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Constructing (and Eating) a Piece of the Energy Sector Pie… An Interview With Melvin Stroble, REM, Project Manager, Energy for Black & Veatch
December 15, 2014
Everyone likes pie of some sort, especially around the holidays. For those working in the construction industry, the rapidly developing energy sector appears to be an ever-expanding “Job Pie” for contractors designing, managing, supplying, engineering, clearing and erecting projects for participants in the energy sector. For clues on how to follow the pie crumbs to real construction jobs, I turned to Melvin Stroble of Black & Veatch. Here is a slice of the information Mr. Stroble shared with me.
 
Q. Do you believe construction work is available on energy sector projects?
 
A. Absolutely. As the energy sector expands domestically and evolves globally through changing technology, resources, and energy delivery methods and usage, there are ever-increasing opportunities for construction companies. For example, Duke Energy and Dominion partnered to bring natural gas into the Carolinas via the 550-mile long Atlantic Coast Pipeline. The pipeline is planned to run from West Virginia to Robeson County, North Carolina. This is reported to be a $5 billion project, and will require members of virtually every construction trade, as well as construction industry professionals, to bring the project to reality.
 
Q. Do you see a need and/or opportunity for partnerships among contractors to successfully bid and complete energy-sector projects?
 
A. Yes, I see both need and opportunity. Many energy sector projects, such as the pipeline project I mentioned, are very large – such that national or even global companies with strong balance sheets are required to serve as prime contractors. In turn, these prime contractors are responsible for identifying qualified subcontractors to perform the work, including Disadvantaged Business Enterprises (“DBEs”), Minority-owned Business Enterprises (“MBEs”) and Women-owned Business Enterprises (“WBEs”). To successfully bid on energy sector projects, various MBEs, WBEs and DBEs, as well as smaller contractors, can partner to pool financial resources, experience, materials, equipment and labor, and qualify for and complete projects for energy industry owners. 
 
Q. Can you identify some specific energy sector projects for contractors hungry for a piece of this energy sector pie?
 
A. Yes, six such projects come to mind: 
(1) Ash pond closures
(2) Retirement and/or abandonment of old coal-fired utility plants
(3) Natural gas pipeline construction
(4) Solar/wind farms
(5) Repowering existing coal-fired boilers; and 
(6) Gas-to-liquids (“GTL”) facility construction.
 
Q. For each of these energy sector projects, what trades will be in demand?
 
A. Good question. I will break it down for each project type.
1) Ash pond closure for utilities: 
These types of projects will involve civil engineering, grading, material transporting and earth moving trades. 
 
2) Retirement and/or abandonment of coal-fired utility plants: 
These projects will involve commercial general contractors, reverse engineering, steel work, demolition, asbestos and lead paint abatement, site grading and drainage, wastewater basin closures, environmental controls work, materials and waste transportation, and salvaging/recycling work. 
 
3) Natural gas pipeline construction: 
Nearly every possible construction trade will be required to construct the pipeline, from construction of laydown yards to storage facilities. Experienced structural steel erectors and welders, pipe fitters/welders, concrete placement crews, erosion control device installers, and clearing and excavating crews will be involved.
 
4) Solar/Wind Farms: 
Solar farm construction is highly repetitive and requires combination crews performing post installation, panel rack erection, panel installation, equipment foundations, trenching and cabling, as well as medium and high-voltage electrical equipment work. Large solar projects require a large site footprint which requires significant land clearing and grading. Wind projects require construction of temporary and permanent roads, large foundations, trenching, medium and high-voltage electrical work, as well as heavy rigging and lifting capabilities. Further, once the projects are operational, service contractors will be required to perform requisite maintenance.
 
5) Repowering Existing Coal-Fired Boilers: 
Due to the low, stable price of natural gas and the added benefit of reduced air emissions, utilities are converting existing coal-fired units to natural gas firing, which requires new equipment installation, pipe fitting/welding capabilities and associated electrical work. In addition to services associated with retirement of coal-fired utility plants, repowering projects may include de-construction of coal-handling facilities, electrical engineering, erection services, and reconfiguration of water intakes and wastewater systems.
 
6) GTL facilities construction:
Facilities process natural gas extracted from the Utica and Marcellus shale formations into liquid products such as solvents, lubricants, waxes and transportation fuels. GTL facilities require extensive planning and site work are required, as well as engineering, environmental, drilling, design, procurement and legal work.
 
Q. For all six of these projects, do you believe that smaller and/or MBE/WBE/DBE contractors can seize work opportunities by joining forces? 
 
A. Yes, presuming the contractors meet the contract requirements. For example, three separate excavating, grading and post-construction landscaping companies can collaborate to bid on multiple parts of a given project. Resources, experience, equipment and labor can be pooled to generate opportunities and efficiencies required to successfully bid on and complete the work required for these types of construction projects. 
 
Q. How do the smaller subcontractors find each other so they may collaborate?
 
A. The first step is often building a relationship with the local or regional utility. Utilities have coordinators to lead efforts to identify DBE/WBE/MBE contractors, so learning how to qualify for this list is essential. The challenge for national prime contractors is to identify interested, qualified DBE/WBE/MBE firms. Thus, many large, prime contractors look to DBE/WBE/MBE-focused organizations to serve as a clearing house for identifying potentially qualified subcontractors. In the Carolinas, contractors can communicate with the state energy offices for resource information such as the South Carolina Energy Office and the NCDENR Energy Section. Smaller contractors can become active in existing programs that support energy forums such as the October 2014 “Making Energy Work” forum in Charlotte, North Carolina, or the July 2014 South Carolina Clean Energy Summit. Smaller subcontractors should keep abreast of relevant educational and informational programs and further use those events to network. Finally, companies have to be willing to use and “sell” prior experience as a springboard to energy sector work. For example, grading contractors with extensive experience grading sites for large box retailers and commercial space may have the experience and equipment needed to grade sites for construction of power facilities or re-grade old utility sites that have been demolished.
 
Q. Do you have a “success story” about a small contractor landing an energy sector job that you can share with our readers?
 
A. Yes. I knew an “odds and ends” contractor that handled very small, punch list types of projects for a utility, SCANA. The contractor was reliable, flexible, performed quality work and built a good relationship with that utility over time. Eventually, the contractor obtained a higher end maintenance contract of above-ground facilities through partnering with another company, and it went from a five-employee to a 25-30 employee company. 
 
 
Thank you for your time and input for our readers.
_____________________________________
 
Melvin Stroble is a Registered Environmental Manager and is currently the Project Manager for Energy Projects for Black & Veatch. Mr. Stroble has more than 27 years of experience in the construction and energy industries. He previously served as a supervisor at a mid-sized electric utility, and environmental manager for an interstate natural gas company. Mr. Stroble has worked with contractors and consulting firms since 2007. I met him through the United Minority Contractors of North Carolina.
 
Black & Veatch is an employee-owned, global leader in building critical human infrastructure in Energy, Water, Telecommunications and Government Services. Since 1915, Black & Veatch has helped its clients improve the lives of people in over 100 countries through consulting, engineering, construction, operations and program management. For more information, go to www.bv.com.


 
 
Construction Law Stephanie U. Eaton
336.631.1062
sroberts@spilmanlaw.com