PCCA Journal|2
nd
Quarter 2013
12
• Will wage inflation due to skilled labor shortages along
the Gulf Coast pull open-shop labor away from Western
Canada and other parts of the U.S.?
• Are there opportunities for self-performing union firms to
offer compelling value propositions in open-shop markets
due to having negotiated wage rates and the ability to
scale?
• What do Canadian owners do to source qualified skilled la-
bor to projects in the oil sands if U.S. labor supply is tight?
Trend 2: Current and potential revitalization of stagnant
or declining regional economies
In addition to Texas and Oklahoma, much of the new uncon-
ventional oil and gas production is taking place in regions of
the country where there is limited infrastructure. The regions
include the Bakken Shale play in North Dakota and Montana,
Utica Shale in Ohio, and Marcellus Shale in Pennsylvania.
Questions to consider include:
• In addition to upstream and midstream energy construction
(pipelines, stations, and processing plants), what are the
civil, residential, and commercial construction opportuni-
ties for housing, retail, education, and civil infrastructure
in these markets?
• North Dakota’s population is growing for the first time in
decades. What about population centers in North Central
Pennsylvania and Western New York, such as Elmira,
Corning, Binghamton, Scranton, and Wilkes-Barre? These
declining industrial towns are being revitalized based on a
new energy-based economy.
Trend 3: The transition of North America
toward energy independence
North America is moving rapidly toward
energy independence, and the U.S. may
soon become the largest producer of liquid
petroleum in the world and a net exporter
of LNG and NGLs. The advantages of low-
cost electricity and petrochemical feed-
stocks are drawing petrochemical, chemi-
cal, and industrial manufacturing back to
the U.S. Consider the following:
• How likely are these predictions of a
major U.S. manufacturing renaissance to
come true, and what is the implication
for U.S. industrial construction for the
next decade?
• Much of the oil and gas production is
taking place in the Upper Plains and Midwestern regions
that are traditional strongholds of middle-skill union labor.
Is this an opportunity for these industrial communities
and labor organizations to reverse years of decline through
proactive measures to capitalize on these trends?
• Other than the Gulf Coast, where will industrial manufac-
turers, such as BASF, Dow, Dupont, General Electric, and
Air Products, invest?
• How will the transition by the U.S. market from a net
importer of energy to a net exporter of energy affect global
trade and national defense priorities?
Trend 4: A sustainable competitive advantage for U.S.
manufacturing
China, India, and other large population countries with ex-
panding economies and rising middle-class populations have
tremendous demand for electricity and energy (see Exhibit
4). North America has an abundance of coal, cheap and
cleaner-burning natural gas, and major cost advantages over
China and India, which have neither asset.
• How will the balance of trade manufacturing output be af-
fected by this new reality?
• Will U.S. coal-fired power plants be decommissioned or
converted to natural gas faster than current predictions?
What are the implications for design and construction of
simple and combined cycle power generation and associ-
ated transmission and substation construction?
• What is the impact overall for the growth of renewal gen-
eration from wind, solar, and biomass, with U.S. carbon
emissions declining due to energy conservation initiatives
A Case for Optimism
Continued from page 11
Exhibit 4
Global Energy and Electricity Demand Growth Through 2035
Source: International Energy Agency, December 2012
+70%
+30%
Electricity
Demand
Energy
Demand
Relative electricity growth