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While the outcome of the Senate races in Georgia had yet to be determined when this column was written, the Electoral College met and declared Joe Biden as president-elect.
Many energy stakeholders fear a Biden presidency; I believe they are wrong. With the likely odds of a Republican Senate and the backing of the U.S. Supreme Court, President Biden can do little to disrupt current policy.
There are still massive amounts of money to be made in the energy sector.
In my opinion, there is going to be little transformation in the energy landscape. Biden needs to be measured in his approach, taking care not to upset energy-dependent states heading into the very significant 2022 midterm elections — hence his “come together” rhetoric.
At least for now and the foreseeable future, the death of fossil fuels has been greatly exaggerated.
The run-off for the two Georgia senate seats was scheduled for Jan. 5. Odds are that the Democrats will not win both seats and gain control of the legislature.
If the Democrats succeed and take both seats, the vice president would be the tie-breaking vote on all votes cast down party lines, thus leaving the potential for Democrats having significant control. Without that, it will still be difficult to pass any major changes to climate energy laws, particularly some senate votes.
Congress controls the nation’s wallet and the conservative-leaning U.S. Supreme Court is there to thwart the president on any legal oversteps.
Therefore, the approach of President Biden is likely to be measured steps and incremental change.
1Q 2021 CapEx Projects
HollyFrontier Corp. is defying other energy companies’ pandemic measures with plans to approximately double its capital expenditures in 2021. This includes roughly $500 million to $530 million in its renewable business.
HollyFrontier will spend between $1.05 billion and $1.15 billion on capital energy projects. The company is looking for a robust post-pandemic recovery for U.S. gasoline demand.
One of HollyFrontier’s most ambitious projects is the multiphase addition of a renewable diesel unit at its Navajo Refinery in Artesian, N.M. This addition will convert pretreated soybean oil, vegetable oil and tallow into renewable hydrogenated diesel fuel.
Among the related projects set to start up in the first quarter of 2021 are:
A renewable diesel hydrotreating unit at $280 million;
A renewable diesel pretreatment unit at $200 million;
An addition of six storage tanks at $45 million; and
An addition of a loading/unloading rail car rack at $20 million.
Regarding fossil fuels, HollyFrontier is building a $90 million crude oil pump station in Cushing, Okla., to support a 160,000 BBL/d pipeline from the Plains All American Pipeline’s oil hub in Cushing to Holly Frontier’s refinery in Tulsa, Okla. Construction is expected to run through the summer of 2021.
Natural Gas Maintenance Projects
U.S. natural gas plants are gearing up for more than 150 maintenance projects during 2021’s first quarter. Annual electricity generation from natural gas-fired power plants has increased by double-digit percentages between 2015 and 2019, with 35 gigawatts of gas-fired generation entering service across the country. Each unit requires regular maintenance for long-term functionality.
The Tennessee Valley Authority and Southern Co. lead all other operators with four projects each. In Mississippi, the TVA is preparing for maintenance programs on natural gas-fired, combined-cycle (NGCC) units 1 through 3 at the Magnolia Energy Project in Ashland, generating approximately 1,004 megawatts; NGCC units 1 through 3 at the Southaven Generating Station in Southaven; and the 734 MW NGCC power plant in Ackerman.
Southern Co. is planning a maintenance project at unit 1 at the E.B. Harris Station in Autaugaville, Ala. It also is preparing for maintenance on the simple-cycle units 2 and 3 at the Cleveland County Station in Kings Mountain, N.C.; units 3 and 4 at the Dahlberg Power Station in Nicholson, Ga.; and the 172 MW unit 2 at the Oleander Merchant Peaking Power Plant in Cocoa, Fla.
The U.S. Northeast and New England are experiencing a power industry boom with more than $5.4 billion in first-quarter startups.
One of the largest projects is a natural gas-fired plant in Lakeville, Conn., just east of Hartford. The Killingly Energy Center will generate 600 MW of electricity.
1Q Industrial Manufacturing Projects
In the Great Lakes Region (Illinois, Indiana, Kentucky, Michigan, Ohio and Wisconsin), there is approximately $2.5 billion in industrial manufacturing projects slated to start up in the first quarter of 2021.
The automotive sector leads the region with more than $1 billion in projects. Other sectors include data centers and distribution facilities. Michigan, Illinois, Indiana and Kentucky are seeing the greater share of construction startups.
Texas is slated to see approximately $3 billion in industrial manufacturing startup projects in the first quarter.
Data centers are increasing in prominence in the United States, and Texas is home to several large data center construction starts. Among the largest is Apple Inc.’s planned grassroots data center in Austin. A 244,000-square-foot building will be built on a 133-acre tract, equipped with supporting equipment and systems.
Texas also is home to cutting-edge technology. In New Braunfels, Continental AG plans to begin construction on a radar sensor manufacturing plant. The 215,000-square-foot facility will allow the production of equipment to aid in advanced driver assistance programs. Atlanta’s East West Mfg. Enterprises is building a grassroots printed circuit board manufacturing plant on Austin’s northern outskirts.
In Fort Worth, Linear Labs Inc. is beginning a renovation project for an electric motor manufacturing plant with a total investment value of $214 million. A 500,000-square-foot facility formerly used for aircraft maintenance will be fitted with production and supporting equipment to provide manufacturing and development research capability for advanced electric motors.
This is just an overview of the opportunities that exist as the first quarter of 2021 begins.
PVF Roundtable News
The PVF Roundtable’s “Stock The Pantry” charitable initiative in lieu of the annual Christmas party (canceled due to restrictions regarding the spread of COVID-19) was a resounding success.
As a member of the PVF Roundtable’s board of directors, and I speak here for all our members, we thank all the contributors and our key sponsors — Weldbend, Elite Supply, Wolsely Industrial Group and MRC — for their generous support.
The first networking meeting of the PVF Roundtable is tentatively scheduled for Feb. 9, 2021. Due to the restrictions on assembly generated by the COVID-19 pandemic, we suggest you refer to the PVF Roundtable website (www.pvf.org) for any announcements regarding the specific date or possible cancellation.