Jul. 1—A decade ago, Verus Research launched in Albuquerque. The small startup was seeking to provide sophisticated research in the field of directed energy.
The handful of founders had been working in the aerospace and defense industries, including experience with directed energy. The Air Force Research Laboratory’s Directed Energy Directorate is based in Albuquerque on Kirtland Air Force Base, so it was a logical spot for the company.
Flash forward 10 years, and Verus Research is an example of how Albuquerque and New Mexico’s unique economies create their own ecosystems that build on themselves.
Public policies, competitors and collaborators and a readily available workforce are all factors in the future of the different sectors, according to local business leaders. In the coming weeks, Outlook plans to dive into those factors in a series of stories about the opportunities and struggles for different businesses throughout the state.
Hank Andrews, the managing director and chief operations officer for Verus Research, said the company — with the U.S. military as its primary customer — has the right spot.
“In our case, we’re delivering very sophisticated research outcomes. And the ecosystem for that kind of work — very high-level scientific engineering activity — the ecosystem for that here is excellent,” Andrews said.
Verus Research today has four locations and more than 150 employees in Albuquerque, many who hold PhDs in advanced sciences. The company works with not only directed energy, but it also aims to solve space-related problems and test and evaluate nuclear systems for the Department of Defense. The company retrofitted an old Babies “R” Us building into an advanced research and development laboratory.
It has inked a contract with the Department of Defense for more than $200 million, in addition to smaller contracts with military agencies and other partners.
Verus Research is just one example of a major economic development engine in the state spawned from one unique aspect of New Mexico’s economy, of which there are many.
A water company in the desert
Another example is Infinity Water Solutions.
Mike Dyson, the president and CEO, said Infinity — an Austin, Texas-based company — has been operating in Southeast New Mexico since 2019 and aims to be a successfully counter the fact that New Mexico is both a major oil producer and a desert state in the midst of a serious drought. The state also has rules and regulations that oil producers must follow when it comes to wasting produced water during the extraction process.
Infinity has a network of pipelines and storage facilities in the southeast part of the state in the Permian Basin.
The company collects water from oil and gas companies that used the water to frack, leaving contaminated water — or produced water — that needs to be treated.
Dyson said Infinity will treat the water and then sell it back to an operator so the water can be reused.
“If Infinity is doing its job correctly, a barrel in should equate to a barrel out,” Dyson said.
Dyson said that since 2019, the company has invested $30 million in Southeast New Mexico into its pipeline, two treatment facilities and a storage area. Infinity can treat 125,000 barrels of water per day and store 3 million barrels.
The company has announced it plans to invest an additional $75 million in in Southeast New Mexico in coming years. It will add at least five more treatment facilities and increase its capacity to treat 450,000 barrels of water per day. Its storage capacity will increase from the 3 million barrels to 20 million .
Dyson said the company is working with a major bank to significantly increase that investment.
Most of the company’s work is in New Mexico, as opposed to its home state of Texas.
Dyson said that’s because of the Produced Water Act. The act went into effect in 2019 and set clear standards for how to treat produced water used during oil and gas production.
“New Mexico has the perfect confluence of geology, geography and government,” he said.
The act, Dyson said, laid out rules and regulations for produced water. The company has found a way to capitalize on those rules and regulations.
“I just needed to know what the standards are,” he said. “Got it. I’ll take it from here.”
Common needs
From an advanced research lab in Albuquerque to a water operator in the oil patch in Southeast New Mexico, a common factor needed for growth and development is a workforce.
For Verus Research, the company benefits from a competitive tech ecosystem. Many of the company’s employees were recruited from national laboratories or other industry competitors.
“You have, obviously the national laboratories, you have AFRL, you have other elements of the defense industrial base here that really do make this a rich environment in which to cooperate, collaborate and thrive,” Andrews said. said. “We actually have great success attracting people to New Mexico. … The technology ecosystem here is a rich pool for both collaboration and, dare I say, competition, including for talent.”
Dyson, who said he will be hiring laborers and technicians as his company’s footprint in the state expands, said he will need employees trained in technical trades. He said it was promising when he made a recent visit to Hobbs and saw billboards that said “Keep our kids here” and was briefed on the Career and Technical Education Center of Hobbs, which is training high school students in high-level technical skills.
“You have a lot of of really thoughtful and innovative people in Hobbs,” he said. “Hobbs-Carlsbad, you’re the energy corridor.”
Opportunity and struggles
The state is a land of an encouraging future and longstanding setbacks.
Mark Benak, the chair of the Sandia Foundation who in 2022 completed Harvard University’s Advanced Leadership Initiative , where he examined, researched and brainstormed solutions on different parts of the state’s economy — what advantages does the state have and what is holding it back?
“I thought, this is a time where I can put my energies toward fixing New Mexico, which I say somewhat tongue-in-cheek, because it’s a bigger problem than any one person can fix,” he said.
The problems facing New Mexico are by no means small. The state ranks at or near the bottom, consistently, in pre-K-12 education. Food security and poverty metrics also place the state as one of the worst in the U.S.
Albuquerque and New Mexico are also both comparatively violent , and violent crimes have publicly devastated families as crime has become a hot-button political issue locally. State lawmakers are meeting in the coming weeks for a special session on the issue.
Rob Black, the president and CEO of the New Mexico Chamber of Commerce, said the Chamber is hopeful that investments New Mexico has made with the Opportunity Scholarship and in early childhood education will ultimately have a positive impact on the local economy.
“The U.S. Chamber sees the access to affordable quality child care as a key driver for the economy,” he said.
But the state has plenty of advantages as well. The oil and gas industry is booming. The Permian Basin is one of the most active and productive drilling sites in the country, especially the portion of the basin in Southeast New Mexico, according to U.S. Energy Information Administration. The state is second only to Texas in oil production, and extractive industries delivered over $15.2 billion in revenue to the state in 2023, which funds a significant portion of the state’s budget.
New Mexico also has the third-largest sovereign wealth fund in the U.S. behind Texas and Alaska. The funds are used for education, workforce development and other initiatives.
New Mexico is also an emerging leader in renewable energy. About 38% of the state’s total electricity net generation came from wind in 2023, and wind power generation was more than six times greater than in 2015, according to EIA.
Industry partners, Central New Mexico Community College and others are working together to shore up a future workforce needed in the state.
The state has also long been a key player in the space industry.
That’s not to mention some of the other intangibles that make New Mexico jump out, like beautiful weather and sunshine, mountain ranges, high desert landscapes and a culturally diverse society with its own unique cuisine and customs.
Black said traditional energy and the transition to renewable sources are both key drivers of the state’s economy. He said that even when some industries close — the San Juan Generating Station, a coal-fired power plant, and its affiliated San Juan Mine are shuttered — it created a potential workforce in the northwest corner of the state.
“You throw in oil and gas and the potential on things like hydrogen and carbon capture sequestration, all those things we could lean on because we have the workforce that we could pull from oil and gas, and from the Four Corners (region) as well,” Black said. “So energy is a big player for us.”
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