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Long-Term Short-Term Economics

  September/October / Vol 8 Issue 6

Long-Term Short-Term Economics
By: Ray Keller, National Sales Manager, Pipeline Division, BEG Group, LLC

 

As a freshman at Lycoming College in 1970, one of my very first classes was Economics 101. At that point in time I really had no clue as to what economics was. My best guess was that was something akin to the Home Economics course my mother made me take in high school. A class mostly filled with girls who were interested in sewing, preparing meals, and the like. Boy did I have a rude awakening when our professor, Dr. Robert Rabold, stood up and stated as his first sentence to the class, “We will only study short-term economics in this class because in the long-term, you’re dead. ” I learned two things immediately. First there were two types of economic studies, long-term and short-term, and secondly, like it or not, we were all, at some point in life, going to die.

So, let’s apply some short-term economics to our discussions about the energy industry as a whole and how it impacts our lives every day. If you took a 36″ yardstick as being the time line in which the earth has existed and looked at all the 1/64th” hash marks as some period of Earth’s history, man would show up somewhere on the very last 1/64″ hash mark. Makes you feel small doesn’t it? But it really gives you an ideological sense of what short-term economics is all about. Man cannot live without energy, food and water, and, in others’ opinions, laptops, cars, and pool boys. In short-term economic theory, we will need ALL types of energy available to us as a human race. There is no one energy source that will supply all of man kinds needs forever. Wood, coal, oil, gas, wind, water, nuclear, and electric all will play a role. I’m willing to bet that there are even energy sources yet to be developed in the future we can’t imagine today. I think it’s about time we all stopped fighting with each other over which energy source is best and which ones should be ostracized. Economics will play a major role, if not the dominating role, in which sources of energy come to the forefront and at what periods in time. We here in the United States are fortunate enough to have access to all the sources and should put our collective efforts together and come up with an energy policy we all can live with. Just my opinion.

The 2018 construction season has been an upbeat season to say the least. In the coming year, oil production in the Permian Basin will come to the forefront, while natural gas production, and pipeline construction will continue to be strong in the northeast. Natural gas exports into Mexico will continue to grow after the commissioning of several key pipelines in Mexico. Those exports exceeded 5 Bcf/d for the first time in July of this year. The following is a peek at what the 2019 pipeline construction season is shaping up to be. Please be advised that at this point in time, two major projects already underway have been stalled due to permitting issues of various types. They are Mountain Valley Pipeline and Atlantic Coast Pipeline. These projects will begin/resume some limited construction in the 3rd. & 4th. quarters, but a majority of it will take place in 2019. In some respects, this is not a bad thing considering the lack of available labor and equipment within the industry as a whole. Quite a different point of view if you are on the financial side of this process.

Anticipated Major 2019 Northeast Pipeline Construction Projects
EASTERN SHORE NATURAL GAS
5.1 MILES 10″
1.6 MILES 10″
All projects Sussex County , DE 2019
TBD
5.0 MILES 10″

NATIONAL FUEL GAS
14.2 MILES 12″
McKean County PA 3rd. QTR 2018

OTIS EASTERN SERVICE
4.50 MILES 12″
Beaver County PA 2019 TBD

96.0 MILES 24″
Sergent Twp. PA/Elma, NY 2019 TBD

WASHINGTON GAS LIGHT
15.8 MILES 24″
Prince George County 3rd. OTR 2018

INFRASOURCE ENERGY TRANSFER
28,3 MILES 12″
Erie County PA/Ashtabula, OH 2019 TBD

LIBERTY UTILITIES
27 MILES 16″
Manchester, NH 2019 TBD

EQT
5.0 MILES 12″
Harrison County WV 2019 TBD

21 MILES 20″
Waynesburg, PA 2019 TBD

47 MILES 30″
Waynesburg, PA 2019 TBD

MARK WEST ENERGY
41 MILES 20″
Bridgeville, PA 2019 TBD

TRANS CANADA
13.5 MILES 12″
Mineral County WV/Alleghany Cty. MD 2019 TBD

MOUNTAINEER GAS
29 MILES 12″
Jefferson County WV 2019 TBD

SHELL P/L *
93 MILES 12″
Cadiz. OH/Monaca, PA
Houston PA/Monaca PA 2019 TBD
*This is in addition to Falcon PL already on the books

COLUMBIA GAS
64 MILES 36″
Vinton/Burlington, OH 2019 TBD

DUKE ENERGY
12 MILES 30″
Hamilton Cty OH  2019 TBD

MOUNTAIN VALLEY P/L
72 MILES 24″
VA/NC 2019 TBD

In January of 2018, the PLCA began reassessing its drug and alcohol testing standards to further comply with DOT standards for workers on the pipeline. This will now include opioids, THC, and several other drugs and substances that may influence a worker’s ability to perform his/her job competently and safely. They may include fit for duty testing. These new standards will be in place for the 2019 construction season not only for pipeline work but any worker who falls under the DOT footprint. Safety and environmental concerns are now the number one focus of the Department of Energy for new construction in the pipeline arena. I will focus on these new regulations and testing procedures in the next article.

 

Ray Keller

 

 

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