Editor's Log: Running, Stumbling To Progress

By Robert Carpenter, Editor | June 2012, Vol. 67 No. 6

The economic wave in the form of shale energy has this country suddenly awash in cheap natural gas and our production of oil reinvigorated to levels not seen in decades. Companies like Valero, the largest independent refiner in the U.S., are cancelling their imported oil contracts and switching over to good ’ole American crude, once some pipeline infrastructure work was completed. Most of the shale production fields are located in remote or challenging terrain, requiring that new gathering and transmission pipelines be constructed. Directional drilling (see our annual HDD update on the 18th) is playing a key role in this market along with track trenchers, excavators, dozers, pipe layers and much more.

Then there is telecom. The lines defining traditional cable companies with telephone companies have virtually all but disappeared. These companies are racing to be information, entertainment and digital business providers. To do that, at long last we’re connecting the dots of users that were bypassed during the rush to build fiber backbone in the late 90s. Work was good before the recession but when the much ballyhooed stimulus billions started hitting the market 18 months ago (after two abortive attempts), an already solid market exploded in several parts of the country. Now, the stimulus funds have about run out, but the market seems on steady enough ground to continue at strong pace. All this continues to bode well for manufacturers of HDD and other types of underground equipment.

Of course, the largest piece of the infrastructure pipe remains sewer and water – public entities. The good news is that funding is not really an obstacle anymore. There are opportunities through a mix of public and private entities to obtain loans. The bad news is that the operative word is “loan,” not “grant.” Cities may be able to get the money, but they don’t have the cash flow yet to pay it back.

Cities now have a better grasp of their funding situation. No longer is their local tax revenue in free fall – rather, it is more of a constant. Municipalities are more comfortable budgeting and spending, albeit at a lower level than three or four years ago.

For now, cities are concentrating on isolated rehabilitation projects rather than larger programs. That has kept many rehab contractors active at a time when their new construction brethren are suffering.