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With Mike Johnson re-elected as Speaker of the House (with the support of then President-elect Donald J. Trump) on the first ballot, it bodes well for the Trump agenda regarding the energy sector of the economy and the PVF industry.
Oil pricing in early January finds WTI at $74.07/barrel and Brent at $76.59/barrel. U.S. Treasury Secretary Janet Yellen indicated that the United States is looking at further sanctions on “dark fleet” tankers. It has not ruled out sanctions on Chinese banks as it seeks to reduce Russia’s oil revenue and access to foreign supplies to fuel its war in Ukraine.
Yellen stated that America and its allies also could consider lowering their $60/barrel cap, which prohibits Western insurance and maritime services on cargoes exceeding that level.
President Joe Biden’s announcement to ban oil and gas drilling over vast areas of the U.S. Atlantic and Pacific waters was an additional Biden administration policy impacting oil pricing and the energy sector. This was another attempt of his administration’s attempt to derail President Trump’s energy development initiatives.
Biden has banned new offshore oil and gas development across 625 million acres of U.S. coastal territory. The ban rules out the sale of drilling rights in stretches of the Atlantic and Pacific oceans and the eastern Gulf of Mexico.
Before the inauguration, the Biden administration continued exacerbating President-elect Donald Trump’s aggressive reform efforts to energize the country and the economy. Under the Biden name, the administration, in early January, was scheduled to issue new last-minute regulatory measures, in the name of climate change, on the energy sector of the economy to make Trump’s agenda more difficult to initiate.
With that said, President Trump will immediately initiate major reversals of the Biden Executive Orders related to the energy sector. Additional reforms needing congressional approval will be pursued on an aggressive schedule needed to energize the energy sector.
Predicated on an expedited schedule of executive orders and prompt congressional approvals, our industry should see positive results in construction activity in the middle-to-end of the second quarter.
LNG exports, commercial construction
GE Vernova signed 9 gigawatts (GW) of gas turbine reservations for clients that include big tech energy-hungry data center names for their campuses. All the new orders will be built out at the company’s South Carolina factory. GE Vernova expects to see 10 GW of gas turbine orders each year through 2028.
2025 is expected to be another banner year for American LNG (liquified natural gas). Of the 27 million metric tons of new global LNG supply expected in 2025, nearly 90% will come from North America. The United States is the world’s largest exporter of LNG. This has the potential of putting significant pressure on domestic gas supplies.
The global demand for LNG and the additional domestic demand for natural gas due to data center development power resources will bring added demand for new pipeline construction.
ExxonMobil selected the Australia-based Worley to provide engineering, procurement and contraction services for a proposed hydrogen and ammonia plant in Baytown, Texas. The plant will be near ExxonMobil’s Gulf Coast chemical and refining complex. Total investment value (TIV) has not been disclosed; ExxonMobil expects the facility to be the largest in the world.
The final investment decision is expected early this year and still requires regulatory approval to begin operating as soon as 2029.
Magnet projects of $1.5 billion TIV are scheduled for the United States for those employing rare earth elements and those that do not, as well as a plant for recycling.
One of the largest projects is Germany’s VAACUUMSCHMELZE GmbH & Co. (U.S. Vac Magnetics) in Sumter, South Carolina, approximately 100 miles north of Charleston. The company is constructing a grassroots plant to manufacture rare earth magnets for the automobile sector.
Commercial construction (excluding data center, chip manufacturing and healthcare) and new housing will not see a robust recovery in 2025; however, some progress will be made as mortgage rates ease slowly as the year progresses. Overall, the outlook remains somewhat subdued for these sectors of the economy.
In early January, then President-elect Donald Trump announced a $20 billion foreign investment to build new data centers across the United States.
Emirati billionaire Hussain Sajwani, a Trump associate and founder of Damac Properties, is pledging “at least” that amount. “They may go double, or even somewhat more than double, that amount,” Trump said of Sajwani’s company during his press conference at his Mar-a-Logo residence in Florida.
ILA contract, Trump tariffs
The International Longshoremen Association renewed negotiations on Jan. 7 regarding the tentative contract to prevent a work stoppage. Final negotiation to ratify the contract by the Jan. 15 deadline is crucial as failure to reach an agreement will devastate ports ranging from the East Coast to the Gulf Coast.
As of this writing, no final agreement has been reached.
Pricing and the availability of commodity carbon steel butt-welding fittings and forged steel flanges remain stable in early January. President Trump’s proposed sweeping tariffs that include, but are not limited to, China, India, Canada and Mexico will impact the supply chain of offshore finished products, roughs and component parts.
It is, therefore, wise to remain in close contact with your manufacturer/supplier to avoid surprises regarding U.S. Tri-Seal compliance, pricing and the availability of pipe, forged flanges, butt welding fittings, valves and other PVF-related products.
New energy projects and the skilled labor shortage
Implementing the Trump administration policies igniting the demand for new energy infrastructure will also exacerbate the need for skilled workers. The graying of the workforce and the lack of interest of our youth in our industry continue to affect the construction industry’s productivity.
Union, end-users, contractors, mechanical contractors and pipeline operators understand the implications of the skilled labor shortage and have instituted training programs to address the shortage.
The PVF Roundtable recognizes the need is not met even with industry training programs, and passionately promotes the funding of trade schools and education programs designed for the PVF industry.
The PVF Roundtable is actively engaged in supporting trade schools and student recruitment for the industry through the PVF Roundtable Charitable Foundation, with scholarships exceeding the $2 million mark in 2024.
PVF Roundtable news
The PVF Roundtable Golf Tournament and TroutBlast are the major fundraising events for the PVF Roundtable Charitable Foundation scheduled for 2025.
The 2025 PVF Roundtable Golf Tournament is scheduled for May 12, 2025. Please check the website (www.pvf.org) for registration and additional details.
The Weldbend Corp., Ferguson Industrial and MRC Global are key sponsors of these events.
The next networking meeting of the PVF Roundtable is scheduled for May 13, 2025 (post-golf tournament) and will be held at the Bayou City Event Center in Houston, 281-501-6720.
This venue will provide additional space and convenience to exchange information and meet new colleagues — a great opportunity to network with manufacturers, suppliers and end-users.
Networking meetings are now, more than ever, essential for you, your associates and your clients to share information, discuss pertinent issues, meet new contacts, develop new long-lasting friendships and pursue new opportunities in the industry.
As a member of the board of directors, and I speak for all members, we thank you for your participation in these events.