EDITOR'S NOTE: The Energy Times recently sat down with James O’Neil, Quanta Services president and chief executive in his Houston office to discuss industry trends.
ENERGY TIMES: The wave of investments ahead – who will be making them? Will new players come in?
O’NEIL: That’s an interesting question. Technology and regulation is driving the change in the utility business model. There are outsiders who are interested in entering the electric space – both in generation and T&D. The utilities need to maintain control over the flow of electricity and the grid. That’s important for grid reliability and grid security.
ENERGY TIMES: California policymakers want to see 1.3 gigawatts of storage developed in their state by 2020. Will that inhibit growth of your transmission work?
O’NEIL: That increases our opportunity. Whenever there are changes in regulation or changes in technology, it drives our business. I don’t think we’ll ever get away from central station generation. That’s going to require transmission. With storage or distributed generation, you’re going to have to build infrastructure in order to integrate them into the grid, It’s going to be a more complex system and that’s just going to require more skilled labor to help operate and maintain the systems. We pride ourselves in trying to stay 2 to 3 years ahead of the industry trends and making sure that we can accommodate our customers’ needs.
ENERGY TIMES: What share of your business activity is electric versus gas projects?
O’NEIL: It’s about 70 percent electric and 30 percent gas today.
ENERGY TIMES: Has the surge in fracking led to more business for you?
O’NEIL: Absolutely. With the shale developments we green fielded a billion dollar business in just our mid-stream pipe construction in 18 months. The shale plays were an energy game changer for this country. And we basically are re-plumbing the entire infrastructure in the United States. Despite the low price of oil, building pipelines is going to be very active business in 2016, 2017 and 2018.
ENERGY TIMES: What are some of the major policy issues that concern you?
O’NEIL: The siting and permitting of infrastructure is the biggest one.
ENERGY TIMES: Is it harder now?
O’NEIL: Of course it’s harder. We are having lines built in populated areas that haven’t seen new infrastructure built on this magnitude for 50 years. There’s a lot of pushback.
ENERGY TIMES: Are there states or regions that you would just rather not work in?
O’NEIL: We can handle anything. We pride ourselves on being in the more difficult areas because that’s where we differentiate ourselves from everyone else.
ENERGY TIMES: What excites you about the energy picture in America right now?
O’NEIL: There’s so much opportunity out there. Our only limitation is people – good people, and being able to develop those people. We are in the most exciting time in the history of the electric power industry and the pipeline industry. Those who have construction capabilities have a lot of opportunity going forward to grow with their customers. Right now we are working on 17 major transmission programs that are individually valued at more than $200 million. That’s unheard of. There’s still a significant amount of transmission that needs to be built. The majority of existing transmission is at or beyond its useful life.