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Industrial Hotspots: U.S. Nuclear Power Industry Evaluates 59% Capacity Expansion

U.S. Nuclear Power Industry Evaluates 59% Capacity Expansion

Industrial Info Resources (www.industrialinfo.com) said there are 48 nuclear power plants being evaluated for development by both utilities and private investment groups. If all were to come on line - a dubious likelihood - it would result in a 59% increase in nuclear generating capacity from 102,400 megawatts to 163,500 MW. Currently there are 104 units operating in the U.S., according to industrialinfo.com, but no new ones since 1996.

Nuclear power plants currently provide about 20% of this country’s electricity. DOE projects a 45% growth in electricity demand by 2030, and 35 to 50 new nuclear plants would need to be activated by then in order to maintain nuclear’s share of the energy market. Efforts are underway between the U.S. government and the nuclear industry to reduce licensing time to about five years compared to the 10-20 years previously experienced.

Industrialinfo’s projection of 48 units being contemplated is higher than the figure of 30 new units cited by the Nuclear Energy Institute at its annual conference last May.

Here are some other industrial “hotspots” cited by industrialinfo.com.

Industrial Manufacturing. As of the end of June, the Industrial Manufacturing industry saw over 1,000 projects begin construction worth in excess of $35 billion in North America. As of that date, Industrial Info Resources was tracking 800 capital and maintenance projects worth an estimated $28 billion that are scheduled to begin construction during the second half of 2007 within the Industrial Manufacturing industry. Currently the Mid-Atlantic region in the United States has a slight edge over the Great Lakes region as the location of the most spending during the second half of 2007. The Mid-Atlantic Region is currently expected to be home to $5.1 billion worth of project activity while the Great Lakes Region is a close second at $4.8 billion. Despite recent woes, the automotive sector is still planning to spend significant amounts of money on expansions, retools and grassroots facilities in the region, the hub of the industry. Some of the key projects expected to begin construction later this year include a proposed $730 million grassroots engine plant in Michigan; a proposed $700 million grassroots axle plant, also in Michigan; a proposed $560 million grassroots transmission plant in Indiana; and a proposed $500 million engine plant expansion in Wisconsin.

Pipelines. Over $6.8 billion in proposed pipeline projects are scheduled to begin construction in 2008 in the southwest U.S. The pipeline projects include crude oil, refined petroleum products and natural gas transmission. Texas represents 40% of the planned projects in dollar value at $2.7 billion spread across 24 projects. Louisiana has 11 projects pending representing $1.7 billion and Oklahoma has 10 proposed projects worth an estimated $1.5 billion. The majority of the scheduled construction start-ups for these projects are expected between February and June 2008.

Copper mining. The North American copper mining sector, after years of downsizing in the 1990s and early 2000s, has undergone a major consolidation and rearrangement of production capacity. Since 2002, favorable copper demand and commodity prices have driven capacity increases and modernizations at existing copper mines and downstream processing facilities. Grassroots operations are also under development and projects that were unfeasible for years have become feasible.

Great Lakes Region. The Great Lakes Region recorded a total of 527 construction and maintenance projects between January and June 2007, worth in excess of $15.1 billion. An additional 572 projects worth $27 billion will break ground between July and December. Leading the spending charge is the Alternative Fuels industry with $8.8 billion worth of ethanol and biodiesel project activity coming up.

Mid-Atlantic Region. The Mid-Atlantic Region is the only region in the country showing a decline in spending when compared to 2006. The percentage drop is 12.6% from $24.76 billion in 2006 to $21.64 billion in 2007. $21.64 billion is still a high level of activity, however.

Northeast Region. A recent analysis of Industrial Info’s active plant database revealed that in the first six months of 2007, $11.5 billion worth of Capital/MRO (maintenance) investments began construction. This is an enormous jump in project activity over the same time frame in 2006, when there were 60 projects with a cumulative investment of just more than $1 billion that got underway.

New England Region. The New England Region is currently anticipating 34 new industrial plants to begin operations throughout 2007, a gain of 53% over 2006, when 18 plants opened. The combined total investment value (TIV) of projects sourced from this year’s plants, both for original construction costs and planned future projects, is $616 million.

Nueces County, TX. A large concentration of refineries and chemical plants currently are evaluating more than $2.1 billion worth of industrial project spending from 41 major projects in this county, centered around Corpus Christi. Petroleum refining commands almost 50% of the planned project activity.

Louisiana. Industrial firms are developing 259 capital and maintenance construction projects representing $10 billion in total investment value in Louisiana, scheduled to begin construction in 2007. This is a 30% increase from the value of project kick-offs in 2006. Projects include oil and gas terminals, petroleum refining, chemical processing, alternative fuels and power plants.

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