Shale Boom Continues To Drive New Pipeline Construction

U.S. Pipeline Construction Outlook
By Rita Tubb, Managing Editor | May 2012, Vol. 239 No. 5

In an interview with Pipeline & Gas Journal, David Sheehan, chairman of Tulsa-based Sheehan Pipe Line Construction Company, the nation’s oldest pipeline construction firm, offered his perspective on the impact of the shale boom on near-term pipeline construction, what is needed to reassure the public that shale development is safe and the possibility of future restrictive environmental regulations.

P&GJ: What are some of rewards and challenges that the shale boom has brought to the pipeline industry?
Sheehan:
Without the shale boom, construction work would have been very depressed. Work in 2007 through 2010 reached record levels. In fact, it was a great challenge to assemble enough manpower to complete all the work planned on an acceptable timetable. From 2012 on, the work should be steady and at a healthy level for the construction industry. The challenge is for our nation to decide to use this resource optimally in our economy.

P&GJ: Do you think a lack of pipeline transportation capacity in shale basins is hindering U.S. development? If so, in what area, or areas, do you see the greatest need for new large-diameter infrastructure and gathering lines?
Sheehan:
Yes, particularly in the Bakken and Eagle Ford basins. The Marcellus area is being handled but has experienced some constriction capacity.

P&GJ: What do you feel is needed to reassure the public and regulators that shale development is safe?
Sheehan:
Continued research and impartial studies will provide the facts. But the industry has to come together and present a clear, justifiable response to some of the criticism. Every energy source has its problems. Natural gas represents a very viable answer to both clean and cheap energy.

P&GJ: What do you consider the most pressing environmental issue for the pipeline construction industry?
Sheehan:
We are very environmentally conscious now and the industry has responded positively to all legal requirements and has gone beyond that and is socially accountable in all the various aspects of environmental responsibility.

P&GJ: Do you foresee future changes in Washington that could hamper pipeline construction activity in the near-term?
Sheehan:
Other than the Keystone construction, we do not believe that Washington will change its current politics toward the energy industry that much.

P&GJ: Do you see major changes looming in the way the pipeline construction industry operates?
Sheehan:
Not at present, but this is a dynamic industry and also history tells us that changes occur regularly over time.

P&GJ: There continues to be much written about the potential dangers of hydraulic fracturing. Do you foresee new laws or regulations being enacted in the near-term related to hydraulic fracturing?
Sheehan:
There is a very good possibility that the EPA, under President Obama’s guidance, will issue more restrictive regulations despite the fact that the states are better suited to regulate the process and there is no evidence of damage proves that the dangers that are being charged against it are false. Better construction and well completion techniques can eliminate the current problems.

P&GJ: Is there any indication as to where the greatest amount of new North American pipeline construction will be located?
Sheehan:
Marcellus, Utica, and Eagle Ford are the main areas. There will be more build-out to supply new natural gas power plants, particularly in the East and South.

P&GJ: Assuming a sharp rise in pipeline construction, do you think there are a sufficient number of crews to handle an upturn in activity?
Sheehan:
Although I do not see “a sharp rise” in pipeline construction, 2008 through 2010 shows us that we can handle the increases as they occur.

P&GJ: Briefly tell us about your role at Sheehan and your background.
Sheehan:
Currently I serve as Chairman of the Board, assisting Rob Riess, who is president and CEO, in managing the company. I have over 45 years of experience in the industry.