May 2020 Vol. 75 No. 5

Editor's Log

Chaos and Opportunities

Editor's Log

By Robert Carpenter, Editor-in-Chief

As citizens of our states and cities are slowly unlocking and opening their business doors (albeit with a face mask and gloves), we are experiencing a new beginning for underground infrastructure industries, a rebirth if you will. Hope abounds for the economic health of the underground markets; but all the while questions arise, concerns linger. When do we return to the prosperity of yesterday?

Economic jumpstart plans and spending, almost incomprehensible in scope, continue to be pumped into the economy to keep small and large business alive until prosperity returns. Will it be enough to bridge the massive chasms created from the world-wide economic collapse? To a significant degree, I suppose that depends upon your perspectives. I see opportunities, some slow, some fast.

Pipeline work will ultimately follow the path of the overall energy industry and for right now, that means a strong slowdown in projects. Factories that slowed or shut down are just now beginning to cautiously reopen. But combined with an overall drop in energy consumption of 35 percent during the height of the virus attack, it is going to be a long rebound for energy companies (though I think perhaps a quicker turnaround than most expect).

Large horizontal directional drilling has been slowing for some time as pipeline projects are shelved and that trend is unfortunately accelerating. The good news for larger HDD is that the market is not solely dependent upon oil and gas pipelines for their livelihood anymore so there is still work for many contractors. The bad news is when half of your market dries up overnight, it is a major hit to
the bottom line.

There is ample reason for hope as our economy begins the trek back to active and healthy levels. At some point in the next six months to a year, the world’s energy appetite will start catching up with lower production and markets will regain balance. While right now oil and gas are so plentiful that storage of unused supply is almost impossible to find, the positive counter to that situation is that shale wells are shutting down – fast. When supply drops below demand – which likely will happen sooner than many thing – energy will begin its journey back to real world pricing and activity and that means pipeline projects will once again become economically viable and necessary.

The electric and gas distribution markets have been a mixed bag of economic news and consumption patterns. Massive numbers of office buildings fell empty as employees fled to home offices; many factories slowed or shut down completely; schools and universities were closed; and strip mall business were shuttered. There was a dearth of commercial consumption with fewer business to draw electricity.
On the other hand, home offices became the new normal. Heating and air conditioning, lights, cooking, appliance usage all skyrocketed. Homes have been positively aglow with electricity and gas consumption.

For telecommunication markets, the construction of new systems and the consumption of those services has never been higher. The coronavirus pandemic has clearly illustrated the importance of a strong telecom network headlined by fiber and 5G services. Cell phones, email and the internet became our lifeline to the world. Can you imagine what we would have done without these vital services? As the country developed new tactics and embraced technology for education and essential work-from-home programs, telecommunications were our savior. Strained and overworked certainly, but all things considered, modern telecom technology saved much of our economy and education.

These facts have reinvigorated our drive for rural broadband and to connect the entire country with fiber to the home. The good news is that the next stimulus that is being draw up now may very well include rural broadband provisions.

Sewer and water systems saw a huge decrease in consumption with all the shutdowns. The decline in sales tax dollars is going to hit municipalities hard. If the stimulus money truly arrives, relief may lift those markets quickly.

But the next stimulus will also probably include a heavy concentration on infrastructure – a proven path to important and desperately needed work that provides immediate employment and opportunities for millions in the job hunt. The underground infrastructure industry was desperate for labor before the coronavirus hit; it will now provide work force opportunities for those seeking solid jobs and perhaps even new, reliable careers.

How fast our country will recover is anybody’s guess. But I’m confident our infrastructure markets will start out of the recovery gate at a fast walk and accelerate to a full sprint as America reclaims its future and enjoys the prosperity of tomorrow. •

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