KEYSTONE XL FEBRUARY 2013

ENVIRONMENTALISTS AND BIG OIL NEED TO TALK

Big oil is big because we made them that way,you,me them,us,him,her, all of us,we are big oil , our demand and their proprietary efficiency created big oil,but how else can we consume fourteen million barrels per day without big oil.Even when we complain about the high price at the pump all thirty seven countries in the European Union have higher prices than us.When we pay four dollars per gallon, most of Europe pays six.Regardless of why most Europeans pay twenty to thirty three percent more than we do.

Keystone XL oil pipeline between Alberta, Canada and the gulf coast of Texas where the big refineries are, is close to seventeen hundred miles and goes through parts of eight different states. We are talking about eight hundred fifty thousand barrels per day,that is a lot.If the thirty day spot price is above sixty five dollars than it is worth it for big oil to extract it,pipe it,and refine it.

Environmentalists have to understand that the oil from the Black Sands of Alberta is needed,this is not a desire but an absolute necessity,at current consumption levels,five years from now we will be consuming fifteen million barrels per day,all of would like to lessen our dependency on foreign oil,especially with countries where the political stability and friendship is a coin toss.The only plans that were made public had thirteen different starting points in the lower forty eight,you are talking about tens of thousands of jobs,many of these jobs are good paying jobs, not part time food service wages. A construction job of this size will need many different experts,heavy equipment operators,CDL drivers,welders,pipe fitters,bridge builders,tunnel builders,and two dozen more experts.Any CDL driver or heavy equipment operator that leaves a job to go to work on the pipeline creates an opening from the job he left,that has to be filled by an (OJT) (on-the-job) person or a graduate from a heavy equipment school,and this will apply to thousands of employees,it has been estimated that this pipeline will create between one hundred fifty and two hundred thousand new jobs.

It is going to take at least four years to complete this project,but that is a rosy estimate,others have said it could be six or seven years to finish.Regardless of how long it takes to finish we are going to need the oil than just as bad as we need it now,so the environmentalists and big oil need to talk.

Late-Year Surge in Construction Employment Fuels Optimism for 2013

Construction employment expanded in two-thirds of all U.S. states in December and in half the nation last year as the industry showed signs of emerging from a six-year slump, according to an analysis by the Associated General Contractors of America of Labor Department data. Association officials noted that contractors responding to a recent survey expect to add more workers in 2013.

“These results show that contractors are finding work in more parts of the country than they have for many months,” said Ken Simonson, the association’s chief economist. “Further gains appear likely but could be derailed if lawmakers do not keep debt markets operating normally.”

For 2012 as a whole, 24 states and the District of Columbia added construction jobs, 24 shed workers and two — Vermont and West Virginia — had no change. Nebraska jumped to the top ranking for percentage of new construction jobs (10.1 percent, 4,100 jobs); followed by D.C. (7.3 percent, 900 jobs); Texas (6.6 percent, 36,800 jobs); Hawaii (6.5 percent, 1,800 jobs) and Washington (6.5 percent, 9,000 jobs). Texas added the most new construction jobs over the past 12 months, followed by California (24,500 jobs, 4.4 percent), Washington and Arizona.

Among states losing construction jobs during the past year, Rhode Island lost the highest percentage (-6.7 percent, -1,100 jobs), followed by Delaware (-5.8 percent, -1,100 jobs); Mississippi (-5.6 percent, -2,700 jobs) and Arkansas (-5.6 percent, -2,600 jobs). Illinois lost the most jobs (-8,600 jobs, -4.5 percent); followed by Pennsylvania (-7,700 jobs, -3.4 percent) and Florida (-16,800 jobs, -2.1 percent).

Simonson noted that 33 states and D.C. added construction jobs between November and December, while employment slipped in 16 states and held steady in Utah. Wisconsin had the largest percentage increase (5.8 percent, 4,900 jobs); followed by D.C. (3.9 percent, 500 jobs) and New Jersey (3.6 percent, 4,300 jobs). Utah had no change in construction employment over the month, while 16 states lost jobs, with Rhode Island having the steepest percentage drop (-5.6 percent, -900 jobs); followed by Montana (-4.1 percent, 1,000 jobs) and Minnesota (-3.6 percent, 3,500 jobs). Texas lost the largest number of jobs for the month (-4,100 jobs, -0.7 percent); followed by Florida (-3.500 jobs, -1.1 percent) and Minnesota.

“Construction spending has been rising for two full years but contractors have been cautious about adding workers until they knew the upturn would last,” Simonson said. “In 2013, both residential and private nonresidential construction should rise enough to offset a further slowdown in public work, and contractors will be looking for more workers.”

Association officials said the monthly construction employment gains were consistent with results of its recently released 2013 Construction Hiring and Business Outlook, where 31 percent of firms reported plans to add new workers this year compared to only 9 percent that plan to make layoffs, a net positive reading of 22 percent. Officials cautioned that construction firms still face significant headwinds, noting that most firms expect public construction activity to continue to decline and remain cautious about plans to acquire new equipment.

“There is a growing sense of optimism within the construction community that the worst is over,” said Stephen Sandherr, the association’s CEO. “At the same time, however, just because the worst is over doesn’t guarantee that conditions are going to get significantly better anytime soon, especially if Washington can’t find a way to address out-of-control entitlement spending that is making it increasingly difficult to invest in aging infrastructure and other important construction programs."

Charlotte-area construction employment up 2%

The Charlotte area was a bright spot for construction-industry employment in the Carolinas over the past year, according to a report released by the Associated General Contractors of America.

The number of construction, mining and logging jobs in the Charlotte-Gastonia-Rock Hill metro increased 2 percent in the 12 months that ended in November, with 700 workers added to payrolls during that time, the report shows. The area’s total employment in the sector stood at 39,300 as of November.

However, the rest of the Carolinas continued to look for recovery.

In North Carolina, employment in the construction, mining and logging industries totaled 185,400 in November, down 5,200 jobs or 3 percent from November 2011. The same sector in South Carolina lost 700 jobs, or 1 percent of its work force, for a total of 79,100 industry workers at the end of the period. Each of the individual metro areas in the Carolinas that were listed in the report lost jobs during the year, with the exception of Hickory-Lenoir-Morganton, which remained flat, and Charlotte.

Nationwide, construction employment declined in 151 of 337 metro areas between November 2011 and the same month of last year, according to the AGC. Such employment increased in 126 metro areas and was stagnant in 60, the AGC says.

“The uncertainty about 2013 federal tax and spending rates likely prompted firms in many parts of the country to hold back on hiring,” the association’s chief economist, Ken Simonson, says in the report. “Construction workers in the New York area, meanwhile, suffered as existing projects were put on hold in the weeks following Hurricane Sandy.”

Construction Employment Starting to Rebound

Though payrolls came in just below expectations, one positive take away from this morning’s data was the 30 thousand increase in construction jobs. Almost all of the increase was in residential. These are relatively well paying jobs compared to retail clerks, waiters, bartenders, and health care workers, which have led the payrolls recovery.

We’ll take 30K construction jobs over 40K retail clerk jobs. Quality matters.

The huge run in lumber futures has been signalling the nascent housing recovery and the exordium of construction hiring. Increased demand from the U.S. housing sector and China’s rebound, coupled with reduced timber production in Russia have driven lumber futures to a seven year high. This is real time leading indicator, similar to Dr. Copper, that should be on your radar.

Nevertheless, total employment in construction is still 2.2 million less than where it was at its April 2006 peak. It is one of the few sectors that has yet fully regain the jobs lost in the Great Recession.

We doubt the sector will be building the equivalent of a Cleveland, Ohio every few years as it was at the height of the bubble, but here’s to hoping the recovery in construction hiring is just beginning. !

The Great Construction Employment Mystery

Over at the Atlantic, Matthew O’Brien canvasses the blogosphere’s chart lovers to compile a list of the 34 best economic charts of the year. It’s worth a look at the whole list, but the chart I want to highlight is from Conor Sen. Here it is:

That’s damn peculiar, isn’t it? How is it that housing starts can increase steeply starting in 2011 but construction employment continues to decline? That’s the kind of thing that happens when you build a factory where robots do all the work that people used to do, but nothing like that has happened in the construction industry. Houses today are built pretty much the same way they were a decade ago: with human hands.

So what’s going on? A few months ago the Fiscal Times asked some construction industry experts about this, and they got three answers. First, the increase in housing starts hasn’t been big enough yet. Second, you have to wait a while for all the "finishers" (painters, paper hangers, tile workers, etc.) to be brought on board. Third, most of the work is in apartment buildings, which require fewer workers per unit than houses.

Answer #1 doesn’t hold water. Since the beginning of last year, housing starts have nearly doubled. That’s a lot. Answer #2 is similarly unsatisfying. Housing starts began their upward climb more than 18 months ago. That’s plenty of time to get to the finishing work. So how about Answer #3? Here’s a chart that breaks apart single-unit and multi-unit starts:

Hmmm. Single-unit structures are up by 200,000 and multi-unit starts are also up by about 200,000. The share of multi-unit starts has gone up from about 25 percent to 33 percent, but that’s not much, really. Certainly nowhere near enough to account for a decline in construction jobs. Besides, an apartment building appears to count as a single housing start, and a single apartment building requires more workers than a single house. A rising share of multi-unit starts should accelerate construction employment, not hold it back.

So what’s the answer? My guess is that it’s a statistical artifact of some kind. Something isn’t being counted right here. It’s possible that the construction industry has gotten more efficient in certain ways, but it hasn’t gotten that much more efficient. If housing starts have doubled, then one way or another, construction employment must be up too.

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