Coatings World - June 2009

expand transit capacity and to modernize transit systems. This includes airport capacity expansions, improvements in bus and rail systems—plus various safety improvements; and, building and rehabilitation of roads, highways, bridges and ports. According to Secretary LaHood, $30 billion will be made available for highways, $12 billion for transit, $3.1 billion for passenger rail and $3 billion for airports.

Amtrack alone will receive $1.3 billion from the Stimulus Bill, which will amount to roughly double Amtrak’s current capital investment program. This funding will be used to upgrade railroad assets and infrastructure, and will provide capital to expand passenger rail capacity. Current planned improvements include replacement of a drawbridge on the Northeast Corridor, repair to Amtrack facilities nationwide, and repair and return of damaged passenger cars.

Another $26.6 billion from the American Recovery and Reinvestment Act (ARRA) has also been released to state and local transportation authorities to repair and build bridges, roads and highways. More than 100 projects—totaling $750 million—have already been identified by state highway departments. Usually an approval process is required for coatings sales to DOT bridgework. Suppliers with existing approvals will be the ones able to capitalize on this increased sales opportunity.

Overall, DOT plans will result in

increased demand for a range of new construction and maintenance materials—from road marking paints, decals and adhesives to architectural paints, heavy duty coatings—and, for other specialty products depending on the particular project such as fire protection materials and composites.

Chemark estimates paints and coatings usage for the DOT initiative to range from $200-$255 million over the next three years. This calculation represents approximately one half of one percent (0.5%) of the planned overall DOT planned stimulus offering.

DEPARTMENT OF ENERGY

Table 1 highlights Department of Energy (DOE) Stimulus Plan funded programs. In addition, $6 billion is allocated to fund approximately $60 billion in loans. The DOE plans to invest in energy efficiency and conservation in order to reduce total energy use, and fossil fuel emissions and to improve energy efficiency nationwide. This will include investments in renewable energy such as wind, solar and hydropower—and will involve enhanced energy efficiency, such as deployment of more energy efficient heating and cooling systems on government buildings plus use of renewable energy as much as possible—and, even installation of energy efficient street lights.

The long-term stated goal is to ensure that ten percent of electricity comes from renewable sources by 2012 and 25% by 2025. Other stated objectives to

end dependence on foreign oil are to weatherize one million homes annually, develop/deploy clean coal technology and prioritize the construction of the Alaska Natural Gas Pipeline. The latter alone will use more than $150 million in powder coatings.

In particular, the Economic Stimulus Bill contains multiple provisions to benefit the wind industry and other renewable sources, including a long-term extension of the wind energy production tax credit, and a Treasury Department grant program for renewable energy developers, among other steps. The increased demand for wind energy alone will result in increased sales for coatings of turbines and blades, in addition to other specialty chemical materials such as composites and tapes.

Obviously DOE planned projects will result in a variety of increased sales for architectural paints, high performance coatings including pipeline and OEM coatings, and for other specialty chemicals-based end-use construction materials. In some cases, general approval and specification by the supplier is all that is needed in order to sell for that particular application. However, for other end-use applications, specific product approvals may apply, such as in the case of coatings for wind turbines where depending on the manufacturer specific