January 2017 Vol. 72 No. 1
Editor's Log
New Year, New Hope For Underground Infrastructure
By Robert Carpenter, Editor-in-Chief
Despite assurances for several years now by the President that our country’s economy was in great shape, I never bought into that. There always seemed to be a dark cloud following our markets.
The November presidential election proved that many people of the United States didn’t buy into the “all is well” party line either. The Republican presidential nomination process was a vicious cycle of infighting. But eventually, an upstart, billionaire businessman Donald Trump would earn not only his party’s nomination, but pull the political shocker of the century with a victory over the presumptive winner Hillary Clinton.
For some time now, the economy has been mired in uncertainty. We had a president who unilaterally expanded his powers by direct interference via presidential edicts. Most realists believed Hillary Clinton represented a continuation of President Obama’s policies and political direction.
Even when we supposedly turned the corner, organizations were very cautious about opening up budgets, always nervous about mixed economic reports. Waves of new regulations and unprecedented executive edicts seemed to constantly serve as inhibitors for true market growth, both for cities and private utilities.
Granted, some underground markets have done well. Oil and gas were on fire for a few years before the bust in late 2014; telecom has been performing at consistently high levels; the electric grid work has been steady. But when one looks at the reasons for the strength of those market elements, it is obvious they have succeeded despite the Obama administration, not because of it.
It was never a secret that past President Obama firmly backed the environmental extremist position that anything related to petrochemicals was inherently evil. His overall anti-business attitude thwarted much of the business climate in America. Now, of course, that dynamic has changed – unexpectedly and radically.
The energy industry, including pipelines, has been under siege for some time. Environmentalists seeking to block future pipeline construction (without pipelines, oil and gas stays in the ground, or so the theory goes), are furiously regrouping, trying to figure a new course as they can be virtually assured that pipeline construction will accelerate.
Trump has already said he is in favor of approving the Keystone XL pipeline and will most likely instruct the Army Corps of Engineers to issue necessary permits for the Dakota Access Pipeline, which has already withstood court challenges. Obviously, it’s a scary new world for anti-carbon environmental factions, as they no longer can count on the President supporting their every move, including intervention with a lawful process.
The sewer and water markets retreated in 2016 – as much as 15-19 percent by some estimates. However, the election did get infrastructure investment into the public eye. Both candidates floated substantial infrastructure investment concepts, but by far the greatest commitment came from Trump. Post-election, the Speaker of the House Paul Ryan says the House is on board with a $1 trillion investment into infrastructure through both public monies and public/private partnerships. Ryan wants to leverage private monies as much as possible to increase the direct yield for infrastructure and avoid inevitable “pork” handouts that tend to be attached to any large-scale spending bills.
Trump and the Republican Congress are also talking major tax cuts to stimulate investment. However, while we’re on a “business approach” path, I would suggest adding a 3 cent per bottle of water tax to further supplement underground sewer and water infrastructure. Today’s crazed public is convinced that bottled water is infinitely healthier than tap water (of course, a reality check proves this is simply a bizarre urban myth).
But if people want to believe that, then we can assume they would support ensuring the overall health of America and won’t mind subsidizing a fund to improve sewer and water systems. This tax would only work if the funds were strictly earmarked for underground infrastructure, so that they couldn’t be hijacked to support million-dollar studies of sand worms or some other type of outrageous waste of money. When Coca Cola and Pepsi balk – as they have huge interests in the bottled water market – simply mention “Flint” and I’ll bet objections fade quickly. Of course, the Flint, MI, situation was an exception; but facts rarely deter public opinion.
As a country, we have a rare opportunity now to change course. For the underground infrastructure markets, that dark cloud that has covered our industry for so long suddenly seems to be parting, allowing a little sunlight to filter through. We’re all anxious for some serious economic sunshine. It remains to be seen if this is possible, but we can hope.
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