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We are now midway through the second quarter of 2021 and the current administration continues to maintain a negative approach to the energy sector of our economy. The American Petroleum Institute (API) issued a mixed review on the Biden administration’s infrastructure plan.
“We support the administration’s goal of modernizing the nation’s infrastructure, including roads, bridges, rail and ports,” notes Frank Macchiarola, API’s senior vice president of policy, economics and regulatory affairs, in a RigZone.com article (https://bit.ly/3mFrBXc). “We also welcome the administration’s efforts to address climate change by incentivizing innovation for hydrogen and carbon capture, utilization and storage as part of this infrastructure package.”
However, he adds the proposal “misses an opportunity to take an across-the-board approach to address all our infrastructure needs.” This would include modern oil and gas pipelines.
“Targeting specific industries with new taxes would only undermine the nation’s recovery and jeopardize good-paying jobs, including union jobs,” Macchiarola says. “It is important to note that our industry receives no special tax treatment. We will continue to advocate for a tax code that supports a level playing field for all economic sectors, along with policies that sustain and grow the billions of dollars in government revenue we help generate.”
Ed Longanecker, president of the Texas Independent Producers & Royalty Owners Association, notes in a statement: “Pipelines are the most reliable and efficient means to transport the oil and gas that powers families across America. Placing a high tax burden on the oil and gas industry, including pipelines, hinders Texas producers’ ability to deliver the energy the country needs.”
A fact sheet published on the White House website outlines the plan, which includes a corporate tax rate increase to 28 percent and a move to ”eliminate tax preferences for fossil fuels.”
The Biden administration’s energy sector job-killing rampage continues after he canceled the sale of 80 million acres of Gulf of Mexico oil leases scheduled in New Orleans. “It will kill our state; it will kill workers,” says Mike Moncla, interim president of the Louisiana Oil and Gas Association (LOGA). “It will kill jobs, and it would be a terrible thing.”
According to Moncla and LOGA, nearly 250,000 Louisiana residents work in the oil and gas industry; 98,000 have offshore jobs. Then there are the ancillary jobs (the grocers, barbers, auto dealers, doctors, pharmacies, real estate, etc.) that are dependent on these mainstream industry jobs.
Sen. Joe Manchin of West Virginia, who heads the U.S. Senate Energy Committee and Natural Resources, urged President Joseph Biden to reverse his opposition to the Keystone XL pipeline. The senator says the project provides union jobs and is safer than transporting the oil via trucks or rail.
Texas Attorney General Ken Paxton and Montana Attorney General Austin Knudsen filed a complaint in Texas federal district court, stating that the Biden administration does not possess the unilateral authority to change energy policy that the U.S. Congress has set.
The suit has been joined by attorneys general from Alabama, Arizona, Arkansas, Georgia, Kansas, Indiana, Kentucky, Louisiana, Mississippi, Missouri, Nebraska, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Utah, West Virginia and Wyoming.
The White House has not responded to requests for comments as of this writing.
Industrial Manufacturing Sector Sees 2Q Increase
The U.S. refining sector is projected to see an increase of approximately 29 percent in planned maintenance turnaround activity during the second half of 2021 compared to the same period last year.
Holy Frontier will see the bulk of the activity as three of its refineries will undergo major turnarounds, reports Industrial Info Resources. Marathon Petroleum Corp. also will see significant maintenance activity for the remainder of 2021.
The Northeast/New England Regions (Delaware, New Jersey, New York, Pennsylvania, Connecticut, Massachusetts, Maine, New Hampshire, Rhode Island and Vermont) are set to see $2.5 billion in second-quarter industrial manufacturing project starts. These include activity in multiple sectors, including data centers, automotive and port projects.
The U.S. Southwest Region (Arkansas, Louisiana, Oklahoma and Texas) is expected to see more than $2.6 billion in industrial manufacturing project starts during the second quarter. Planned starts cover several sectors, including data centers, port projects and distribution warehousing. The data center sector leads with a total investment value (TIV) of more than $1.7 billion in planned startups.
The U.S. Rocky Mountain Region (Arizona, Colorado, Idaho, Montana, Nevada, Utah and Wyoming) is preparing for more than $13 billion in industrial manufacturing project starts during the second quarter. These projects include many sectors, including semiconductors, data centers, distribution and warehousing centers, and utility plants.
The largest project in TIV is the Taiwan Semiconductor Mfg. Co.’s planned semiconductor chip manufacturing plant in Phoenix. The project consists of the construction of a multibuilding manufacturing facility totaling 3.8 million square feet.
U.S. alternative fuel producers are preparing for industry-wide growth as demand is increasing. Approximately 16 percent of new U.S. vehicle sales are forecasted to be alternative fuel vehicles by 2030; substances including methanol are being adopted for marine fuels.
Braven Environmental is preparing to begin construction on a $31.7 million renewable diesel plant in Cumberland, Va. The facility will use pyrolysis technology versus incineration to convert plastic waste products into renewable diesel with significantly fewer emissions.
Biomass producer Enviva is making progress on its plant in Epes, Ala. ($175 million TIV), designed to produce 700,000 metric tons of pellets per year with potential growth to 1.5 million tons per year.
Supply Chain Delays Continue
An Associated General Contractors of America survey of 1,489 contractor members shows that chaotic supply chains and worker shortages continue to plague contractors. More than half (52 percent) of those surveyed say they experienced construction delays due to a shortage of material, equipment or parts.
A majority of respondents state that they experienced dramatic price increases in more than one material category, and 71 percent said they are experiencing delays or disruptions due to material shortages.
The increases in the cost of containers, limited container availability, increases shipping costs, increases in inland transportation costs, and delays at ports-of-entry are contributing factors for delays and rising costs.
The PVF sector is experiencing the same pressures on material availability and pricing. Increased delays in deliveries, multiple price increase across the PVF spectrum of products — including steel coils, welded pipe, valves, commodity fittings, flanges and related products — are impacting the timeline for completion and costs of major PVF construction projects.
With delays and rising costs of offshore PVF products, including carbon-steel butt-welding fittings and forged-steel flanges, it makes sense to focus on more reliable and higher quality domestic sources.
Prices for carbon-steel domestic flanges, billets along with seamless pipe continue to rise. Close contact with your manufacturers and suppliers is strongly suggested regarding both price and the availability of product. This is particularly recommended for domestic carbon-steel butt-welding fittings and forged-steel flanges to not get caught off guard in these uncertain times.
PVF Roundtable News
The PVF Roundtable 2021 Don Caffe Memorial Golf Tournament will be held June 7 at the Clubs of Kingwood Golf Course, 1700 Lake Kingwood Trail, Kingwood, Texas. Please register at www.pvf.org
The second-quarter 2021 networking meeting of the PVF Roundtable is scheduled for June 8 at 4:30 p.m. (following the Monday golf tournament) at Houston’s The Bell Tower on 34th.
This is a unique venue for you, and your associates, to network with those in the PVF industry. This event is the platform to share information, discuss issues affecting the industry, meet new contacts, pursue new opportunities and develop new and lasting friendships.