Case Studies

Steel Nation

Adapting to a changing domestic energy market

For almost a decade, Steel Nation has been serving customers in the oil and gas industry as a premier designer and builder of transmission, storage and compression facilities. Initially founded to serve the coal industry, Steel Nation has made a pivot in recent years to focus on the booming business right in its own backyard.

Today, the Washington, Pennsylvania-based company is one of the industry’s leading builders of natural gas compression buildings that boast superior safety as well as heat and noise reduction. “We like to think we build the safest, coolest, cleanest and quietest compression buildings known to man,” says Mark Caskey, president of Steel Nation.

Steel Nation

Coming from a background in the coal industry, Caskey says many of the lessons he learned over his 25-plus-year career have been integrated into Steel Nation’s approach to today’s ever-changing energy industry. “The coal industry is down, so we took the things we did best in coal and brought it to natural gas, which is not that big of a jump,” he says.

Pennsylvania was once a dominant force in the U.S. oil market, with a well drilled in Titusville, Pennsylvania, in 1859 setting off one of the country’s first oil booms. While Texas quickly rose to prominence as the country’s most productive regions for oil, Pennsylvania has remained an important player in the domestic energy market.

That importance is now more evident than ever as the state serves as one of the epicenters of the modern natural gas boom, with Steel Nation arising to meet the needs of the nascent industry.

“We have a brand-new industry here that’s less than 10 years old. It’s really helped keep the economy alive in Pittsburgh and the surrounding area, and we’re doing quite well for the first time in decades,” Caskey says.

Reorganization ensures future success

As the energy market continues to grow and evolve, Steel Nation has reorganized the business into three distinct divisions in an effort to best serve its clients: Steel Nation Buildings Inc., Steel Nation Engineering Inc. and Steel Nation Environmental Inc.

Launched at the beginning of 2016, these three synergistic companies allow Steel Nation to diversify its slate of services at a time when the company’s traditional driver of growth, the midstream compression market, is suffering.

“The midstream side is down tremendously — probably 70 percent — so three years ago we started building transmission lines that may run from the Marcellus Shale all the way to Canada. We did not really play in that sandbox until the last couple of years, and the transmission side has grown tremendously,” he says.

Steel Nation Buildings focuses on the construction of pre-engineered steel buildings while Steel Nation Engineering provides in-house engineering services for all electrical and structural duties on Steel Nation projects. “Our clients would hire outside engineers, but we’ve been able to bring that in-house, which makes things much more efficient for our clients,” he says.

Steel Nation Environmental is focused on erosion and sediment-control work for projects in the oil and gas industry, performing remediation for clients on drill sites throughout Marcellus, Utica and other American shale plays. “We are involved at the early stages of the projects and in that way we can be involved in the design phase as well,” says Caskey.

This recent expansion of the company into three separate entities has required Steel Nation to expand beyond its Washington, Pennsylvania, headquarters. Steel Nation Engineering now has its own office in Wexford, Pennsylvania, while Steel Nation Environmental works out of offices in North Strabane, Pennsylvania.

“We’ve also added eight new employees since Jan. 1, including some draftsmen, engineers and accounting folks, so it’s been a good period of growth,” he says.

Battling public perception

As oil prices have fallen over the last two years, Steel Nation saw an overall slowdown in work across the industry. “The price of petroleum drives everything and when you’re paying $1.74 for gas in the winter at the pump, it really hurts our business even though we deal with natural gas because it follows the same trend,” he says.

This overall market contraction has led a number of customers to cancel or delay projects, but Steel Nation has found respite in the form of increased construction of transmission lines and gas-processing plants.

Caskey says the company has also faced a growing public perception problem as a number of high-profile pipeline projects face resistance from environmental activists. “A lot of these projects have been delayed for years and now America has a glut of natural gas and nowhere to put it,” he says.

With the nation’s natural gas repositories running at capacity, Caskey says that pipeline projects are more vital than ever. “We’ve just started exporting LNG in the last year to locations outside of North America, and those are good things for the industry.  But the cleanest, cheapest and most effective way to move heat homes and fuel manufacturing facilities is with natural gas.  We need more pipelines to move the natural gas safely.  However, these pipelines are being set back by these eco-terrorists, many of which are paid protestors,” Caskey says.

Canada represents an exciting new opportunity for the industry, according to Caskey, who says the country is a prime export partner for dry and wet natural gas.

At the end of the day, it’s the ability to provide his employees with steady, well-paying jobs using American-made materials that really gives Caskey the biggest sense of pride. “We’re a mid-sized company, but we contract out to hundreds of subcontractors, so to me, success is growing the business for the long term so we can hire people and give them a job that will last a lifetime,” he says.

With the ability to respond to market trends and the industry experience to weather any future challenges, Steel Nation will continue to serve the natural gas industry as a leading designer and builder of transmission, storage and compression facilities.

Published on: December 15, 2016


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