Let’s wade into politics for a moment. Don’t worry. I don’t have a soapbox, so there’ll be no climbing up on it. But, I think there’s a lot of room to talk about President Donald J. Trump, what he means for drillers in general and, in particular, the foundations and geotechnical sectors of National Driller’s audience. Infrastructure is the big thing, so let’s start there.
His plan calls for turning crumbling infrastructure in the United States into “a golden opportunity for accelerated economic growth.” The funding mechanism for that plan is public-private partnerships. That is, companies would be offered incentives to spend their money on projects, thus creating jobs. This might take the form of tax credits, for example. Or it could have ties to the specific project, like a company shouldering the costs of a stretch of highway and recovering that cost over time through tolls.
The details of his plans aren’t yet clear and the price tag of the final package ranges from $500 billion to $1 trillion. That’s quite a range. Trump’s website does say the plan, whatever its final shape and price tag, will be “deficit-neutral.”
What does this all this mean for drillers in geotech and foundations? I don’t think where the money to hire contractors comes from matters much to those contractors and subcontractors. The fact that money circulates for those projects is key. On balance, any infrastructure spending will make work for construction and pre-construction people. That’s a good thing.
The flipside is that the infrastructure plan doesn’t appear to be on the first 100 days agenda. That means debate in Congress will stretch into the summer, and that any meaningful spending won’t get allocated until the start of the 2018 construction season.
One oft-cited criticism of the outgoing administration is the weight of regulations. That’s fair in some areas. Trump’s administration has vowed to spend less time analyzing infrastructure issues and more time fixing them. National Driller applauds that sentiment — to a point. Yes, getting results and speeding permitting are good things. But, as our soil and water sampling friends in geotech will attest, if we don’t consider the environment in project planning, the environment has ways of forcing our attention.
I often read about the tens of thousands of bridges in the U.S. we can label “structurally deficient.” That’s, frankly, horrifying. But rushing on a complex project like a bridge just to say you’re doing something, without knowing for sure the underlying earth will support it, doesn’t sound like a sensible use of resources to me. Any time drilling contractors are deployed and employed on infrastructure projects, those projects need to be engineered and properly permitted to ensure that those folks can be proud of the work they do.
Regulations add weight to any infrastructure project and, in the end, cost taxpayers money and slow the results. That’s not in doubt. The success of any infrastructure plan, however, and the long-term viability of the results, depends on the sensible regulation. What does sensible regulation look like? Sensible regulation and permitting don’t prevent people from working (safely) and ensure that $1 billion spent on infrastructure projects provides a good, long-lasting value for taxpayers. If the Trump administration effectively walks that line, the construction drilling industry and the country benefit.
Leading from the Gut
The economy is, in many ways, a confidence game. A lot of smart economists study how everything works, and they have a lot of valid ways of looking at things. But I think there’s always some intangible “gut” factor in whether we grow or shrink as a country. Setting aside specific policies that may have helped economically (like the auto bailout), the outgoing administration never seemed to reinforce that gut feeling for growth for a lot of people.
Regardless of your political stripe, I think we can all agree that “gut” is a Trump strong point. This may help our economic confidence. If, for example, the companies that make rigs and bits and tooling feel confident in an upturn in infrastructure spending because of Trump, they’ll ramp up to meet it.
For Trump, though, I think the drawback comes in the specifics. It’s fair to say he can’t resist getting into nitty-gritty details. Let me paint a plausible scenario. A major infrastructure engineering firm, which happens to be publicly held, gets a multimillion-dollar project through a Trump stimulus plan and subcontracts drillers to get some of the work done. Everything’s proceeding fine until the CEO speaks candidly to a local reporter one day. His comments get interpreted as criticism and one tweet later the company’s stock goes into the toilet. Suppliers and subcontractors start to pull back now that the CEO and his company are toxic, and the project falls apart in a flurry of lawsuits and bankruptcies.
Leading from the gut is fine. A little restraint and measuredness, however, will go a long way. It’s undoubtedly a spectacle to watch Trump make companies squirm. But it would be less fun if it were your company or the project that’s putting food on your table on the receiving end of a negative tweet.
Broadly speaking, if Trump succeeds in rallying Congress and the American people around a major infrastructure plan, we all win. He and the GOP Congress will shape it in a way that minimizes tax outlays. The contracts will spur construction jobs for contractors in foundations and geotech. People who drive on the nation’s roads and bridges will get a smoother ride. But, with his administration just a few days old and a big infrastructure plan months off, the construction industry has to take a wait-and-see approach.
What do you think? Are you confident in a “Trump effect” for the U.S. economy? Or do you worry that Trump’s trademark gut-instinct leadership won’t get the infrastructure job done? Email your thoughts to email@example.com.
Stay safe out there, drillers.