Surviving An Exceptional Funding Drought

By Robert Carpenter, Editor | February 2012, Vol. 67 No. 2

Despite recession and a funding crisis, the EPA has ramped up its enforcement procedures the past three years, forcing local governments to agree to official Consent Decrees. In many cases, those agreements are reached without the city having access to funding sources to deal with the necessary spending to achieve compliance.

Potable water across the world is rapidly becoming more valuable than oil. It is a precious commodity, even in the U.S. Many local governments have already been faced with finding new sources of water for their current needs. Lack of water access severely inhibits economic growth and development. Many of the additional water sources come at an increased cost. Several states have already instituted phased-in mandates to switch from well water (overuse is causing subsidence issues) to more costly surface water. The intricate web of water agencies across states is creating an entirely new level of politics.

Other market outlooks
The telecom industry will find out later in 2012 what life is like without stimulus as those projects begin to wrap up by mid-year. The thinking is that the economy will have recovered enough to keep the industry at least moderately healthy. That was the case before the oft-delayed stimulus dollars hit and the market is hoping the public’s appetite for telecom technology has not abated.

Alternative energy, primarily wind power and geothermal, could also develop into strong markets for underground utility contractors. But both of those fields are not yet self-sustaining, requiring tax breaks and subsidies for growth. It remains to be seen if substantial subsidies can be obtained in this year of continued budget cutting.

Life without Keystone XL
At press time, we just heard that President Obama was officially going to kill the Keystone XL Pipeline project. What a disaster for the American economy, yet a calculated political risk for Obama. He’s wagering that appeasing his “hope and change” supporters and the environmental lobby will reinvigorate those groups and brings them solidly back into the fold of his reelection campaign. But rest assured, the Keystone XL debate will rage on for months and is not dead yet.