people, is beginning a $300,000 street project with Community Development Block Grant (CDBG) funds. A police complex almost completed. With $100,000 from Eunice and $300,000 from the state, the old hospital has been converted into a state-of-the-art police facility.

The City of Lovington, with a population of 9,322 people, is seeing economic development and the construction of new homes according to City Manager Bob Carter. BOC Gas, a hydrocarbon processing plant used for cotton and microchips, is building a $10 million facility in Lovington's industrial park. The community has seen the opening of three new restaurants and two mobile home dealers. This summer, a $500,000 overhead water tower containing 200,000 gallons will be constructed.