The Economic Significance of the Steel Storage Tank Industry
With a market size of $12 billion spread across over 800 companies, the steel tank industry remains a pivotal component of the domestic manufacturing supply chain. Through breakthrough developments in welding, corrosion prevention, and innovative coating processes, our industry has been able to develop high-skilled American jobs that produce materials essential to the storage and transportation of petroleum, biofuels & renewable fuels, agricultural feedstocks, food, water, wastewater, and chemicals.
Amidst concerns of workforce shortages, provisions concerning the recruitment of highly skilled workers, and strains on critical supply chains, Congress must support the steel tank industry to protect the storage and distribution of food, water, fuel, and chemicals. If the industry were to fail, the results would be catastrophic as these highly skilled jobs would be next to impossible to recreate in the current economy; farmers would be unable to feed their livestock, the irrigated crop market would continue to shrink, and our nation’s energy sector would be susceptible to foreign attacks.
Protecting America’s Investment in Infrastructure
STI/SPFA stands in strong support of the generational infrastructure funding passed via the Bipartisan Infrastructure Law (BIL), also known as the Infrastructure Investment and Jobs Act (IIJA), in November 2021. STI/SPFA applauds the bill’s allocations for:
- $55 billion – Water Infrastructure
- $47.2 billion – Grid resiliency
- $65 billion – Power and grid infrastructure improvements
- $16 billion – Ports and waterway infrastructure
STI/SPFA stands in strong support of maximizing these critical investments while utilizing best practices in asset management and sustainability. In effectively deploying the resources allocated through this legislation, asset managers must consider critical sustainability factors by prioritizing products with the longest service life and lowest lifecycle cost. Given that these steel tanks, if properly protected and maintained, have an indefinite service life that yields the lowest lifecycle cost and most sustainable option, STI/SPFA believes that steel tanks, pipe infrastructure, and related equipment will be crucial to ensuring that IIJA funding enables project owners to receive the highest return on their capital investment so that these projects may last for generations to come. These deployments will bolster our nation’s infrastructure, energy security, and grid resiliency at a time when these assets are most vulnerable.
According to the Department of Energy’s 2016 report titled “Electric Grid Security and Resilience,” the growing dependence on electricity generation through natural gas without an adequate storage option will “make the electric grid vulnerable to threats to that generation source.” With over 100 attacks reported across U.S. power plants in the first eight months of 2022, steel tanks are essential to provide adequate energy infrastructure to supplement the grid in the event of a sudden small or large-scale shutdown.
Without a system to provide backup fuel, critical infrastructure such as hospitals, nursing homes, water and wastewater plants, and nuclear plants will be vulnerable to foreign intrusion. These entities require a minimum of 96 hours of fuel in the event of an outage, underscoring the need to provide adequate energy infrastructure to meet this demand.
Unfortunately, we have seen the horrific results of insufficient grid stability time and time again. In December 2022, physical attacks on multiple substations in Washington resulted in over 14,000 power outages on the Tacoma Power and Puget Sound Energy systems. Only weeks earlier, a firearms attack against a North Carolina power station resulted in power outages for over 45,000 Duke Energy customers. These attacks have extended to our nation’s water infrastructure; in 2021, a small-size water and wastewater utility was faced with a ransomware attack that impacted the system’s SCADA Human Machine Interface (HMI). As attacks from adversaries both at home and abroad grow more sophisticated, America must ensure its electric grid is adequately prepared for even the worst-case scenarios.
Amidst the rising popularity of electric vehicles (EVs), the need to supplement this imminent transition through increased grid security and infrastructure has become more critical. While the rise of the production of EVs is well underway, it is imperative to recognize that EV infrastructure will take years to develop and may result in a significant expansion of our nation’s electric grid. Given that increased electrification, primarily driven through EV adoption, is expected to increase electricity demand by 38% by 2050, steel tanks and pipelines will play a vital role in ensuring that our country has the natural resources for grid expansion. Steel tanks will play a particularly important role in decreasing reliance on foreign adversaries for critical minerals, as the development of necessary infrastructure to supplement the electric grid will prevent America from becoming dependent on countries such as China to shore up its grid security.
Steel tank and pipeline providers are also key as the United States increases investments in and the use of lower greenhouse gas emissions energy sources including hydrogen, bio-renewable fuels, batteries, fuel cells, and nuclear energy. These energy sources require the building of new plants and infrastructure in most cases.
Securing Supply Chains
Over the past several years, the United States has seen unprecedented supply chain constraints that have impacted critical industries where steel tank manufacturers operate such as food, pharmaceutical, petrochemical, water, and agriculture-based sectors. These shortages, exacerbated by the pandemic, have resulted in Americans being unable to access basic supplies; as of today, over 10% of American households are considered “food insecure” while a 2014 GAO report found that, within a decade, 40 of 50 state water managers expect shortages in some portion of their state under average conditions.
Steel tank infrastructure plays a vital role in combatting these shortages through its ability to provide strategic reserves of critical supplies during natural and man-made disasters. By bolstering our nation’s storage capacity, steel tanks can buffer supply chain considerations by not only serving as a backup reserve but also enabling states to provide higher-quality resources to their residents.
The importance of steel tanks in preserving critical supply infrastructure is best seen through its impact on the agricultural industry. As a result of the gravity-fed and pressurized systems utilized by agricultural water storage tanks, stakeholders across the food supply chain have come to rely on the steel tank industry to efficiently irrigate crops while minimizing water usage. However, while over half of domestic crop sales are derived from irrigated farm operations, only 15% of our country’s total farmland remains irrigated. To address the clear demand for irrigated crops, steel tank infrastructure must be expanded to streamline access to address food insecurity and water access issues faced by millions of American households.
Where We Stand
Proudly serving over 185 companies, STI/SPFA is committed to promoting the interests of manufacturers of sustainable steel storage tanks, pressure vessels, piping and pipelines. STI/SPFA champions increased federal investment in steel tank infrastructure to secure our energy and power systems, protect our nation’s food and water supply, and ensure the safe and efficient transportation of chemicals, food, water, and fuel. STI/SPFA supports legislative actions that:
- Promote sufficient energy sector infrastructure to support both electric and non-electric transportation methods, with no technological preferences
- Provide the agricultural industry with resources to support the storage and transportation of livestock feed and the implementation of cutting-edge irrigation practices
- Support the adoption of steel tanks to transport vital resources across the country and bolsters domestic manufacturing supply chains
- Promote increased workforce development initiatives and support training for highly skilled workers operating across the steel supply chain
- Distribute clean, safe potable water
- Collect and treat wastewater
Phoenix Forging Company, a member of the Phoenix Forge Group, is a proud domestic manufacturer of steel tank and cylinder fittings based in Catasauqua, PA. Phoenix Forge was founded in 1882.www.phoenixforge.com
“Membership has helped shape Kennedy Tank & Manufacturing and sets us up well for the future.”
Kennedy Tank & Manufacturing Company, Inc.