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The Mechanical Contractors Association of America (MCAA) held its annual convention March 3-7 at the JW Marriott Desert Ridge in Scottsdale, Ariz. “Imagine” was the convention’s theme and aptly named. Every company, project or quest begins with an imagined vision that develops ultimately into an action plan.
The convention set a record for registered attendees at more than 2,400, putting an exclamation point on the importance the membership gives to being an active participant. It was an unequaled venue for networking opportunities for those in the mechanical contracting industry and those serving the industry.
The Manufacturer/Supplier Council exhibit held March 5 was well-attended by the movers, shakers and decision-makers of the industry. Each visitor to the booth indicated that they believe 2019 will be a solid year for mechanical contractors.
Throughout the convention, the outlook for 2019 was upbeat and very positive for growth. Investment in new projects has increased with new announcements made almost daily.
New housing was the one sector of the market that was of concern with new starts slowing. The Federal Reserve’s posture on increasing interest rates has had a cooling effect on new starts as many are priced out of the market.
The 2020 MCAA annual convention will be held in Wailea, Maui, March 15-19.
Jerry Priest, www.bkthorpe.com, submitted a request to Editor Ruth Mitchell for my comment on fracking production in California and the Dakotas.
California has a lot of fracking activity but only a little oil. The Monterey is a 1,750-sq.-mile formation consisting mainly of underground shale rock in central California.
Original estimates of recoverable oil were pegged at 13.7 billion barrels. However, because the shale deposits are so unevenly layered from many years of high seismic activity, existing technology can only yield an estimated 600 million barrels.
Also, increased regulation and growing local resistance have increased costs and limited, or prevented, access to fracking within the boundaries of their counties and towns.
Fracking in the Dakotas has fallen off due to the complexity of fracking in North Dakota.
The drop in oil prices has been, and continues to be, a contributing factor in the drop in production. This is coupled with the increased pressure to capture gas that is being flared — a byproduct of drilling for oil as North Dakota is an oil-producing state, not natural gas.
The increase in pressure has cooled fracking activity due to the estimated costs of complying with the regulation for capturing the gas (91 percent by 2020).
Takeaway capacity is a bottleneck to the efficient delivery of product to market. Protracted pipeline projects due to the delays caused by Native American tribes, increased costs of nonproductive regulatory action and costly environmental impact requirements also are cooling fracking activities.
Maintenance Projects on the Rise
U.S. maintenance projects are set to top more than $2 billion, led by the power generation industry with nearly half of the total investment value (TIV). Turnarounds at nuclear plants tend to involve the largest investments.
There are three units in the south are set for major maintenance:
Southern Co.’s Unit 2 of the Alvin Vogtle Nuclear Facility in Waynesboro, Ga., a 1,152 (MW) facility;
Duke Energy Corp.’s Unit 1 at the McGuire Nuclear Power Station in Huntersville, N.C., a 1,129 MW facility; and
Energy Corp.’s Unit 1 at the River Bend Nuclear Power Station in Saint Francisville, La., 978 MW facility.
One of the largest projects is iOS BASF SE’s ethylene unit turnaround at its petrochemical plant in Port Arthur, Texas. This unit produces approximately 2.3 billion lb. year-over-year of ethylene. This includes maintenance accompanied by process optimization, upgrades and additions to the control system.
Cenex Harvest States Inc.’s turnaround on the fluid-catalytic cracking (FCCU) and hydrofluoric alkylation units at its refinery in McPherson, Kan., with capacities of 25,000 BBL/d and 6,000 BBL/d.
More than half of the TIV is attributed to maintenance projects in the metals and minerals industry’s steel processing sector. Nucor Corp.’s first of two scheduled shutdowns is at a steel mini-mill in Plymouth, Utah. This facility produces 1.1 million tons per year of hot-rolled carbon steel. The second shutdown is scheduled for September of this year.
With the large share of maintenance projects attributed to the power generation, chemical processing and the oil/gas industries, the Southwest has the largest TIV, equaling more than 25 percent of the national TIV. The Southeast and the Great Lakes regions follow with around $290 million each. The Midwest region is hosting a little more than $220 million.
Good news for Chicago: The Ford Motor Co. is spending $1 billion and adding 500 more jobs at two plants in the Chicago area. It will expand production of the Ford Explorer, the Lincoln Aviator SUVs and the Police Interceptor Utility vehicles. The automaker will add positions at its Chicago area assembly and stamping plants, increasing the number of employees to 5,800.
The Great Lakes Region — which includes Illinois, Indiana, Kentucky, Michigan, Ohio and Wisconsin — is expected to see $7.8 billion in second-quarter starts. Ohio leads the region in terms of TIV with $4.7 billion.
One of the major projects is Apex Power Group’s 1,650 MW combined cycle plant near Byesville, Ohio. The plant is scheduled to be operational in early 2023.
The other major project is a natural-gas-fired plant at Clean Energy Future’s 955 MW plant near Oregon, Ohio. The project has an estimated TIV of $850 million. The project is expected to be operational in early 2021.
Predicated on current market conditions, pricing for carbon steel butt welding fittings and forged steel flanges should remain stable, though the recent startling admission of an “approved” flange-maker not complying with ASTM standards will certainly send shock waves through the industry and end-users and when the full facts are presented, may warrant an industry-wide recall. As always, we suggest you monitor your suppliers regularly in case of an unexpected event.
PVF Roundtable in May
To keep current with developing opportunities, the PVF Roundtable’s networking meetings provide a valuable platform for keeping pace with the dynamics of the PVF industry, the exchange of ideas and information, and the opportunity to expand your contact base. It is the place where industry movers, shakers and decision-makers meet.
The board of directors encourages you to attend the next PVF Roundtable networking meeting scheduled for May 14, 2019, beginning at 4:30 p.m. at Houston’s The Bell Tower on 34th, 713-868-2355.
This meeting will be preceded by the PVF Roundtable Golf Tournament to be held at The Kingwood courses. We expect to use three courses on May 13. We encourage all interested to register early at www.pvf.org.