Construction unemployment data from the U.S. Bureau of Labor Statistics indicates that as of the beginning of the fourth quarter, construction unemployment equaled its lowest monthly level reported in over a decade.
Ken Simonson, chief economist of the Associated General Contractors of America, stated, “Contractors foresee plenty of projects to bid on, and nearly three-fourths of the firms expect to add workers during the next 12 months, but most are finding it hard to find qualified workers to hire.”
Anirban Basu, Associated Builders and Contractors’ chief economist, notes the nonresidential sector expansion is a “reflection of a segment that remains flush with work.”
The Northeast and New England Regions (including New York, New Jersey, Pennsylvania, Delaware, Connecticut, Massachusetts, Maine, New Hampshire, Rhode Island and Vermont) have more than $3 billion in planned project starts in the power industry during the fourth quarter.
One of the largest projects planned to start is a natural-gas-fired power plant in Pennsylvania. American Power Ventures (Bernardsville, N.J.) will begin construction on a 1,000 MW combined cycle plant located on a 33-acre site next to the closed Hatfield’s Ferry Power Station. The total investment value (TIV) is estimated at $800 million.
Another project scheduled to kick off in the fourth quarter is America Organic Energy’s “green power” 7.18 MW waste-to-energy plant in Yaphank, N.Y., on Long Island. The facility will include a 75,000-square-foot production building to process 160,000 tons per year of biosolid food waste to generate methane gas to power four GE generators.
West Coast Projects
On the other side of the country, the West Coast Region (which includes California, Oregon, Washington, Alaska and Hawaii) is scheduled to see more the $3 billion in planned starts during the fourth quarter.
Among the most significant projects are two rail projects in Seattle. Sound transit will construct a 7.8-mile extension from SeaTac to Federal Way. This extension will have three stations along the route. In addition, Sound Transit is building an 8.5-mile link with four stations from Northgate to Lynwood Transit Center.
CoreSite Realty Corp. plans to begin construction on a data center in Los Angeles on the site of a former parking lot. The 51,000-square-foot facility will have four stories and 24 MW of power with an estimated TIV of $134 million.
Husky Energy Inc. (Calgary, Alberta, Canada) is continuing to make progress on the $400 million project to rebuild its 45,000 BBL/d Superior Refinery in Wisconsin and return it to production. The project is replacing the facility, which was severely damaged by an explosion at the refinery in 2018.
Construction is scheduled to begin during the fourth quarter, predicated on having the final permits in their possession. The projected start-up date is scheduled for 2021. The Superior facility remains an excellent asset for Husky as it is the first U.S. refinery along the route of the Enbridge Mainline crude oil pipeline. The refinery is ideally positioned to process Canadian crude into high-demand products (i.e., gasoline, diesel and asphalt) for the U.S. Midwest market.
Atlantic Coast Pipeline, Weldbend Lawsuits
The Mid-Atlantic Region may have reason to be optimistic about the construction of Dominion Energy’s Atlantic Coast Pipeline. On Oct. 4, the U.S. Supreme Court agreed to hear Dominion Energy’s and the Trump administration’s appeal of a lower court ruling that halted construction on the $7.5 billion natural gas pipeline, which is intended to run from West Virginia to North Carolina.
At issue is the Forest Service’s decision to allow the pipeline to cross underneath the 2,200-mile Appalachian Trail. Following a lengthy application process with the involved multiple federal agencies, the Forest Service granted the consortium a right-of-way under the trail in January 2018. This action prompted environmental groups to file a lawsuit.
Another major development affecting the PVF industry is the verdict in the false advertising and unfair competition lawsuit against Ulma, Forja S. Coop and Ulma Piping USA Corp. On Sept. 27, after a nine-day trial in the U.S. District Court in Houston, the jury handed a $31 million win to Weldbend Corp. and Boltex Mfg. Co.
The dispute began in May 2017 when plaintiffs Weldbend and Boltex alleged that Ulma falsely advertised its carbon steel flanges as heat-treated (normalized) in accordance with ASTM A105N specifications when they were not.
These parts are used in the construction of oil and gas pipelines, refineries and other essential applications.
Ulma marked its flanges as A105N and described them on certified material test reports as complying with the heat-treating procedures specified in ASTM standards when they were not. This practice went back at least to May 2013 and, according to Ulma’s CFO, perhaps decades.
Ulma’s conduct may have exposed U.S pipeline operators and the American public to an increased risk of flange failures together with the costs and harms associated with such failures.
Also, Ulma falsely advertised its flanges and engaged in unfair competition. The jury further found that the harm to Boltex and Weldbend resulted from malice or fraud.
Saul Perloff, a partner at Norton Rose Fulbright of San Antonio, was quoted as saying he thinks the jury cared about the fact that initially, Ulma denied the allegations and “promised to prove us wrong.” Then, 22 months later, the company admitted to some customers it hadn’t heat-treated its flanges.
“Even when they made that admission, they didn’t own it,” he says. “They didn’t apologize for it. They didn’t really acknowledge they had done something wrong.”
PVF Roundtable News
The Oct. 15 networking and dinner meeting of the PVF Roundtable was held at the Houston Marriott Westchase Hotel with guest speaker Terry Bradshaw. More than 600 attendees were at the networking session and 550 registered for the sit-down dinner.
A very enthusiastic audience received Terry Bradshaw, a four-time Super Bowl champion with the Pittsburg Steelers, Fox sports broadcaster, movie and TV star. His presentation was both entertaining and humorous, as well as insightful regarding the importance of personal development in achieving success.
Several individuals commented that the networking session at this event was extremely productive regarding the exchange of information, renewing old relationships and developing new contacts. Several of the first-time attendees commented they were impressed by the size of the turnout and the number of decision-makers across the PVF spectrum that attended.
The next meeting of the PVF Roundtable is scheduled for Dec. 10 and will be held at The Bell Tower on 34th in Houston. This is the second Christmas event and networking meeting, which will begin at 4:15 in the afternoon and end at 7 in the evening. Please bring a toy as this is a Toys-For-Tots event. Last year’s inaugural event was extremely well-attended.
All the members of the PVF Roundtable board of directors urge you and your associates to attend the networking meetings as this is where the movers and decision-makers from all sectors of the PVF industry meet to network and exchange information and ideas.