North American Oil & Gas Pipelines

JUN 2018

North American Oil & Gas Pipelines covers the news shaping the business of oil and gas pipeline construction and maintenance in North America, including pipeline installation methods, integrity management innovations and managerial strategies.

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Page 18 of 43 JUNE 2 018 | North American Oil & Gas Pipelines 19 U.S. increasing this year, we anticipate additional pipeline capacity will be required. We expect natural gas systems will make up most of the work, with a few large diameter liquids pipelines. We believe 2018 and 2019 will quite possibly be the peak years of this decade for pipeline construction. Canada E&P investments are expected to re- main nearly the same as 2017, which was a large increase over 2016. Riess: Our projections show that 2018 will be the best year the pipeline industry has experienced since we started keeping records as a union organization through the PLCA. Previously, the three most labor intensive years were 1966, 2008 and 2017, which together exceeded 12 million manhours according to the United Association. Our measuring stick, if you will, is the tracking of welders' man- hours. Judging by big projects in the Northeast and others around the country, we expect to exceed 13 million manhours this year. Waugh: Mainline pipeline growth has been hampered by lack of coastal exit points for Canadian resources. Canadian pipeline ac- tivity has been slowly increasing over the past couple of years. The expectation is that this trend will continue as long awaited major projects become increasingly active in 2018 and beyond. What is the biggest challenge facing the pipeline industry today and how do you address it? Dearing: It's a combination of politics, environmental impacts and landowner issues. Educating people on the benefits and safety of pipelines should definitely be a priority. Osborn: The biggest challenge we face in today's pipeline indus- try is the workforce. As the baby boomers are retiring out of the busi- ness, we now have a shortage of qualified people in the industry. The traditional pipeliner is becoming a dying breed. The younger generation doesn't have the same interests as the older generations had when it comes to long hours, travel and physical labor. The wag- es and benefits in pipeline construction are better than they have ever been, yet drawing new people into the industry remains a big challenge. Therefore, industry associations like the PLCA, DCA and INGAA have put committees together to strategize on how we can attract and retain young talent to serve the future of the pipeline industry. Riess: The biggest challenges have been the state and local permit- ting agencies, as well as activist group pushback. The gas companies are apprehensive of regulators now, and dread dealing with protes- tors at jobsites. With this new set of challenges that our industry has never faced before, it's causing our clients, the gas companies, to do business in a different way than ever before. Complicating matters further is the unpredictability of the regulatory side of the industry. Waugh: One of the biggest challenges facing our industry is the misinformation that led some to adopt an anti-pipeline stance. To overcome these sentiments or feelings, our group engages with poli- ticians, indigenous peoples and other key stakeholders to educate with facts that detail the considerable socioeconomic and environ- mental benefits from transporting Canadian resources via pipelines. Craig: Regulatory uncertainty and environmental opposition. The fact is that pipelines are the safest way to reliably deliver the energy our society depends on and the standard of living to which we've grown accustomed. And it's incumbent on us to educate all stakeholders, including federal, state and locally elected officials as well as landowners, indigenous tribes and affected communities about the importance of domestically produced, clean burning nat- ural gas to both our present and future. How has the current political landscape impacted pipe- line construction? Osborn: First of all, the Trump administration filled the vacant seats at FERC. This was critical in breaking the logjam of projects that had been applied for. There is no question that the Trump ad- ministration has helped jumpstart the major projects that were held up during and as a result of the Obama administration. The new administration's efforts help streamline the cumbersome regulatory process and provide necessary relief to the gas and oil companies. Waugh: Focusing only on the Canadian landscape, the Trudeau government has recently supported two major projects (Trans Mountain Expansion and Line 3 Replacement) while rejecting a third (Northern Gateway). These two projects represent approxi- mately 2,000 km (1,200 miles) of large diameter transmission line work over the near term. However, there is a significant challenge associated with the significant uncertain regulatory process that owners must navigate to ultimately get a pipeline approved. As well, challenges exist at the provincial level of government whereby some provinces are pro-pipeline and others are not. With the lack of strong federal intervention projects become frozen in provincial standoffs. Craig: The political landscape is mixed. We have an administra- tion that's very supportive of domestic energy production and as- sociated infrastructure, but, on the other hand, we have individual groups, courts and states that are becoming quite effective in delay- ing an already robust regulatory review process. There has been a sense that industry stakeholders are looking to get as much work completed before the 2020 U.S. Presidential Elections. Is that true? If so why? Dearing: True, simply because there is uncertainty on who the next president will be and their stance on pipeline construction. Craig: I can't comment on individual companies and organiza- Neil Waugh Andrew Craig Robert Osborn Mike Dearing Rob Riess Pipeline Experts Provide Market Outlook

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