Editor's Log: Energy Sanity

November 2009 Vol. 64 No. 11

As the price of oil and natural gas continues to climb, there will be a corresponding rise in public pressure to address the issue. No doubt it will be extremely difficult to change the world’s appetite for carbon fuels; those efforts will be met with great resistance. The only way toward success is to seek realistic and practical solutions that recognize the short-term need for a healthy domestic energy industry. The only current action by our leaders seems to be centered on reverting back to making energy companies the fall guys for lack of a coherent, sensible direction.

Stimulus, again
After a busy month of traveling and many discussions with cities and contractors from around the country, it appears as if the sewer rehabilitation market is riding out the recession better than most construction-related markets. Though there are certainly parts of the country where rehab work is slim, by-and-large, contractors are reporting slow but steady work. Some even have substantial backlogs.

We’re also, at long last, receiving good news regarding stimulus funds. I’ve run into several cities that have received or should soon receive their funds. Final engineering is wrapping up and projects are being bid. That’s consistent with consensus projections that, at least for sewer/water projects, actual work should kick off late in the fourth quarter and early first quarter of 2010.

The question, for most cities, remains: what happens to their rehab and construction activities after the stimulus packages are gone? Though most agree that the economy is beginning to make a comeback, most likely improvements will come slowly, in bits and pieces, and that 2010, while improving, will still be a slow year. Will municipalities, after two years of recession, be able to generate the revenue they need to transition from a treading water mode to a progressive mode?

On the plus side, I’ve also increasingly been learning of cities finally--and agonizingly--raising their sewer and water rates, some quite aggressively and steadily over a period of several years. While no doubt that is a bitter pill to swallow, it is a necessary tonic if we’re going to even try to maintain these vital systems. It’s also hard to show much sympathy to those city governments who have typically avoided, at peril, raising sewer/water rates when needed and effectively keeping rates artificially depressed, typically for political reasons.