The U.S. Treasury Department has created a program called the Small Business Lending Fund (SBLF) that is a dedicated investment fund that encourages lending to small businesses.  The Treasury Department has asked us to help spread the word about the existence of this program. They are very anxious to help qualified businesses grow through additional financing.

AmeriServ® is the designated bank in our region for this program and the contact person is Denise Quinn.  In talking with Denise, she wanted to emphasize that this is not a SBA-type loan, but rather a loan specifically with AmeriServ. The bank will look at all of the normal issues involved in providing a loan and will determine an appropriate rate of interest, though we are told that AmeriServ is taking a very aggressive approach to getting these funds to qualified businesses.

Qualifying is very easy. Applicants must be a for-profit business. Funds can be used for new money, refinancing of equipment loans, lines of credit, or real estate loans. The only item disqualified is investment real estate.  If you would like additional information please contact: Denise Quinn, direct at 814.533.5442; or through email at dquinn@ameriserv.com.

If interested, contact IMC at 800-326-9467. Submissions are due by COB May 21, 2012.

DOT ITEM OPPORTUNITY SYNOPSIS:  Federal Highway Administration

Item Designation and Description:

16-inch diameter motor brake, 340lb-weight

13-inch diameter machinery brake, 251lb weight                                                                          

Transportation System Application: 

Moveable Highway Bridge; Vertical Lift Bridge with a lift span of 200 feet that rises 75 feet for a total clearance of 135 feet high tide

Item Class:  Mechanical and electromechanical iron and steel components

Item Material(s):   Iron and steel components of Motor and Machinery brakes

Item Size:  16” diameter motor brakes, 340lb weight.  13” diameter machinery brakes, 251lb weight

Required Tolerances:

• Brakes shall be spring-set, thruster-reversed, shoe-type brakes with corrosion-resisting fittings
• Thruster motor shall be with built in adjustable time delays for setting; 460 volt, 3-phase, 60 Hertz squirrel cage motor
• Each of the machinery brakes shall be factory set at 4500 feet-pound intermittent
• Motor brakes shall be factory set at 600 foot-pounds intermittent

Likely Manufacturing Processes: 

The manufacture of these items involves metal working, including for the item casings, disks, shafts, etc., as well as electromechanical applications associated with the item brakes.  Metalworking processes may include machining, including finishing processes; and possibly also casting, forming, and joining. 

Technical Data Summary:

• The motor and machinery brakes are used for vertical lift of bridge span to provide a clearance of 135 feet for marine use of the waterways. Bridge design was in accordance with the AASHTO LRFD Moveable Highway Bridge Design specifications.
• The estimated design life of these structures is 75-100 years and in many cases, the actual recorded service life may be in the range of 75 – 160 years.
• The design of the bridge mechanical systems is unique to each structure.  This is dependent on the type of moveable structure, the span length, bridge geometry and a number of other factors.  Thus the braking system will generally be designed to the unique characteristics of that structure.   The bearings, gears, gear reducers, motor brakes, machinery brakes, etc.  are very unique mechanical components that are integrated into the design of specific structures.
• Items must be factory manufactured and calibrated to specific size, capacity, and torque.

Potential Future Procurement:

• There are 839 known moveable bridges in the U.S., and many of these are in the planning stages for rehabilitation and would require motor and machinery brake replacements.
• FHWA previously approved Buy America waivers for motor/machinery brakes for:  Florida DOT 2008 and 2010,

North Carolina DOT 2008, New York State DOT 2008, Illinois 2011

• Some public agencies may elect to replace the moveable bridge with a high level fixed-span structure when considering rehabilitation or replacement options.   The cost of operating a moveable bridge is very high compared to the operational / maintenance costs of other structure types.
• In some instances, public agencies may consider replacing the existing braking systems with hydraulic brakes if appropriate.
• The cost of the mechanical and brake systems may exceed the 0.1% of contract value Buy America threshold but are relatively low in comparison with other bridge construction costs (sample costs are included below).
• The lead-time for manufacturing and furnishing the mechanical system components for movable bridges is frequently very short.  Many of these bridges are in urban locations and the construction contracts typically are on an accelerated schedule.

May 8, 2012
Orlando, Florida
Orlando World Center
Event Contact:  Carroll Thomas Martin - carroll.thomasmartin@nist.gov - (301) 975-5031

The U.S. Department of Transportation (DOT) and U.S. Department of Commerce
(DOC) recently formed a partnership to leverage agency capabilities to ensure the
development of a domestic supply base to support intermodal transportation in
the United States.

The objective of the Forum is to attract U.S. manufacturers to the supply base for
next generation rail equipment being procured in the U.S. The Forum will facilitate
connections between rail industry Original Equipment Manufacturers (OEMs) and
both traditional and non-traditional rail suppliers.

Visit www.MI2012.MEPEVENTS.com for more information.

ABOUT THE FORUM

The Forum brings large carbuilders together with smaller, capable and interested U.S. manufacturers to facilitate reaching the goal of 100% domestic content in railcars that will be publicly funded. The Forum provides a venue for smaller manufacturers to learn what products are needed and find out more about investments they need to consider when entering the rail industry. Key stakeholders that will participate include:

• Government agencies (U.S. DOT, state transportation, and local economic
development agencies) and rail service operators that will be the public
investors in the procurement and operation of next generation U.S. rail
equipment, and that will be driving for 100% domestic content;
• Rail carbuilders, locomotive manufacturers and Tier 1 suppliers that will be
delivering next generation rail equipment for service in the U.S.;
• All size U.S. manufacturers who can potentially be suppliers, including
manufacturers who currently supply to the rail industry, as well as those that
do not, but could; and
• The DOC/NIST Manufacturing Extension Partnership (MEP) – a federal/
state/private partnership operating in all 50 states that will serve to connect
U.S. manufacturers with supply opportunities, and provide assistance to
manufacturers as appropriate.

MEP clients, utilizing ASMC’s UPS Freight Savings Program, are beginning to save substantial money on shipping.

In February clients that would have incurred $25,000 worth of shipping costs, ended up paying only a little more than $4,000 to ship their products through the UPS Freight Saving Program. These “Friends of the MEP” received a minimum 70% discount on UPS Freight LTL (Less-Than-Truckload) services.

If you are a client that would like to save through the UPS Freight Savings Program,  simply become a “Friend of MEP” by signing up here.

As a Friend of MEP, the UPS Freight Savings program will offer free enrollment with no fees or minimum shipping requirement.

If you would like more information about the program, please contact Kelly Pearl.

Historically low electricity and natural gas prices are making headlines, but what lies ahead for theUnited Statesenergy market? In this two-part series, we’ll describe the factors impacting electricity and natural gas prices nationwide. Electricity prices closely track natural gas prices, but the two are not completely synchronized. And, natural gas is used to generate a significant portion of the electricity consumed in theUnited States.

What determines electricity prices?

Electricity prices change constantly—literally every five minutes, every day. A multitude of factors affect prices, some modestly, some dramatically. Some factors have a short term impact while others are long lasting. For example, weather conditions, natural disasters, and consumer demand influence electricity prices from one day to the next. Legislation, regulatory changes, generation efficiency, and electricity grid and infrastructure costs impact electricity prices on a long-term basis. Commodity investors and speculators have been a dominant force in electricity pricing. Remember in 2008 when oil prices were at $140 per barrel? Electricity prices peaked then, as well.

Disasters. In 2005, the hurricane season produced destructive storms, most notably Rita and Katrina, and the cost of electricity skyrocketed. Since 2005, hurricane seasons have remained relatively calm and had minimal influence on electricity prices. Of course, hurricanes, earthquakes, winter storms, and other major weather events cause price volatility.

In addition to causing prices to spike, natural disasters have ripple effects through the energy industry. For example, when an earthquake and tsunami devastatedJapanin 2011, a nuclear meltdown ensued at Fukushima Daiichi Nuclear Power Station. In theUnited States, the Nuclear Regulatory Commission reviewed the ability of domestic nuclear reactors to withstand natural disasters. As a result, several nuclear facilities were taken offline, and some new nuclear projects were abandoned at substantial economic loss to facility owners and local communities.

Disasters are felt on a political and governmental level too. Democrats and Republicans often disagree in response to disasters, such as theFukushimanuclear meltdown and the BP oil spill in theGulf of Mexico. This causes delayed responses and additional costs to consumers. A bipartisan approach is needed to implement a national energy plan.

Legislation/Regulations. A cohesive, harmonious energy strategy between government and the private sector on a nationwide level is pivotal for theU.S. to advance its energy markets. The Smart Energy Act of 2012 (H.R. 4017) and the Environmental Protection Agency’s Cross-state Air Pollution Rule both demonstrate the need for bipartisan legislation. Prudent regulatory measures must be developed and set into play to enhance growth and address environmental concerns. In the next decade, electricity pricing will continue to be affected by energy efficiency standards and power plant emissions restrictions. Opportunities exist for innovations and the creation of new products and services to meet these challenges.

Infrastructure. Who will pay for smart technology and necessary upgrades to our grid systems? Comprised of millions of individual meters and thousands of local networks, our electricity infrastructure is expensive, challenging to maintain, and rapidly aging. Trillions of dollars must be invested nationally in the next few decades to upgrade from the current infrastructure to a modernized, fully interactive, self-healing Smart Grid. As utilities are required to rebuild transmission systems to ensure reliable delivery of electricity to homes and businesses, consumers will see electricity delivery costs rise to cover necessary expenditures. Just a few of many needed upgrades include reclosers, capacitor banks, voltage regulators, automated switches, smart meters, substation transformer monitors, distribution management system platforms, volt/VAR optimization applications, and fault location, isolation, and service restoration applications. Some utilities are spending tens of millions per year. While federal stimulus funds have been issued to some utilities for upgrades, most utilities will continually increase delivery tariff rates to cover costs.

Environmental effects. The environmental consequences of coal mining, gas drilling, and power plant emissions affect electricity prices. In February 2012, the Nuclear Regulatory Committee approved two new nuclear power reactors for the first time in the USA since the partial meltdown at Pennsylvania’s Three Mile Island plant in 1979. Green or renewable generation, including solar, wind, and hydro, continues to slowly grow. Most of our nation’s electricity is generated from coal-burning power plants. The EPA has cracked down on air pollution, imposing strict limits on environmental emissions from coal-burning plants. (See how the EPA’s Cross-state Air Pollution Rule impacts power plants.)

Meanwhile, natural gas-fired power plants are less expensive to build and often less expensive to operate than coal-burning plants. In the last 5 years, natural gas drillers have produced an abundance of shale gas, which is now in storage and ready to be consumed. (See the impacts of gas drilling in PA.) As electricity prices plummet, more power plants convert from coal to natural gas for electricity generation. Lower electricity prices also have the effect of slowing implementation of renewable generation because the costs of installing a green system remain high relative to the cost of traditional electricity.

Weather. Across most of theU.S., the 2011-2012 winter season was exceptionally mild. Demand decreased for electricity to heat homes and businesses as outdoor temperatures were several degrees above normal. Lower demand pushed prices down. In situations when winter weather causes an increase in heating demand, electricity prices tick up.

In the summer of 2011, record high temperatures plagued parts of the U.S. Texas was particularly hard hit. Hot weather significantly increases electricity demand as consumers operate HVAC units to cool homes, churches, schools, businesses, and other buildings. The summer is when consumers participating in Demand Response programs are most likely to be notified to reduce consumption during peak usage periods. At peak times, the grid system can become overwhelmed by consumer demand, which causes electricity prices to drastically climb and be extremely volatile.

Consumer demand.  Ultimately, electricity prices are affected most by the amount of consumer usage, and the time of day and season that electrons are consumed. Every day, grid systems across theU.S. work constantly to provide reliable supply to all consumers. Imagine the ever-increasing demand for electricity for schools, institutions, individuals, businesses, government, and other consumers. It makes sense that electricity prices are highest during times of peak demand in the late afternoon, and lowest overnight when demand drops. In any case, usage is likely to steadily increase.

Coming soon… Energy Outlook, Part 2: What affects natural gas prices?

About the author

Michael S. Payne, JD, LLM, is Executive Vice President & Corporate Counsel of Affiliated Power Purchasers International LLC (APPI Energy), an independent consulting firm that is endorsed by 140 affinity groups. Since 1996, APPI Energy has assisted more than 3,300 organizations with locations across the United States to reduce and manage energy costs. For unbiased advice, at no upfront cost to you, contact APPI Energy at 800-520-6685.

Untapped natural gas lies in the Marcellus Shale beneath portions of Ohio, Maryland, New York, West Virginia, and Pennsylvania. In the last 5 years, natural gas drillers have flocked to this region, particularly western PA, to extract gas from the Marcellus Shale’s black sedimentary rock.

Drilling in the Marcellus Shale region has profoundly increased since 2008 because of regulatory changes and hydraulic fracturing—also known as fracking or hydrofracking—a process during which a mixture of highly pressurized water, sand, and chemicals is injected into rock, releasing shale gas and forcing it upward. This practice, combined with a horizontal drilling technique, enables drillers to extract a massive amount of shale gas that was previously unreachable.

Pros

Low energy prices. The Marcellus Shale is comprised of enough gas to help theUnited States achieve independence from foreign energy, including the troubled Middle East for its oil. The amount of natural gas in storage by the end of March 2012 is expected to be the highest since 1983. Consequentially, the abundance of ready-to-be-shipped natural gas in storage and the extensive reserves now accessible have driven down the market price to a 9-year historical low.

In 2008, the average price for a Dekatherm of natural gas was $8. The price dropped to $5.50 in 2010 and now has declined to $2.50. (See an energy market snapshot graph.)

Market forecasts are that natural gas prices will remain low for several years. The number of active drilling rigs is declining as prices have dropped. And, there is an immense amount of natural gas in storage. These factors are helping to keep a lid on prices. (See how to benefit from historically low energy prices.)

All of this is occurring while oil prices have steadily increased during the past year, recently eclipsing $100 per barrel. Oil prices are not linked to natural gas prices in any direct way. However, some industrial and other large energy consumers will convert usage of oil to natural gas if these price levels hold.

Economic growth. Forty drilling companies are currently leasing land inPennsylvania and have invested more than $4 billion in land acquisition, new wells, infrastructure development, and community partnerships. Pittsburgh is the largest city atop the Marcellus Shale formation, but most Pennsylvanian communities with access to shale gas are quiet rural towns with no previous exposure to drilling. In communities where drilling companies are extracting natural gas, local economies are flourishing. Landowners are profiting, job opportunities are increasing, and local governments are considering implementing an “impact fee” to raise community revenue from drilling companies.

Jobs. Recent projections are that over 200,000 new jobs will be created by 2020 from Marcellus Shale drilling. In 2011, one ofPennsylvania’s poorest areas, rural Bradford County, led the state in job creation. “We’re not impacted by the recession at all,” says Gregg Murrelle, a hotel manager in the Bradford County seat who leased the land around his properties for drilling.

Drilling companies are just one piece of the puzzle. Existing businesses in the hotel and restaurant industries are adding employees. Local truck drivers and construction contractors are seizing opportunities. Law and engineering firms are hiring experts in oil and gas development and regulatory matters. Specialized insurance agents are needed. Environmental inspectors are required to monitor and enforce laws that protect air, land, and water. The list goes on.

Cons

Drilling opponents have voiced complaints about fracking and taken actions to slow it down. The fracking process creates extremely high water pressure underground, which could trigger tremors and earthquakes. Horizontal wells require as much as 5 million gallons of water for fracking. After the fracking process is complete, wellbore pressure is released and water flows out of the wells. Backflow and the threat of spills and downhill leaks are causing concerns.

Fracking backflow. Drilling companies are not required to disclose which chemicals are mixed with fresh water for fracking, which raises alarm over water pollution. Fracking additives could be as harmless as household chemicals or as harmful as toxic ingredients. Even if chemicals makeup only 0.5% of 5 million gallons of water used for one horizontal well, that amounts to 250,000 gallons of unknown chemicals. Plus, when fluid mixes with shale rock it becomes brackish and could become contaminated with radioactivity. “You bring everything the fluid encounters down there back to the surface along with the gas,” comments Michel Boufadel, an environmental engineer at Temple University in Philadelphia.

Leaks. Drilling companies must securely cement wells to prevent leaks. In December 2010, a major oil and gas business paid a $4.1 million settlement to the Pennsylvania Department of Environmental Protection (DEP) and 19 families in Dimock, Pennsylvania, whose water was tainted with methane because of poor cementing around well castings.

On farmland outside of Wellsboro, Pennsylvania, 75-year-old Don Johnson, who has lived in the area his entire life, was forced to quarantine his livestock in the summer of 2010 after his cows drank from a pond with a suspected wastewater leak. “They affected the water, and without water you can’t farm here and you can’t live here,” says Johnson. The DEP also fined one major energy company $565,000 for violating rules protecting streams and wetlands in Potter and Bradford counties. Some of these violations were administrative, such as improper signage or paperwork.

Clean choice

Despite relevant concerns over natural gas drilling, coal mining will always be more harmful to the environment. Coal mining uses 5 times more water than natural gas drilling and permanently changes the terrain and environment in the area around the mine. The burning of coal causes many air pollutants and some experts argue it is primarily responsible for climate change. Thousands of people die worldwide each year from coal mining operations, and toxic emissions from coal-burning power plants cause thousands of premature deaths each year in the United States. (See the health effects on residents in states downwind from power plant emissions.)

Solutions

Backflow water from fracking is pumped into wastewater holding ponds and storage areas for transport to water treatment plants for recycling. Chesapeake Energy, the second-largest natural gas producer in theUnited States, asserts that it recycles 100% of fracking wastewater to reuse in additional wells. Pennsylvania is tightening its regulations for screening wastewater at municipal treatment plants, and an increasing amount of wastewater is now being reused for additional fracking.

In September 2011, the U.S. Environmental Protection Agency launched a probe to analyze the impact of drilling on air, land, and water in Washington County, Pennsylvania. “While natural gas operators employ various safeguards to minimize the risks inherent to the industry, legitimate concerns have emerged regarding potential environmental impacts,” says Bonnie Smith, EPA spokeswoman.

A step in the right direction is for the gas industry to continue improving its level of recycling wastewater, and to identify the chemicals used for fracking. Technologies that can capture and clean wastewater at the wellhead would be a valuable innovation, as well. In the meantime, fracking wells could be completely prohibited or dramatically restricted in dense population areas like Pittsburgh and the New York City watershed, where real and potential environmental/human concerns are simply too high compared to the benefits of drilling.

Bountiful forecast

How bountiful is the Marcellus Shale? Reports vary. Investors, academia, politicians, energy companies, and government agencies are just a few of many industry experts who track the shale gas market and provide evaluations and predictions.

Experts have declared that enough natural gas is in the Marcellus Shale to fully meet the energy demand for the entire United States for as few as  6 years and as many as 100 years. Regardless of whether the Marcellus Shale contains 141 trillion cubic feet or 410 trillion cubic feet of natural gas, experts predict that 49% of energy will be generated by shale gas by 2035. By 2016, the United States will most likely become a net exporter of liquefied natural gas.

Much of the Marcellus Shale, which is thousands of feet below the earth’s surface, remains untested for long-term productivity. More than 2,400 wells were drilled between 2006 and 2011 in the Marcellus Shale region. As fracking continues, more information will be revealed about accessibility and environmental consequences. Future technological innovations could improve accessibility and increase productivity. Forecasts will evolve as all of these factors come into play.

Shale locations

In addition to the Marcellus Shale region, shale formations in the United States include the Barnett Shale in Texas, the Woodford Shale in Oklahoma, the Fayetteville Shale in Arkansas, the Haynesville Shale in Louisiana, and the Antrim Shale in Michigan, Ohio, and Indiana. Shale formations in China, India, Britain, and Eastern Europe countries provide potential natural gas resources, as well.

Related Articles

http://www.time.com/time/magazine/article/0,9171,2062456,00.html

http://www.nytimes.com/2012/01/29/us/new-data-not-so-sunny-on-us-natural-gas-supply.html?pagewanted=all

http://marcellusdrilling.com/2012/02/chesapeakes-fracking-wastewater-treatment-technology/

http://articles.boston.com/2012-02-12/news/31052690_1_low-prices-natural-gas-marcellus-shale-coalition

http://marcellusdrilling.com/2012/02/epa-investigation-launched-in-washington-county-pa/

About the author

Kathy Kiernan is senior vice president of Affiliated Power Purchasers International LLC (APPI Energy), a team of energy experts that is endorsed by the American Society of Association Executives and 140 affinity groups. Since 1996, APPI Energy has assisted more than 3,300 organizations with locations across the United States to reduce operations expenses. To learn more, contact 800-520-6685, info@appienergy.com, or www.appienergy.com.

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