September marks the end of 2024’s third quarter, with many uncertainties affecting the prospects for the PVF industry sector of the economy. Political uncertainties and global events unfolding as of this writing may profoundly impact our industry as we enter the fourth quarter of the year.

The stock market, as of this writing, is experiencing a correction that has not been seen since 1987, indicating that our economy is entering a recessionary cycle. How heavily this will impact the energy sector of the economy remains uncertain.

Should Kamala Harris be elected as President of the United States, her stance on eliminating fracking and offshore drilling (despite her sudden epiphany reversing it) will have devastating economic effects on our industry and consumers’ energy costs. 

U.S. voters head to the polls in less than two months. Consequential issues pertaining to the economy’s energy sector should be considered when casting your ballots.

While U.S. gasoline demand was expected to rise during the summer travel season, those expectations fell short. The U.S. Energy Information Administration (EIA) stated that refiners boosted their processing capacity to 93.5 percent in the second quarter, expecting a growth in gasoline and diesel demand during the summer that did not materialize. 

As of this writing, oil pricing for WTI is at $72.84/barrel and Brent is at $76.09/barrel.

The price of crude oil accounts for approximately half of what the consumers experience at the pump. The rest comes from transportation costs and federal, state and local taxes.

The EIA expects retail gasoline prices at the pump to average $3.40/gallon through the remainder of 2024 and increase to $3.50 in 2025.

Construction Projects

According to Industrial Info Resources, there is more than $3.3 billion worth of active and planned expansion and unit addition projects for U.S. refineries. Nine new projects are set to start construction through the remainder of 2024.

Vista Energy intends to repower its Coleto Creek power plant in Goliad, Texas, from coal to natural gas-fired. The plant will have the capacity to produce 600 MW of electric power. Completion is projected by 2027.

Bechtel Energy has agreed to a fixed-price engineering, procurement and construction contract for the second phase of Sempra Infrastructure’s Port Arthur, Texas, liquid natural gas (LNG) expansion project. The project’s total investment value (TIV) is estimated to be $10.5 billion. However, it still needs export approval from the U.S. Energy Department.

Sempra has indicated it is moving forward with the proposed Titan carbon sequestration project to capture carbon dioxide from the Port Arthur LNG facility. The project would transport captured CO2 via pipelines to an underground injection well one mile below the surface. It has begun the permitting process for the project in a filing to the U.S. Environmental Protection Agency.

In Louisiana, Industries Holdings, Mitsui & Co. and JERA Americas plan to construct the Blue Point Ammonia Complex in Donaldsonville. The project will include the ammonia plant, cooling towers storage and loading facilities to manufacture low-carbon ammonia. Construction on the $1.15 billion project is expected to start in February 2025.

In Hawaii, Bana Pacific plans to construct a renewable natural gas plant on the island of Oahu. The project under design could include a connector pipeline. The design is expected to be completed by the end of the fourth quarter, with an estimated TIV of $200 million.

Pipeline Objections

As of this writing, the U.S. appeals court threw out the Federal Energy Regulatory Commission’s (FERC) “arbitrary and capricious” approval of a new $1 billion natural gas pipeline project running through five mid-Atlantic states slated to serve 3 million clients. 

Agreeing with six environmental groups and eight U.S. states, the D.C. Circuit Court of Appeals said FERC did not properly address the objections to the Regional Energy Accuse Expansion Project planned by Transcontinental Gas Pipeline, a unit of Williams Cos.

This is more evidence of the current administration’s war on fossil fuels, resulting in higher energy costs for commercial and private consumers. In turn, costs rise across the spectrum of all goods and services.

Chevron has decided to move its headquarters to Houston after 150 years in California, where the company was formed. California is a tough place to do business. Andy Walz, Chevron’s president, stated that the company has been gradually moving a number of employees to the new headquarters as keeping them in the Golden State was becoming unsustainable.

Global Oil Supply Concerns

As of this writing, Iran announced a retaliatory strike against Israel for the preemptive Israeli strike in Iran that neutralized high-ranking senior Hezbollah leader Ismail Haniyeh in Tehran.

Depending on the size of the response, Israel may choose to attack the infrastructure of Iran, especially the refineries and oil fields. Iran exports are a critical source of income for the regime and a significant supplier to China.

The ramifications of such an act will dramatically impact the supply and pricing of oil on the world market.

Continued escalation of the conflict between Israel and Iran has the world’s attention as this could erupt into a major war in the Middle East that could easily expand into a regional or global conflict. 

The pricing and the availability of commodity carbon steel butt-welding fittings and forged steel flanges remain stable. 

.However, with tensions continuing to rise in the Middle East and the Pacific and the shipping constraints at the Panama Canal and the Red Sea caused by the continuing attacks on commercial shipping by the Houthi, supply chains are at risk for major disruptions. 

It is wise to remain in close contact with your manufacturer/supplier to avoid surprises regarding U.S. Tri-Seal compliance, pricing and the availability of pipe, forged flanges, butt-welding fittings, valves and other PVF-related products.

PVF Roundtable News

The PVF Roundtable (PVFRT) golf tournament, scheduled for May, was canceled due to extreme flooding. It has been rescheduled for Dec. 9, 2024; please check www.pvf.org for updates and details.

The PVFRT TroutBlast is scheduled for Oct. 3-4, 2024, with the Captain’s Dinner on Oct. 3, followed by the tournament the next day. Please check the PVFRT website for additional information due to the impact of Hurricane Beryl on Matagorda, Texas.

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 Oct. 8, beginning at 4 p.m., at Houston’s The Bell Tower on 34th.

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

With the geopolitical uncertainties in the world today and their potential effects on the PVF marketplace, Networking Meetings are now, more than ever, essential for you and your associates. These events provide the platform to share information, discuss pertinent issues, meet new contacts, develop new long-lasting friendships and pursue new opportunities in the industry.