In the coming year, federal and state governments will pump trillions of dollars into the nation’s aging infrastructure and utilities to build smarter, more balanced grids. This is just one of the top predictions for 2018 from engineering, environmental consulting, and construction-management services firm TRC Companies Inc.
“2018 is shaping up to be a dynamic year across all of our market sectors,” said TRC CEO Chris Vincze. “With the new administration in Washington entering its second year, a mix of new legislative initiatives, ongoing regulatory changes, and always-changing market forces will combine to trigger a year of big transition – most of it positive to the economy and the environment.”
Here are TRC experts’ top 10 predictions for 2018, by business sector:
1. Comprehensive federal infrastructure legislation will bankroll projects big and small across the country.
“With the U.S. House and Senate trying to reconcile separate tax reform bills that each include corporate tax rate reductions, the next big piece of legislation will be long overdue infrastructure funding. These two significant pieces of legislation will spur continued growth and tax revenue to keep the economy growing well into the next several years. This will bolster federal, state and local government budgets, resulting in additional infrastructure investment from all levels of government.” – Doug Massih, President, Infrastructure Sector.
2. States will rely on alternative approaches to planning and construction in order to pay for their projects
“Expect a large upswing in design/build transportation projects and more public/private partnership procurements. These more agile delivery methods could be the best way for states to meet their funding goals, depending on what happens with the Trump administration’s planned infrastructure push and potential staffing cutbacks at state transportation departments.” – David Clevenger, Principal, Transportation Design.
3. A boom in projects in some states will prompt labor shortages across the spectrum – and lead to delays for companies that don’t plan accordingly.
“States will continue to lead the way in terms of public programs over the next three years, causing potential labor and professional shortages as projects are teed up. As an example, in California, major water projects such as the Sacramento Delta project and the tremendous number of transportation infrastructure projects under consideration will lead to an acute shortage of professional and field labor. The shortage of personnel will even impact oversight agencies. This will back up schedules for some projects. Firms will need to strategically re-allocate or relocate personnel to keep projects on target in advance of this phenomenon.” – Dave Zarider, Senior Vice President, California Initiative.
4. The transition to renewable sources of energy will continue unabated.
“TRC is experiencing strong demand in solar siting projects, and overall U.S. spending on renewables – solar, wind, geothermal, hydro – is anticipated to exceed $13 billion per year through 2020.” – John Cowdery, President, Environmental Sector.
5. Expanding energy storage and finding new uses for old power plants will become priorities.
“Interest in grid-integrated energy storage and distributed generation will remain high. Look for growing interest on the part of utilities to supplement grid hardening activities in order to make them more resilient to storms, natural disasters, cyber attacks or terrorist threats. And interest in alternative uses for low capacity factor and shuttered power plants will grow as land developers capitalize on the unique infrastructure that these sites provide.” – Mark Hall, Vice President, Power Generation.
6. The push for smart grids will pick up from both the utility side and the regulatory side.
“Utilities will continue to review, evaluate and invest in distributed generation while working with regulators to pilot projects and demonstrate the value of intelligent grid systems. The key to truly smart grids will be IT and telecommunication upgrades that optimize system measurement and monitoring capabilities. This will improve the ability to prevent system outages and reliability/quality impacts from the integration of renewable technology or natural disasters.” – Stephen Persutti, Vice President, Utility Development.
Oil & Gas
7. Pipeline rules will be in flux, with new rules being finalized, others eliminated and new ones created.
“The haze of regulatory uncertainty that follows any White House transition has slowly begun to clear, and its impact on pipelines will be felt in 2018. The Pipelines and Hazardous Materials Safety Administration (PHMSA) has new leadership, and we can expect to see action on rules affecting underground storage of natural gas and hazardous liquid pipelines – some of them with clear compromises showing. The natural gas transmission and gathering rule (the so-called “Mega Rule”) will continue to be hotly debated through PHMSA advisory committees, with a final rule possibly coming near the end of 2018.” – Jeff Wiese, Vice President, Pipeline Integrity Services.
8. Investment in natural gas projects will be tempered by low prices.
“Due to massive capacity additions to the global LNG trade – mainly from the U.S., Russia and Australia – the average price of natural gas will stay below $7 globally and below $3.50 in the United States. This will stifle investment in many long-term projects, such as global-scale LNG export facilities. Import and utilization infrastructure in the form of terminals, pipelines and power plants will need time to catch up with the new export capacity.” – Paul Sansom, Oil & Gas Market Analyst.
9. Technological advancements will lead to increased air quality monitoring.
“Low-cost ambient air sensors will emerge as credible tools to support ambient air and indoor air quality monitoring programs. Ambient air sensor technology and data reporting protocols continue to advance, resulting in measurement instrumentation with improved reliability, accuracy and precision. And many of these new sensors are capable of real-time, cloud-based reporting. As a result, sensor technology will support energy and indoor air quality management programs in commercial buildings and find an expanded role in community air monitoring programs, such as those anticipated under California Assembly Bill 617.” – David Elam, Vice President – Project Director, Air Measurements.
10. Renovation and re-use will be the name of the game in commercial real estate.
“With the overall economy likely to continue growing, the real estate market will remain active. And that means prices will remain high in all the major city markets, forcing businesses and developers to start looking at Class B or C space at more reasonable rates and then investing resources to upgrade these properties.” – David Tiernan, Senior Vice President, National Practice Leader, Building Sciences.
“Trying to predict what the future holds is always a challenge because there are so many variables and unknowns,” said Vincze. “The one thing I do know is that whatever unfolds in 2018, TRC will be there to help our clients navigate any changes or challenges they encounter and capitalize on any new opportunities that arise.”