A Scrapper's Dream

[Patriot76]

[QUOTE=etack;185855]Thanks patriot It was me and my phone suck most days and is crappy the others.

Thanks etack. I did not want to commit you, but wanted to give you credit. The member that visited the facility has decided to remain anonymous. The owner of the company that is a member of the forum will reveal themselves at the right time. I thought members of the forum might think I was making things up, but my values are more important than my reputation. So any of my contacts will be able to decide if you want to be associated with a renegade.

[Patriot76]

A couple of updates on the project from my work this morning. As was pointed out earlier, a trade of torch and trailer was made for a smart phone and computer. Work is being done at home.

The I-beams that the construction superintendent and demolition foreman tested me on are now on ground level. New plan, my contact for predicting metal prices informed me that the money is betting on a softening of the market on Monday in the Midwest. The recommendation was made to save the I-beams for the upcoming project (thanks Bear.) Therefore they have to store them on the ground level of the current project until we are ready for them on the next. To summarize: they wanted them gone yesterday, I asked for a week to sell them, they were not ready when the truck arrived, and now they have to store them. What goes around comes around.

I made a deal with Petrogen, Inc. to visit their facility in Colorado Springs next week for a cutting clinic. It was mentioned earlier that Smith/Miller Torches and Welding would be training our cutters on sight. I am working the same deal with Petrogen Inc. The plan now is for the best torchers to concentrate on the thick metal with the Petrogen torches and use propane with other cutters because of the cost. Part of the reason for this decision is because the initial cost for petrogen torches reaches $ 3,000 each. On the flip side the shortage of propane in the mid west has caused the price to triple this week. We will be using liquid oxygen for both set ups.

We had planned to run gas lines from manifolds attached to bulk tanks on the ground through out the building to eliminate cutting hoses all over the place. We have reconsidered this and plan to build portable carts to move tanks. We now have an old freight elevator that will be repaired to move tanks throughout the building.

Bear and Sawmilling pointed out the brokers that buy used equipment and sell it to third world countries. It has been discovered there are also brokers that dismantle and rebuild the plants so that is being researched as well.

[sawmilleng]

Patriot,

Did you get my PM?

Jon.

[Bear]

We used propane torches in the shipyard, had hoses running everywhere, mostly tangled up with welding leads. There weren't as many mishaps there as you might think. A manifold on the ground with a pipe going up the side of the building might be a feaseable solution, with connection points on each level. Just something to consider.
Those hoses were pretty rugged, and welding slag didn't bother them much, but you'll be mostly cutting I suppose. Even when we did have a burner blowing slag onto one of em, and it burned through and caught fire, the pressure is very low with propane, and didn't make a big fire, and was easily put out and patched. Most everybody there had the little crimping tools and could crimp the line and patch it. I'm not sure exactly what type of blowback valves they used, but must have been good ones. I suppose either way you'll want numerous fire extinguishers available on each level, but with those little cutting hose fires, just crimping the line would stop it burning, and it could be patched on the spot. You'll possibly even want a "fire man(/woman)" on the project during demolition, to try and keep you a step ahead of disasters in the making.
When Bethlehem Steel closed in Beaumont/Orange Texas, their pawn shops filled up with top notch cutting torches. If anything similar is going on anywhere now, you might get a pickup load of em for little of nothing. Might even find a bunch of chain come-alongs and the like that way

[FLimits]

This thread gets more fascinating every day. Now you guys have got me googling to learn about power plant equipment! In the process, I've also learned that coal-powered plants are being decommissioned at an increasing rate due to a combination of stricter EPA regulations, cheap natural gas, and overcapacity in certain markets. Here are the EIA's projections of closures through 2020:



Now, here's where things get really interesting: This spike in plant closures will generate a multibillion-dollar boom in the demolition industry. (So Patriot, you are embarking on a brilliant career path here.) However, at the same time, that demolition boom is going to produce an oversupply of scrap metal. Over the next several years, as more and more plants are disassembled, scrap prices are likely to be pushed lower and lower, unless significant new sources of demand materialize. This, in turn, means demolition businesses won't be able to rely on revenues from the sale of scrap metal to cover their costs and return healthy profits. They are going to have to charge more for their services, and the utility companies that own these plants are going to have to come up with that funding (which they will probably accomplish by charging their captive customers more for electricity). In this market, the businesses that pound out the most demolitions in the early years are likely to reap the greatest rewards; by the end of the decade, profit margins may have tightened. So get your lawyer to set up your new LLC now, Patriot, and line up your new company's next gig before this one is even over, because I'm betting on you to become the demolition king of the Dakotas!

Sorry this is kind of long. I just was amazed to discover how the story here fits inside this big jigsaw puzzle.

[Mick]

Along with that great analysis, you want to start your advertising campaign, redevelop business plan and reach out for contacts. This could be a major business break; although I figure you've already started planning.

[sawmilleng]

FL,

I think you are overestimating the amount of steel in a coal generation plant. Patriot said that the estimate for his plant was around 10,000 tons, which is pretty small potatos in the yearly North America steel capacity of around 100 million tons. And the world steel capacity of 10 times that.

The demolition should be just good steady business.

Jon.

[WoodmanYoel]

If you need help with an advertising campaign - my services are on the table (for a price of-course). I'm well versed in new media marketing and website design. I'll shoot you a PM with my site so you can get an idea of what I have to offer =P

[FLimits]

FL,

I think you are overestimating the amount of steel in a coal generation plant. Patriot said that the estimate for his plant was around 10,000 tons, which is pretty small potatos in the yearly North America steel capacity of around 100 million tons. And the world steel capacity of 10 times that.

The demolition should be just good steady business.

Jon.

Well, I confess that I didn't do my own quantitative analysis -- I just had a little google time after work! ;-)

I relied on secondary sources -- and your point is very well taken, because I really haven't seen anything that estimates the actual volume of scrap these plant closures are likely to yield. I don't even have a gut feeling for how much it would be.

I gather that the greatest share of it will be ferrous scrap. Is that correct? I suspect it would be hard to come up with an approx. "average" yield per generator without knowing anything about the equipment in each plant, because there's a lot of variation in capacity (hence size), design, etc. So how would someone go about doing a back-of-the-envelope estimate of the volume of scrap that would result from the dismantling of x plants per year? I guess someone who knows the industry very well could come up with a reasonable guesstimate.

Hmm. I also don't know the volume of scrap metal currently produced annually in the US. It would be useful to be able to estimate the % increase in annual scrap volume that's likely to occur. Do the yards set their own scrap prices, or do they basically take the prices dictated by the global metals markets?

Ugh, this scrapping thing is getting all macroeconomic on me.... I think it's time for me to go watch something stupid on TV!!

[sawmilleng]

FL,
I always fell asleep in my university economics course...don't know how I passed it! It was one of those arts filler courses that they made engineering students take to become "well rounded". meh.

All I did was do a quick Google of "annual volume of steel produced in the US" or something like that tp find the annual tonnages. Huge numbers! Patriot had mentioned what he had been told of the tonnage his plant should top out at. Not sure if it was in this thread or a previous one.

The majority of the scrap will be ferrous, followed by copper, most likely. I don't know if these generating stations used much stainless steel in them, especially in the very old ones.

Scrap is a world-wide commodity, so the suppliers are price takers, not price setters. This is because the commodity is so available, if you try to set your price the world will just flow around you if it is too high. So the low-cost producer always wins.

So you can kinda see what Partriot is up against: He has an objective of getting the plant torn down to just certain buildings left behind and gutted of equipment, probably with no extra money spent by his client company to achieve it. Or even a target of having XX$ left over after the scrapping work is over and everyone has been paid.

So he has to maximize his returns and minimize the work he has to get done with his own crew to realize this.

It isn't an easy job and he has to be a jack of all trades to pull it off. I've done it a few times with smaller plants and it can be a lot of stress-filled fun.

I tip my hat to him (and his boss, who spotted him on this forum!) and wish him all the success in the world.

Jon.

[FLimits]

But wait! There's more!

Forgot to post these links. They give some background on the closings, etc.:

Burns & McDonnell

» Coal Plant Decommissioning Navigant Research

[sawmilleng]

The first is just a huge engineering firm wanting to get in on the work. Not sure if they even do the work, or just get in between the owner and the man on the ground with the torch and siphon tons of money their way. The big engineering firms have their place, especially if you are considering changing the 1940's design coal generation plant for a 2000's design natural gas generation plant. There's big stuff to consider there but big savings to do it on the same site with all the infrastructure already in place.

They won't be cost effective to do what Patriot is doing. Not even close!!

The second link is a 18 page report you have to pay money for.

Jon.

[FLimits]

The first is just a huge engineering firm wanting to get in on the work. Not sure if they even do the work, or just get in between the owner and the man on the ground with the torch and siphon tons of money their way. The big engineering firms have their place, especially if you are considering changing the 1940's design coal generation plant for a 2000's design natural gas generation plant. There's big stuff to consider there but big savings to do it on the same site with all the infrastructure already in place.

They won't be cost effective to do what Patriot is doing. Not even close!!

The second link is a 18 page report you have to pay money for.

Jon.

Yep, I know who Burns & McDonnell are. I included the link because the first three sections (before B&M start hawking their services) give a decent brief synopsis of what's happening -- an estimated 180 plants being decommissioned -- and why. God, I wouldn't want anybody to think I was trying to draw any sort of comparison between these guys and Patriot! Please, if anyone reads this thing, just stop when you get to the section called "A Process of Integration." That's where the B&M spiel begins.

The second link points to the executive summary of a report that was cited by several articles I read (in national as well as trade publications). I included it because it gives some estimates of the revenues that these plant demolitions could generate. It's a big number: $5.3 billion from 2013 to 2020. Unfortunately, to see how these forecasts were derived, you would have to buy the report. However, even if we suppose that the estimate is excessive, it's probably safe to assume that revenues will be in the billions if the plant closings take place as expected.

BTW, I did manage to find a list of coal plant closures and conversions: Coal plant retirements - SourceWatch
The page actually gives a lot of details, including dates, the number of generators being retired or converted, and their capacity. Handy for lining up work!

[FLimits]

FL,
I always fell asleep in my university economics course...don't know how I passed it! It was one of those arts filler courses that they made engineering students take to become "well rounded". meh.

The dreaded econ elective! I took just enough econ courses to reach the conclusion that most of it was academic bull poo of the worst kind. After that, I remained safely ensconced in the math department.

The majority of the scrap will be ferrous, followed by copper, most likely. I don't know if these generating stations used much stainless steel in them, especially in the very old ones.

So now I'm going to have to learn about the ferrous metals market. Who knew the Scrap Metal Forum would have such a wide, steep learning curve?!

So you can kinda see what Partriot is up against: He has an objective of getting the plant torn down to just certain buildings left behind and gutted of equipment, probably with no extra money spent by his client company to achieve it. Or even a target of having XX$ left over after the scrapping work is over and everyone has been paid.

So he has to maximize his returns and minimize the work he has to get done with his own crew to realize this.

It isn't an easy job and he has to be a jack of all trades to pull it off. I've done it a few times with smaller plants and it can be a lot of stress-filled fun.

I tip my hat to him (and his boss, who spotted him on this forum!) and wish him all the success in the world.

I second that!

And I love it that this forum turned out to be the source of such a great opportunity. I had forgotten that amazing little detail. This place is a never-ending source of great stories. I've only been here a little while, and I've already witnessed the good guy getting his big break in business, scrappers discovering treasures in all sorts of unlikely places, and the record-breaking sale of the $900 keyboard. OK, I'm hooked.

[Patriot76]

This is the first time since my last post that access to the internet has been possible. My challenge during this time was to navigate 1,000 miles through the Midwest (icy roads) to watch my son's team wrestle. He is a first year coach in one of the largest schools in Wyoming. This was a path I followed to get into education and we shared this sport as he grew up to be a division I wrestler. This was more important and a bigger challenge than the power plant this weekend. As you can see he seeks the path untraveled and loves challenges as well. I will respond again after I digest the vast amount of information provided by the forum. That is what is so fantastic about SMF, individuals willing and excited to help out. Earlier in the post it was stated this will be a success because of the efforts of many people, a lot of them from SMF. You do not realize how much insight and information has been provided. You sure are making me look good.

[Patriot76]

After some soul searching, getting a lesson on micro and macro economics, and advertising above, my eyes have been opened. Flimit, Saw, Mick, Bear, Woodman, and the many others that have posted your insight and information are greatly appreciated and full of information. Having access to the forum is like having access to a company of consultants at disposal 24 hrs. per day. Threads should not be just stories, they should be educational and you have provided this. If educational text books were written with knowledge embedded in a story format with devil's advocate discussions, and constant questioning our students would learn more faster. Thank you.

A consulting job was accepted with this company because I do not have time to build a company, research and create a business model, and lack the risk tolerance needed to expand. If my son were interested, it might be a consideration. Therefore the next challenge will be renovating an automobile factory and then demolition of a nuclear plant. Just kidding, the owner has indicated interest in a couple of other projects that I could participate on. If this does not pan out, farm scrapping will be the endeavor. More important than money, farm scrapping provided entertainment and a lifestyle selected for retirement. If any younger members of SMF are interested in pursuing a career in the demolition trade, please P.M. me. Getting to know more about the metal markets, players, and resources has been educational. Thanks again for your help.

[FLimits]

Driving around in the snow and ice and doing heavy labor = retirement... God bless you, Patriot. As I've read this thread, I've been struck over and over again by your integrity. I just want to tell you how much I admire and appreciate your intelligence, courage, humility, and discretion. Please do us all a favor and be careful driving out there on the icy roads!

[spinroch]

Patriot76, You are amazing! Keep up the good work.

[caleb7210]

This is awesome Patriot76! Reading your thread has made me want to try to follow an idea I've had for a couple of years now. Around where I live we have several abandoned railroads that have the opportunities to be turned into walking/bike trails. I'm trying to see what it would take to get the contract to remove the railroad rails/ties from the old right of ways to prepare them to become trails. Your thread shows you don't have to be a big corporation to land a big job. I look forward to following this job as it goes on, good luck and be safe!

[Mick]

Good luck on the RR property. Make sure you have a release from the rightful RR owner.