For all the talk in the United States about rising energy costs and becoming energy-independent from oil-producing nations, falling oil and gas prices in the last few months hasn’t resulted in the nationwide celebration one would expect. On the consumer end, of course people are happier to pay less at the pump, along with businesses for whom transportation costs can make or break their razor-thin margins. But the US steel industry has not embraced the cheap oil market, for obvious reasons: cheap foreign oil makes US-produced oil and natural gas less competitive, and a less-competitive market means less demand for steel pipe. Projects are stalling, orders are dropping, and the US pipe market is scrambling to regain market share. While it’s natural to feel sympathy for those directly involved, the bigger picture is less forgiving. Oil and natural gas are limited resources, and whether the world’s reserves last another few decades or another (unlikely) century, there will come a time when the sector is obsolete—along with the steel pipe market that serves it.
Does this mean steel pipe producers should throw their hands up and surrender? Of course not! Many pipe mills already offer a diverse line of products, including standard pipe and structural tubing. An early shift in priorities would allow producers to continue to serve the energy market for as long as it lasts while also preparing for its demise. Specifically, pipe mills should start prioritizing (or commencing, if they haven’t already) the production of hollow structural sections (HSS) that are used in solar panel installations. For now, many rooftop installations use lightweight aluminum to support the panels, but ground-knotted projects use primarily steel (although advances in AHSS technology could give steel the rooftop edge as well in the future).
Industry estimates state that around 100-200 net tons of HSS is required per megawatt of installed solar capacity, and according to the Solar Energy Industries Association (SEIA), Q3 2014 represented the second-largest quarter ever for solar installations in the US at 1,354 megawatts. As of Q3, the cumulative total installed solar capacity in the US was 17,500 megawatts with nearly 600,000 solar installations throughout the country, with exponential growth forecast for the next few years. Plus, installations are moving beyond the typical rooftop or solar field applications.
A Washington Post article in late January detailed the latest opportunity for solar: parking lots. An existing example at Rutgers University produces 8 megawatts over its 28 acres, enough to power 1,000 homes. But free energy and shade aren’t the only advantages: the article said the average US city is 35-50 percent covered by pavement, with parking lots comprising 40 percent of that total. Asphalt and concrete absorb and retain the sun’s heat, making cities much hotter than they would be otherwise, so covering parking lot with solar panels would have a threefold benefit: capturing energy, keeping cars shaded and cool, and keeping the city itself cooler in the absence of ground-absorbed solar energy.
Sure, 8 megawatts per parking lot doesn’t sound like much of a return-on-investment, especially for how much steel such an installation would require, but efforts at true energy independence—meaning not just independence from other nations, but independence from paying for energy at all beyond the initial installation—require seeing beyond short-term results and instant gratification. Oil and coal are still the major players now and they will likely remain as such for the next decade or so. But as the evidence of climate change mounts and the whims of the energy commodities market fluctuate with sharper turns, it would be more than prudent for steel pipe producers to throw a significant amount of investment and research into solar installations—it might be a matter of survival.