January 2022 Vol. 77 No. 1
Editor's Log
Editor's Log: Hope and Concerns
By Robert Carpenter, Editor-in-Chief
As we enter a new year, it brings a mixed bag of hope and concerns for the underground infrastructure markets.
This issue of Underground Construction includes two excellent analyses by experts Daniel Shumate of FMI and Michael Render of RVA.
Much of the hope is due to a brighter picture for utility markets. It is generated by enhanced market conditions and drivers, combined with, in many cases, a significant influx of Federal dollars to further stimulate much-needed economic investment in our nation’s infrastructure.
The water, sewer, fiber and electric markets will experience high levels of investment – all desperately needed to elevate many of our decrepit systems and underserved populations.
Concerns come from a variety of factors that began festering in 2020 and exploded into major growth inhibitors in 2021. Primarily, those include workforce shortages which, though already a significant problem, became acute in 2021; supply chain interruptions and shortages; and now a fragile and ill-managed economic recovery has created explosive inflation.
We’re entering our third year of the Covid-19 pandemic. In late 2021, it again raised its ugly head via the Omicron variant. However, the knee-jerk reactions that were experienced with the Delta variant last summer have seemed meek in contrast this time around. That’s probably because the Omicron variant mutated to be contagious – very contagious – but in doing so, surrendered its strength to attack the human body. Serious cases are few and in fact, the majority of people infected are asymptomatic or experience only mild cold symptoms.
Certainly, there is still danger, but early reports are very encouraging that Omicron is the last gasp of a virus running out of steam. How fast we are able to restore work balances, along with a renewed and effective distribution network, will dictate just how good a year 2022 will be. Right now, however, the consensus expectations are that we’ve turned the corner.
Energy hypocrisy
Unfortunately for the oil and gas pipeline markets, the news heading into 2022 remains unclear and still in a state of flux.
Environmental pressures and attacks on any pipeline project continue. Liberal (progressive) politicians demand nothing less than a complete gutting of the energy industry as it stands today. President Biden was elected largely with their support and now has to balance extremist demands with economic realities. It isn’t working.
Most energy companies and utilities are already actively researching and developing alternatives to oil consumables with pledges and plans to reduce carbon output by massive amounts in the near future. But that’s not good enough for most extremist progressives, who believe the petrochemical industry is evil and must be shut down.
The perceived best way to do that is a three-pronged approach: severely limit drilling (President Biden has started blocking drilling on Federal lands, both onshore and offshore), eliminate new pipeline construction with lawsuits and well-publicized protests at every step of the approval process, and forge attacks on operating pipeline systems with legal and government challenges. By stacking the EPA, FERC and every other federal agency against pipelines and keeping up the nonsense in courts, pipeline companies know they have a challenging 2022 ahead.
Of course, this strategy, combined with other economic conditions, have led to predictably soaring prices. The political position of President Biden and the progressives is simply do whatever it takes to kill energy markets immediately, no matter the economic costs, and damn the science and benefits of natural gas as a bridge fuel.
Not surprisingly, the consequences of such a radical agenda amassed quickly. Plummeting public support and high prices at the pump led President Biden to counter with a mass release of oil reserves. He tried to push other countries into the same action but was greeted with only mild support. That release was enough to provide worldwide relief for about a day. All in all, it was an impotent and futile gesture.
Biden then tried to bully OPEC+ into amping up oil production. It’s apparently okay for more oil to be produced and consumed around the world, as long as the U.S. proudly leads the planet in blocked oil and gas production and consumption domestically. I guess there is some unexplained bubble over the U.S. that makes our air cleaner even if more carbon is released in other parts of the world – just as long as we stop the evil oil and gas companies domestically. OPEC wasn’t buying it and elected to stay its planned course.
Next, President Biden resurrected the tired old tactic of crying about how the big, bad energy companies are profiteering off the American Public’s pain. It’s no wonder President Biden has lost the support of the country and even his own party. Too many political payoffs have cost him an effective presidency and left the energy industry with an uncertain future, even while it’s actively working on alternatives and eventual transition to other fuel sources.
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