  We consider the details of the QED processes that create electron-positron
pairs in magnetic fields approaching and exceeding 10^{14} G. The formation of
free and bound pairs is addressed, and the importance of positronium
dissociation by thermal X-rays is noted. We calculate the collision cross
section between an X-ray and a gamma ray, and point out a resonance in the
cross section when the gamma ray is close to the threshold for pair conversion.
We also discuss how the pair creation rate in the open-field circuit and the
outer magnetosphere can be strongly enhanced by instabilities near the light
cylinder. When the current has a strong fluctuating component, a cascade
develops. We examine the details of particle heating, and show that a high rate
of pair creation can be sustained close to the star, but only if the spin
period is shorter than several seconds. The dissipation rate in this turbulent
state can easily accommodate the observed radio output of the transient
radio-emitting magnetars, and even their infrared emission. Finally, we outline
how a very high rate of pair creation on the open magnetic field lines can help
to stabilize a static twist in the closed magnetosphere and to regulate the
loss of magnetic helicity by reconnection at the light cylinder.
