Steel Nation hopes to use oil, gas field success as springboard
A well site can be a sad place for a man trying to sell steel buildings.
That was Mark D. Caskey's takeaway from his first tour with a Marcellus shale gas driller: No buildings, no roofs, no walls of any kind meant no chance for him to grab any of the business streaming into Western Pennsylvania.
Fortunately for him, the man he was with pointed out the compressor station a few hills away.
Seven years later, Caskey's company, Steel Nation Inc., is almost fully devoted to the region's oil and natural gas revival. It designs and builds compressor stations that dot Western Pennsylvania, the warehouse-like buildings that are home to engines that push natural gas through transmission pipelines running around the clock. They make a whir that can pierce the country silence, and Steel Nation's buildings are designed to stop the noise.
“I was just floored at how loud it was. It was just mind-boggling how loud it was,” said Caskey, who realized he could transform buildings he was selling to insulate sound generated by coal operations to work in the gas industry, too. “You just realize it's good business. It wasn't a tough sell.”
It's been revolutionary for the company. Seven employees working out of a house in South Strabane oversaw the use of 2,552 tons of steel in 2012, ranking it No. 11 on the trade magazine Metal Construction News' list of top metal builders nationwide. Steel Nation's revenue jumped more than 400 percent from 2010 to 2012, executives said.
The privately held company declined to disclose other details of revenue or profit. They said the company has done about 200 projects, mostly in Pennsylvania, with some as far away as Wyoming, Texas and California.
Caskey got into the market at a key time. With horizontal drilling and hydraulic fracturing opening up a gas drilling boom in the Northeast, drilling and processing operations were going into areas vastly different from their traditional home. In Texas and other Western drilling states, these stations would often be miles from anyone who might complain. But in the populous Northeast, noisy compressors were helping pipelines run, sometimes right near suburban development.
The pipeline companies had to find some way to mitigate the sound because public perception and neighborliness were integral to helping the industry work across the region, said Brian Easter, a project manager at the Williams Companies Inc., which has an office in North Fayette. The pipeline and processing company's first local compressor station was a Steel Nation project, Easter said.
Price can vary widely, but a building may add $200,000 to $300,000 to a compressor station project that might cost about $3 million in total, he added. Even with that cost, it's become a standard investment for Williams.
“You don't want to just move in and start making people angry all over the place,” Easter said. “We have a good neighbor policy here. We understand as much as everyone else that if you live in a place and you're happy in it, if a company comes in and builds a compressor station right next to you, it can make your life hell. It's not part of our mission to do that.”
The steel building and insulation help contain the sound, while a ventilation system keeps air circulating so it doesn't overheat, Steel Nation executives said.
Steel Nation has an especially good design to keep sound in while letting air out, Easter said. The company is fast with its designs and solid in safety, said Glenn Koch, director of projects–engineering and construction for Williams' local operations.
That, coupled with Caskey's persistence in marketing his business, helped as gas companies were looking for local contractors to work with, said Alan Reid, Steel Nation's executive vice president. Reid joined the company about a year ago to help it formalize its operations and keep growing, he said.
Steel Nation is targeting North Dakota and the national transmission pipeline system as its next growth markets. Both need compressor stations as oil and gas drilling gets larger nationwide, providing the market the company needs to help turn its success in Pennsylvania into a national presence, Reid said. The plan is to increase revenue at a 15 percent to 20 percent pace and possibly add employees next year.
“We can take exactly what we're doing here into all those other plays,” Caskey said. “It's just a matter of how do we manage that growth. That's the challenge right now.”
Timothy Puko is a staff writer for Trib Total Media. He can be reached at 412-320-7991 or email@example.com.