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- Pipelines face massive overruns—labor, equipment, materials
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- Dam repairs are expensive
Link-Oil/Gas PipelinesPipelines facing escalating costs and cost overrunsBuuma, writer for the Wall Street Journal, 10/8/2009 (Christine, "Costs Rising for Natural Gas Pipeline Developers", http://www.downstreamtoday.com/news/article.aspx?a_id=18931&AspxAutoDetectCookieSupport=1, Wall Street Journal, October 8, 2009, Accessed: 6/28/2012) AHL Energy companies are rushing to build natural-gas pipelines to carry swelling supplies from onshore fields but, as the backlog of projects grows, costs are following suit. Developers including Kinder Morgan Energy Partners LP, Spectra Energy Corp. and CenterPoint Energy Inc. have faced escalating costs as they develop new pipelines to transport gas from the Rockies and from so-called shale plays, where gas is extracted from deep within formations of dense rock. Shale-gas production has grown exponentially in recent years as improved technology makes it easier to extract gas from these areas, creating a need for more pipelines to transport the output to market. Several major pipeline projects developed over the past two years, including the Rockies Express Pipeline, the Southeast Supply Header and the Midcontinent Express Pipeline, have been beset by cost overruns. Managing the increased costs of labor, equipment, materials and permitting has proved difficult for many developers, weakening the companies' balance sheets at a time when falling energy prices are putting a dent in their earnings. And as developers continue to build shale-gas pipelines, the financial risks are likely to persist. "When cost overruns become significant, the rates of return on these projects shift quickly from attractive to mediocre," said Jason Stevens, an analyst with Morningstar Inc. in Chicago. Pipelines face massive overruns—labor, equipment, materialsBuuma, writer for the Wall Street Journal, 10/8/2009 (Christine, "Costs Rising for Natural Gas Pipeline Developers", http://www.downstreamtoday.com/news/article.aspx?a_id=18931&AspxAutoDetectCookieSupport=1, Wall Street Journal, October 8, 2009, Accessed: 6/28/2012) AHL Pipeline projects that go significantly over budget tend to have weaker credit quality than other pipelines do. Moody's Investors Service in August gave a Baa3 credit rating -- barely investment grade -- to Southeast Supply Header LLC, a joint venture between Spectra Energy and CenterPoint Energy that built a 274-mile pipeline stretching from east Texas to Southeast markets. Cost overruns of about 50%, from the original $842 million to $1.2 billion, left the project saddled with debt. Spectra, which managed construction of the project, had delays in securing certain permits, said C. Greg Harper, senior vice president and group president, pipelines and field services, for Houston-based CenterPoint. A large number of pipelines being developed at the same time can overwhelm regulators, leading to increased wait times for permits. "The number-one rule is to have all your ducks in a row in terms of having the permits in hand," Mr. Harper said. Spectra did encounter some permitting problems for the Southeast Supply Header, but weather delays and the scarcity of experienced contract workers contributed to the bulk of the cost overruns, said Joseph Ramsey, group vice president, project execution for Spectra. Pipeline developers are also facing rising costs for labor, equipment and materials as companies compete for the same resources. The cost of building the 1,679-mile Rockies Express Pipeline from Colorado to eastern Ohio, developed by Kinder Morgan Energy Partners, Sempra Energy and ConocoPhillips, climbed to $6 billion from earlier estimates of $4.4 billion as a result of rising labor and permitting costs. Similar cost overruns beset the 500-mile Midcontinent Express from Oklahoma to Alabama developed by Kinder Morgan and Energy Transfer Partners LP. Costs for that project rose from an initial $1.25 billion to $1.8 billion. Labor and materials costs have eased somewhat within the past year as a result of the economic downturn, and developers can minimize financial risks by forming partnerships with other pipeline companies. Link-PortsPort infrastructure expensive- $2.37 billion price tagNagi, A writer for American Metal Market, 2012 (Catherine, “Dredging, infrastructure spending must top US priorities: AAPA chief”, lexis/nexis, 6-28-12) I.M.R. Dredging maintenance and infrastructure spending issues should be addressed before initiating discussions on growing the economy, according to the head of the American Association of Port Authorities (AAPA). "We talk a lot about wanting to increase trade and exports to boost the economy, but we need to first recognize that we must invest in our infrastructure so trade will be competitive," AAPA president and chief executive officer Kurt Nagel told AMM. "The last cycle of dredging funding was the highest level it has been, and it was barely half of what should have entered the system." Speaking on the sidelines of AAPA's Shifting International Trade Routes Conference in Tampa, Fla., Nagel said that money collected through the federal Harbor Maintenance Tax, a levy on goods shipped into the country, is not properly routed to maintain dredging needs at U.S. ports. As a result, he said, importers who bring in such heavy products as steel are unable to do so efficiently. The U.S. Army Corps of Engineers said that $2.37 billion was allotted for operation and maintenance in the fiscal 2011 budget, with another $264 million set aside for the Mississippi River and its tributaries. But some say that isn't enough. ." Link-Dams and WaterwaysThere is no money in the budget for dam infrastructureBoselovic, Reporter, 12 (Boselovic, Len, “Locks and dams repair budget dried up,” Pittsburgh Post-Gazette, Ebsco Host, Accessed: 6-29-12) ADJ Federal budget woes mean there is no more money for the foreseeable future to make major repairs to aging locks and dams on the Allegheny River, after one last project is completed before Memorial Day weekend, the U.S. Army Corps of Engineers said. The cutbacks come after the Corps' budget for operating and maintaining locks and dams on the river was cut from $8.4 million in the 2011 fiscal year to $4 million in the current year. The Corps expects it will also be hamstrung next year, based on the $4.3 million allocated for Allegheny River operations in President Barack Obama's 2013 budget. Corps spokesman Jeff Hawk said repair money will run out after work on the hydraulic system that fills and drains a lock at Highland Park is completed in time for the holiday weekend. "This is it for the Allegheny," he said. "If something breaks, we've got to scramble for funds and there's no guarantee we'll fix it." Dam repairs are expensiveNYT 11 (New York Times, February 21, 2011, http://www.nytimes.com/2011/02/22/science/22dam.html?pagewanted=all, Accessed: 6-28-12) ADJ Nationwide, the potential repair costs are staggering. A 2009 report by the state dam safety officials’ group put the cost of fixing the most critical dams — where failure could cause loss of life — at $16 billion over 12 years, with the total cost of rehabilitating all dams at $51 billion. But those figures do not include Lake Isabella and other dams among the approximately 3,000 that are owned by the federal government. The corps, for example, says that more than 300 of the roughly 700 dams it is responsible for need safety-related repairs, and estimates the total fix-up bill at about $20 billion. The corps has already spent about $24 million just to determine the scope of the problems at Lake Isabella, and with the New Orleans levee failures during Hurricane Katrina a lingering memory, Congress has appropriated money for other federal dam repair projects as well. But about two-thirds of all dams are private, and financially struggling state and local governments own most of the remainder. It is difficult to predict how needed repairs to these dams will be financed; legislation to provide federal money to help has languished in Congress. What’s more, the number of high-risk dams keeps rising as structures age, downstream development increases and more accurate information is obtained about watersheds and earthquake hazards. Among the corps’s dams, Lake Isabella is one of 12 that are ranked in the highest category, as a dam with serious problems and serious failure consequences, given the large downstream population. “The classification is it’s an unsafe dam,” said Eric C. Halpin, the corps’s special assistant for dam and levee safety. But Mr. Halpin noted that 319 of the corps’s dams were considered “actionable from a safety standpoint.” Directory: files files -> Answer True False 2 points Question 2 files -> Integer programming and game theory files -> 4 Integer Programming files -> Bpa vehicle Window Repair Scenario #1 task: Procure vehicle window relacement. 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