Reinforced-Concrete Masonry One Possible Solution to Steel Price Hikes

Sharp increases in steel prices are affecting architects, contractors and builders in North America, and now they're looking for alternatives. Global steel and scrap prices have skyrocketed and market analysts point to extraordinary demand and consumption of steel by China as reasons for the increased prices.

On the scrap-metal side of the industry, Tom Danjczek, president of the Steel Manufacturers Association recently announced that an emergency steel-scrap coalition had been formed to study what has caused scrap prices to go up. The coalition pointed to purchases made by China and South Korea that account for half of all U.S. exports and warned that construction firms of all sizes face direct harm from sharply increased scrap prices.

Meanwhile, the price increases and expectations of even greater prices have contractors scrambling.

"Contractors, subcontractors and owners are caught in the middle on this issue due to the timing of the design and actual construction," said Kyle Montgomery, executive director at the Texas Masonry Council. "Concrete masonry producers around the state have been discussing with architects how load-bearing concrete masonry can be used to reduce prices and to design more durable buildings. Our contractor and producer members are also working with architects in order to advance the use of load-bearing masonry as opposed to steel superstructures and steel studs. This is a solution that would considerably reduce the quantity of steel required and lower the costs."

Entergy one of Seven Companies to Investigate Licensing, Design Certification of Advanced Nuclear Reactors

Two nuclear reactor vendors and five leading energy companies, including Entergy Corp.-which serves about 2.6 million utility customers in Texas and three other states-plan to form a consortium that will work with the U.S. Department of Energy to demonstrate and test a new process for obtaining a Combined Construction and Operating License for advanced nuclear power reactors.

The companies have signed a memorandum of understanding expressing their intent to form the consortium. Neither the planned consortium nor its members are making a commitment to build a new nuclear unit at this time.

The consortium will prepare a proposal in response to a DOE solicitation in November asking energy companies to demonstrate the U.S. Nuclear Regulatory Commission's new COL process.

Each energy company is expected to contribute about $1 million a year in cash to the consortium plus in-kind and administrative services totaling about $7 million over seven years.

The consortium plans to submit its proposal as part of DOE's Nuclear Power 2010 program, a joint government/industry cost-sharing initiative designed to conduct regulatory demonstrations and advanced reactor development activities. Demonstrating that the NRC's new licensing process can result in a COL reduces some business uncertainty for companies interested in building new nuclear plants.

The new COL licensing process was established by the NRC in 1992 to streamline obtaining a new license and to add some certainty, but it has never been tested.

The consortium's objective is to demonstrate the COL process by obtaining the first COL license in the new process. A decision on construction of a new nuclear plant would be made by the individual members of the consortium at a later date.

"Advanced nuclear plants offer a promising potential, including passive safety designs, stable fuel prices, lower production costs than other fuels used to generate electricity and a low environmental impact," said Gary J. Taylor, president, CEO and chief nuclear officer of Entergy Nuclear.

CITGO Moves Corporate Office to Houston

CITGO Petroleum Corp., based in Tulsa, Okla., will soon begin moving its corporate headquarters from Tulsa to Houston along with 700 jobs. An additional 300 positions will remain in Tulsa. The relocation will take approximately two years to complete.

"This has been a long road for the CITGO family, but we know we have arrived at the correct decision, a decision that will strategically position CITGO as a major player in our industry," said Luis Marín, the company's president and CEO. "Furthermore, the energy business is the cornerstone in the state of Texas and the city of Houston, and when combined with CITGO's people, resources and assets, I feel confident that this relocation will propel the company to the next level of success."

As part of the move, CITGO will receive a $5 million grant from the Texas Enterprise Fund, and the cities of Houston and Corpus Christi will sponsor $30 million in low-interest loans through the Texas Economic Development Bank and its bond program.

"Because of the investment in CITGO, during the next 10 years we have committed to invest $828 million at the Corpus Christi refinery and add 120 jobs, which will result in an increase in the volume of gasoline produced at that location," Marín added.