A New Year Dawns - Part 2

Sept. 28, 2010

In the Jan. 14 issue we offered our forecast of the dollar volume of construction in Mountain America during the year ahead, plus a look at what may reasonably be expected in the various segments of construction. We also provided a look at some of the significant projects that will be undertaken during the year. Following is a further look at some of those projects, which serve to illustrate that this should prove to be another good year, if not a great one, for most construction categories.

In the Jan. 14 issue we offered our forecast of the dollar volume of construction in Mountain America during the year ahead, plus a look at what may reasonably be expected in the various segments of construction. We also provided a look at some of the significant projects that will be undertaken during the year. Following is a further look at some of those projects, which serve to illustrate that this should prove to be another good year, if not a great one, for most construction categories.

Early Start For Denver Light Rail Line Should Save Millions

Denver — Hard hit by the rising cost of materials and construction, Denver's Regional Transportation District is accelerating purchases and the start of bridge construction on the $634-million West Corridor light rail line from Denver to Golden in an attempt to stave off an estimated $2.73 million in further increases that would accrue by waiting. The project is not due to go under contract until this summer, but RTD is spending $8.7 million now to buy 4,600 tons to steel rails and 40,000 concrete ties, saving an estimated $230,879, and $29 million to have Denver Transit Construction Group, the joint venture contractor managing the West Corridor project, begin steel fabrication on five bridges and actual construction on three others, saving an estimated $2.5 million. The steel fabrication includes two large structures over the W. Sixth Avenue Freeway (US-6), and the early construction includes the light rail bridge over Kipling Street at W. 13th Avenue.

Salt Lake County Vote Again Backs Rail Transit

West Valley City, Utah — After lengthy debate about the legality of a vote last year to give top priority to funding three rail transit lines with taxpayer-approved dollars, the Salt Lake County Council of Governments recently voted a second time in favor of funding the FrontRunner commuter rail line south into Utah County and two west side TRAX light rail lines. With contractors already selected, locomotives purchased and a $570-million federal funding agreement in place for the FrontRunner line to Provo, the COG members felt it was the only prudent thing to do. "To change course at this particular time is not reasonable," explained South Jordan Mayor W. Kent Money. The original vote over a year ago ranked the rail projects artificially high because of a math error, and the second vote reaffirmed the ranking. As for the Provo line, "We will begin utility work in spring of 2008," said Hugh Johnson, Utah Transit Authority Timpanogos Division regional general manager. "The rail line should be completed to Provo by 2011. It sounds like a long time, but it will go quickly."

Wyoming Issues Permit For Dry Fork Power Plant

Gillette, Wyo. — Much to the dismay of environmentalists, the Wyoming Department of Environmental Quality has issued an emissions permit for the planned Dry Fork Station coal-fired power plant north of Gillette. Within days of permit issuance on Oct. 15, officials of Basin Electric Power Cooperative announced that construction of the $1.3-billion, 385-megawatt plant had gotten underway. Basin has selected Babcock & Wilcox Co., a subsidiary of McDermott International Inc., to supply the combustion boiler and selective catalytic reduction system for the plant, and B&W will procure the majority of the pressure part materials from its joint venture fabrication facility in China, Babcock & Wilcox Beijing Co. Ltd. The $1.3-billion Dry Fork plant is expected to enter service in 2011. Critics complain that the plant will employ outdated technology that fails to capture CO2 emissions that contribute to global warming. Dry Fork, they note, is expected to release 3 million tons of carbon dioxide into the atmosphere during its estimated 40-year life.

Nearby, Black Hills Generation was awaiting final regulatory approval for its coal-fired, 100-megawatt Wygen III and hoped to begin construction of the plant in early 2008 at the Wyodak Energy Complex just east of Gillette. Black & Veatch is program manager for the project.

Permits Delay Coal-Fired Nevada Power Plant

Ely, Nev. — Nevada Power Co. announced recently that its controversial Ely Energy Center, a coal-fired power plant planned for Northern Nevada, will be delayed because of regulatory review. To keep pace with Southern Nevada growth, Nevada Power's parent, Sierra Pacific Resources, said it plans to build a new natural gas-fired power plant first and the Ely project second, pending regulatory approval. The holding company said the decision to delay the controversial coal-fired plant stems from delays in obtaining final approval from the Bureau of Land Management, which controls federal land where the Ely plant is proposed. The BLM office is looking at two other coal-fired projects proposed by independent power developers as well as a pipeline being proposed by the Southern Nevada Water Authority to carry Northern Nevada water to Las Vegas. Because of the delay, the utility company no longer expects to complete the first of two planned 750-megawatt units at Ely by 2011. The company has not set a new deadline for the first unit at Ely. While the power company remains committed to building the Ely coal plant, a spokesman said Nevada Power will need an additional power plant in the meanwhile to keep up with rapid growth in Southern Nevada. To meet those needs, Nevada Power will speed plans to build a 500-megawatt natural gas-fired expansion at the Harry Allen Generating Station located 35 miles north of Las Vegas.

Suits Filed Over Utah Power Plant

Delta, Utah — The Utah Associated Municipal Power System (UAMPS), composed of 23 Utah communities and six electric cooperatives, has filed suit to force the Los Angeles [Calif.] Department of Water and Power (LADWP) to go ahead with plans for a third 900-megawatt coal-fired unit at the 1,800-MW Intermountain Power Project plant near Delta — or at least free the project's supporters to do so. UAMPS is concerned that LADWP is considering construction of a nuclear power plant on the site instead of the third coal-fired unit. A recent California law prohibits utilities in the state from purchasing additional power generated by coal combustion, and, according to the suit, "developing the [Delta] site for a nuclear plant would comply with emissions requirements of the California law and also avoid the political and public outcry that would surely ensue if Los Angeles Power proposed a nuclear plant in its own state." Enactment of the law led California participants in the Intermountain Power Agency (primarily LADWP) to withdraw their support for IPP Unit 3, and the California interests have a controlling interest in the power agency. Oregon-based PacifiCorp, which wants to join UAMPS in proceeding with the new coal-fired unit, has filed a lawsuit of its own to force the issue, noting that it has already spent $2.7 million on IPP Unit 3.

Another Uranium Enrichment Facility For New Mexico?

Carlsbad, N.M. — Areva, a French nuclear energy corporation, is considering the construction of a uranium-enrichment facility somewhere between Carlsbad and Hobbs in far southeastern New Mexico. Louisiana Energy Services (LES) is currently building an enrichment facility at Eunice, 18 miles south of Hobbs (see Rocky Mountain Construction, Nov. 26, 2007). The Areva facility could be slightly larger than the LES facility. "We understand that there are five states in which they are looking at [a total of] eight different sites, of which we have two that are in the mix," said state Rep. John Heaton (D-Carlsbad). Nancy Lang, a spokesperson for Areva, confirmed that the company has selected eight finalist locations in the U.S. for a possible enrichment plant, but she would not confirm that two of the locations are in New Mexico. "We hope to make the final decision in the early part of the year," she said. Currently, only about 15 percent of the enriched uranium used at nuclear power plants in the U.S. is produced domestically. The LES plant will boost that total to about 50 percent, and the Areva plant could put it at 85 percent. Additionally, the number of nuclear power plants in the country is expected to grow in the next few years, as applications have been filed for a large number of new plants.

Concerns Delay N.M. Ethanol Plant

Clovis, N.M. — New Mexico's Environmental Improvement Board has ordered the state Environment Department to hold a hearing on ConAgra Trade Group's proposed ethanol plant at Clovis, even though the department has already issued an air quality permit for the facility. Local citizens' groups are fighting the location of the plant, which would be built adjacent to an existing ConAgra grain elevator along US-60/84 just west of the city limits and would produce 108 million gallons of ethanol a year. If the hearing results in upholding of the air quality permit, one citizens' group has said it will appeal the matter in court.

Financing Near For Wyoming Ethanol Plant

Greybull, Wyo. — Big Horn Basin Ethanol, the company planning to build an ethanol production facility in Greybull, has finalized a lease agreement with Bronte Renewable of Ontario that would provide up to $45 million for the project. Under the deal, Bronte would own the plant and lease it to BHBE to operate, according to BHBE President Tom Johnson. Also assisting with project financing is Excelsior Capital, North Carolina commercial finance and merchant banking company. Project backers have been seeking financing for the plant for two years. If this deal works out, construction will start in July 2008, with completion by September 2009. The plant, with 33 full-time workers, would process 7.5 million bushels of corn a year and use 470,000 gallons of water a day. The town of Greybull has signed a contract to allot a portion of an existing but previously unused Bighorn River water right to BHBE to satisfy the plant's needs. Cleanup of the former Amoco refinery site that would be home to the ethanol plant was about 80-percent complete at the end of November.

Work Begins On Utah's First Wind Farm

Spanish Fork, Utah — Construction has begun on Utah's first windpower project, a small nine-turbine wind farm at the mouth of Spanish Fork Canyon. Wasatch Wind spokesperson Christine Mikell announced, "It's under construction. It will be up and running by June." Between November and January the site will be prepared and concrete foundations poured for the 2.1-megawatt turbines, and the towers and turbines should go up in January and February. Though it is a small project, it is noteworthy in being Utah's first wind energy project. Utah is one of the only Western states without at least one windpower project. There are two wind turbines at Point of the Mountain, south of Salt Lake City, but they serve only Camp Williams and do not furnish power to the area's power grid. Wasatch Wind received a 70-percent property tax rebate for the first 10 years of the 20-year power supply contract to help get the project started.

Firms Plan Windpower Project On Nevada-Idaho Border

Jackpot, Nev. — Sierra Pacific Resources and Renewable Energy Systems Americas Inc. announced recently that they are finalizing an agreement to jointly develop and operate a large windpower project in northeastern Nevada's Elko County and southwestern Idaho's Twin Falls County. Located on 9,000 acres of federal, state and private land near the tiny Nevada community of Jackpot, the China Mountain project would employ large-scale state-of-the-art wind turbines to produce more than 200 megawatts of electrical energy, which would be fed into the Sierra Pacific Resources power grid. In line with federal law, the project must go through an environmental review process, and preparation of the environmental impact statement is expected to begin in early 2008. Renewable Energy Systems Americas Inc. is part of the UK-based Sir Roger McAlpine Group and has been active in the U.S. market since 1997, participating in developing or constructing over 10 percent of currently operating windpower projects in the country. Cost of the China Mountain project is estimated at about $2 million per megawatt.

FERC OKs Controversial Pipeline Routing

Pinal County, Ariz. — In spite of intense local opposition, the Federal Energy Regulatory Commission (FERC) has approved a controversial route for a planned natural gas pipeline that will send the line through or immediately adjacent to 39 different developments that are either under construction, approved or planned. Transwestern Pipeline Co.'s 260-mile Phoenix Expansion Project pipeline is to extend from Coconino County south past the Phoenix metro area into Pinal County, expanding gas supplies to the East Valley and areas west and south of Phoenix. The Arizona Corporation Commission as well as affected counties and municipalities all sought to have the pipeline follow existing utility easements, sharing routes already used by El Paso Natural Gas Co. and the Salt River Project. But the plans submitted by Transwestern and approved by FERC stray from those existing easements and pass through or adjacent to a substantial number of residential developments. Speaking of FERC's decision, commission spokesperson Tamara Young-Allen said, "They agreed with staff that the proposed route was environmentally superior to co-location. The commission considered all of those issues."

Pipeline Would Pass Through Roadless Areas

Grand Junction, Colo. — The 25.5-mile Bull Mountain natural gas pipeline would cross portions of three roadless areas in the Gunnison, Uncompahgre, and White River and Grand Mesa national forests of western Colorado under the preferred route endorsed by the final environmental impact statement released Nov. 16. Plans call for a 20-inch gas pipeline and companion 8-inch produced-water pipeline to pass through parts of Gunnison, Delta, Mesa, and Garfield counties within a 50-foot right-of-way, crossing the roadless areas along the way. The Bureau of Land Management and U.S. Forest Service said their endorsement of the route is not a violation of the 2001 Roadless Rule, saying any impacts would be small and short-lived. "Decision-makers felt those impacts would be temporary; there won't be any irreversible and irretrievable impacts," said Forest Service spokesperson Lee Ann Loupe. "There have to be trucks and heavy equipment to put in a pipeline, but the area will be reclaimed and closed to motorized vehicles [once construction is completed]. And they'll be working in the smallest right-of-way possible." The project of Gunnison Energy and S.G. Interests is designed to transport more than 80 million cubic feet of natural gas per day and have an estimated 50-year life. The companies hope to begin construction next spring and have the pipeline ready for service by next winter.

Another New Gas Pipeline Proposed

Houston — Spectra Energy of Houston has unveiled plans for a new pipeline connecting natural gas producers in northwestern Colorado, southwestern Wyoming and northeastern Utah with power plants on the West Coast. The proposed Bronco Pipeline will be over 650 miles long and have a capacity of 1 billion cubic feet per day. It will cost more than $3 billion to construct. Based on preliminary market need and assessments, the project is planned to be in service as early as 2011, with final completion in 2012. Spectra is currently working to determine final project parameters including route, markets and timing.

Another Wyoming-To-Oregon Pipeline Unveiled

Opal, Wyo. — On the heels of Spectra Energy's announcement, El Paso Corp., Houston-based energy company, has filed a right-of-way application with the Bureau of Land Management for the Ruby Pipeline project, a 680-mile, 42-inch pipeline to carry natural gas from the Opal Hub in southwestern Wyoming to another hub in Malin, Ore., near the California border. This is virtually the same route planned by Spectra's Bronco Pipeline. The Ruby Pipeline will have an initial capacity of 1.2 billion cubic feet per day — similar to that of the $4.4-billion Rockies Express pipeline that will carry natural gas from Colorado's eastern Slope 1,678 miles to eastern Ohio. El Paso said the Ruby Pipeline will be expandable to 2 billion cubic feet per day. Subject to regulatory approval and obtaining necessary customer commitments, the Ruby Pipeline is anticipated to be in service in the first quarter of 2011, El Paso said.

Colorado Molybdenum Mine To Reopen

Climax, Colo. — Freeport-McMoRan Copper & Gold Inc., which now owns the mothballed molybdenum mine at Climax, high in the Rockies at the summit of Fremont Pass above Leadville, has announced it will proceed with the previous owner's plans to spend $500 million and put the open-pit mine back into production by 2010. Construction will begin next spring on new state-of-the-art milling facilities at the mine, with initial construction employment of about 150 and peak employment reaching more than 500. The mill will have an initial capacity of 30 million pounds of molybdenum a year and may be expanded to 60 million pounds if demand and other conditions warrant.