June 2020 Vol. 75 No. 6

Editor's Log

Changes in a Viral World

Changes in a Viral World

At press time in late May, most of the nation – and indeed, much of the world – was attempting to slowly return to normal. At first glance, this slow, deliberate and cautious path was effective as masked faces began to leave their houses and experience life again, just in time for summer.

Unquestionably, the Covid-19 virus changed our way of life; much of our work practices changed accordingly and dramatically, as well. No doubt, that change applies to various underground infrastructure markets as well.

Our quarantined nation dived into a work-from-home “new normal” at levels heretofore undreamed of in modern culture. America discovered that the conveniences and necessities of modern communications could not be underestimated nor overlooked to maintain a robust delivery of service and the needs of working Americans.

Service upgrades and fiber-to-the-home subscriptions jumped in numbers as workers strived to better position themselves to enable first-class project delivery and productive performance. Streaming entertainment took on an even great role.

For the most part, where possible and practical, America’s broadband network has performed admirably under extreme duress and unimagined challenges.

It is anticipated that working from home, which was already a steadily growing trend and now a verifiable success on a wide-spread basis, will continue to trend at a high level. Demand for broadband services is accelerating from already record levels. Life has changed and it now involves working from locations other than just the office. Executive personnel, who themselves were forced to stay at home, discovered the largely seamless transition of personnel to a new and productive work environment.

Insurance companies, teaming with doctor’s offices and hospitals, had already been promoting the benefits of teledocs. Broadband provides the opportunity for easy sharing and access of massive data contained in medical records. Combine that with high-quality video and records access, and the pandemic pushed the medical community into even more rapid teledoc expansion and applications. Office visits are going to see a substantial decrease as these services continue to improve. Broadband is making that possible and practical.

Through it all, the horizontal directional drilling (HDD) industry continues to play an essential role in the broadband and 5G buildout. As our annual HDD survey (see page 18) reveals, most contractors involved in those markets experienced very little slowdown in work as the coronavirus hit its peak. On the contrary, with the need for broadband and 5G services, contractors in those fields remain in high demand.

On the other hand, large HDD operators saw a nightmare scenario. With much of their work linked to energy, the slowdown in pipeline construction became a disaster. The Saudi Arabia-Russia price war, combined with a net loss of 30 percent of oil and gas usage from slowed economies, ground the energy market to an inevitable halt. The U.S. shale industry was caught squarely in the middle.

As is well-documented, the Green New Deal radical segment of Congress relished the crash of the oil and gas market. Thus, the pipeline market is carefully considering its path as all-out war with environmental zealots will most likely intensify yet again as the virus threat fades. That situation has already cost the industry billions in canceled pipelines and project delays.

Combining the environmental issues with international political manipulations and a struggling economy paints an extraordinarily complex picture for the immediate future of energy. The good news is that oil prices have already displayed remarkable resiliency as the economy starts back up. Still, the oil and gas industry faces an incredible headwind moving into the second half of 2020. The question becomes: how long before pipeline work resumes
and HDD services return?

For the underground rehabilitation industry, the struggle to survive in the pandemic world has been a mixed bag of results. We hear everything about rehab projects, ranging from markets being just “fair” to “pretty good,” to “we can’t keep up we’re so busy.” The danger with sewer and water work is that as usage falls for such services, so does revenue. And with people confined to homes, local sales tax dollars fall as well.

Markets will come back with the economy, but it is yet to be seen how much of a hiccup tax and user revenue takes. The hopeful news is that a new stimulus bill making its way through Congress will include large underground infrastructure investments. Depending on the timing and amounts, that could replenish muni coffers in 2020, as well as boost projects into 2021.

The virus ran amok around the planet with no country immune. As cities and countries were forced to shutter businesses, we became a world of recluses, sheltering in our homes and hoping the virus would pass us by unscathed. With any luck, our prayers have been answered and the worst is over. We’ve been through much with changes now firmly etched in our society. There have been changes for the worse, for the better and for the future. •

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