In the middle of 2024’s first quarter, the Biden administration targeted Texas in retaliation to Gov. Greg Abbott’s stand on the border crises by asserting world environmental concerns. The administration announced that it is delaying consideration of new natural gas export terminals in the United States, even as gas exports to Europe have soared since Russia invaded Ukraine.

Industry groups and Republicans condemned the pause as a “win for Russia.” At the same time, the environmentalists cheered it as a way to address climate change and counter the approval of the ConocoPhillips huge Willow oil project in Alaska.

The pause will not immediately affect U.S. gas exports to Europe or Asia, per Energy Secretary Jennifer Granholm. Seven liquid natural gas (LNG) terminals are currently operating in the United States, mostly in Texas and Louisiana, and five more are expected to go online in the next few years.

This action would not affect those projects; however, it could delay a dozen or more LNG projects pending or in various stages of planning. This includes the Calcasieu Pass 2 project (CP2) along Louisiana’s Gulf Coast. CP2 would be the largest export terminal in the United States.

As of this writing, there has been no indication as to how long this pause will remain in effect.

According to the Texas Oil & Gas Association’s 2023 survey, the oil and gas industry employed approximately 500,000 people, having a tremendous economic impact on the state.

The sector with the most employees was support activities for oil and gas operations with more than 100,000 workers, followed by gasoline stations with convenience stores at more than 80,000 workers and crude petroleum extraction at approximately 49,000 workers.

The oil and gas pipeline and related structures construction sector was the fourth in most employees at 46,000. Oil and gas field machinery equipment rounded out the top five with 30,000-plus workers.

The average wage per employee was $125,000 last year compared to other private sector workers at $70,000. On a per-employee basis, the Texas oil and gas sector paid $55,000 in state, local and state royalties last year (almost nine times higher than other private sectors).

“With more than $72 million per day going to fund schools, roads and essential services, the impact of the oil and gas industry on the Texas economy and the benefit it provides to the citizens of our state is unmatched,” states Jim Wright, commissioner of the Railroad Commission of Texas.

Tennessee Titans’ New Stadium

LG Chem will break ground soon on its $1.6 billion battery plant in Clarksville, Tenn. Completion is targeted for no later than Jan. 1, 2025.

The Engineering News-Record reports that the National Football League’s Tennessee Titans have struck a $2.1 billion deal with Nashville, Tenn., to construct an enclosed stadium. A Turner-AECOM team was selected for the project, scheduled for completion in 2027.

The facility will be constructed in parking lots adjacent to the existing Nissan Stadium, totaling 1.75 million square feet with a seating capacity for 62,000 fans.

Nashville remains a hotspot for big projects, with construction starts forecasted to rise by $1 billion in 2024. Residential starts are expected to jump sharply, with commercial and manufacturing starts declining slightly.

“Construction in Nashville is starting to see a slowdown, but the amount of backlog is still very strong, notes Eric Pyle of Bell Construction. “It’s harder to secure financing for new projects because banks are more discerning about their lending practices. I expect a noticeable slowdown in construction through 2024 as financial institutions limit their current exposure and the nation awaits the results of the 2024 election.”

He points to higher interest rates as the top challenge for building in the Nashville market because they are making it more difficult to break ground on new projects.

Wary banks aren’t the only headwinds. “For all contractors, the competition of qualified talent continues to be a major challenge,” he adds. “The construction industry is also facing a generational gap, with its workforce aging and fewer workers entering the market to backfill more experienced positions.”

With this in mind, the PVF Roundtable continues to work diligently to support the education and training of young associates for the PVF sector by providing scholarships through the PVF Charitable Foundation.

Georgia Construction Starts

Atlanta construction starts are predicted to jump by more than $1 billion in 2024. Commercial and manufacturing are expected to drop from $5.1 billion in 2023 to approximately $4.9 billion in 2024. Again, ground development in several Atlanta markets could soon see challenges from rising interest rates, declining property valuations and current construction costs.

Rivian is preparing to begin construction of a $2.5 billion electric vehicle manufacturing facility in Rutledge, Ga. The total investment value is expected to total $5 billion, with work set for completion by July 2026.

Pricing and the availability of commodity carbon steel butt-welding fittings and forged steel flanges remain stable. However, supply chains remain vulnerable to disruption with tensions rising in the Pacific and the Mideast. Keeping close contact with your manufacturer/supplier is wise to avoid surprises.

With the escalating volatility in the Mideast, traders are closely following the disruption of traffic that carries nearly 12 percent of the global oil trade.

As of this writing, the WTI price is at $75.91/barrel and Brent at $81.32/barrel, edging up due to slim progress in the Gaza peace talks, U.S. tensions with Iran and smaller U.S. output growth estimates.

PVF Roundtable News

The Feb. 13 PVF Cocktail & Commerce Tabletop Show and Membership Drive had an amazing turnout, resulting in a resounding success, followed immediately by the networking session.

The PVF Roundtable’s Annual Golf Tournament is scheduled for May 13, 2024, at The Clubs of Kingwood in Kingwood, Texas. This is the most popular fundraising event of the year for the PVF Roundtable Charitable Foundation, drawing participants from all parts of the country.

The PVF Roundtable Golf Tournament and TroutBlast are the major fundraising events scheduled for 2024. The Weldbend Corp., Ferguson Industrial and MRC Global are key sponsors of these events.

The next Networking Meeting of the PVF Roundtable will be May 14, following the PVF Annual Golf Tournament, beginning at 4 p.m. at The Bell Tower on 34th in Houston. 

As a member of the board of directors, and I speak for all members, we sincerely thank you for your participation in these events.

With the geopolitical uncertainties in the world today and the influence they have on the PVF market, these meetings are of the utmost importance for you and your associates. These events provide the platform to share information, discuss pertinent issues, meet new contacts, develop long-lasting friendships and pursue new opportunities in the industry.

The Annual MCAA Convention is scheduled for March 17, 2024, in Orlando, Fla. The temperature of the mechanical contractor industry regarding the outlook for the construction sector will be reviewed in the May column.