It’s been more than a decade since the U.S. had a federal surface transportation spending program in place for longer than a couple of years. Instead, states and localities, which actually construct and maintain our roadways, have been stumbling along from one short-term extension to another – 36 in total. They were never certain if or when the federal government would meet its commitment to help fund projects.
That changed in December with the enactment of a five-year, fully-funded infrastructure bill. With that action, Congress and the president set in motion an important period of stability and growth in the construction market. When considering major projects, like large bridge overhauls, states need time to plan, fund and execute. They now have the federal commitment that has been missing to help address some of our most pressing, dangerously deficient infrastructure.
The “Fixing America’s Surface Transportation,” or FAST Act, authorizes spending over fiscal years 2016 through 2020 for the US Department of Transportation’s highway, motor vehicle safety, public transportation, motor carrier safety, hazardous materials safety, rail, and research, technology, and statistics programs.
According to the American Association of State Highway and Transportation Officials, the FAST Act’s $305 billion authorization includes $225 billion in Highway Trust Fund (HTF) contract authority over five years for the federal-aid highway program. It increases funding from $41 billion in 2015 to $47 billion in 2020. The bill continues to distribute nearly 93 percent of all federal-aid highway program contract authority to state departments of transportation (DOTs) through formula programs.
The bill places major emphasis on freight investments, to be supported by the HTF by creating a new National Highway Freight Program. It will be funded at an average of $1.2 billion per year and distributed to the states by formula. In addition, a new discretionary program entitled the Nationally Significant Freight and Highway Projects is established, funded at an average of $900 million per year.1
With this sorely needed investment in the nation’s infrastructure, there are opportunities for the steel industry, including ArcelorMittal. The kinds of projects expected under the FAST Act would include road projects, bridge replacements and rehab, rail, intermodal facilities and others. Many of these projects have long been delayed, given the uncertainty of federal funds, so a backlog exists.
...Our nation’s infrastructure is in desperate need of improvement and ArcelorMittal is ready to help meet that need... As we meet with legislators in Washington and in the states, we must constantly remind them of the essential economic value infrastructure provides for our business...
Many of the programs funded by this bill include “Buy America” requirements to ensure U.S. tax dollars are spent on domestically-produced steel. This not only helps support the industrial supply base that we provide, but invests every cent in the U.S. economy, rather than sending large sums to foreign competitors. For every direct steel industry job, seven additional jobs are created throughout our supply chain and with our customers. In 2014, the domestic steel industry employed 152,000 people and supported one million workers in the U.S.
The steel we produce is also high quality and among the best in the world environmentally. The domestic steel industry has reduced its energy intensity by 31 percent since 1990, while also reducing its greenhouse gas emissions by 36 percent. The U.S. Department of Energy has indicated that the steel industry in the U.S. has the lowest energy intensity and second-lowest CO2 emissions intensity of any major steel-producing country. This supports one of ArcelorMittal’s 10 sustainability development outcomes: to be a responsible energy user that creates a lower carbon future.
As we know better than most, steel is all around us. It is an essential component of safe, resilient, sustainable infrastructure. We also know that our nation’s infrastructure is in desperate need of improvement and ArcelorMittal is ready to help meet that need. While the most recent surface transportation bill provides some glimmer of hope for the construction sector in the near-term, we also know that when it expires there will be even greater need for a long-term, sustainably-funded infrastructure program, given increasing budgetary pressure. As we meet with legislators in Washington and in the states, we must constantly remind them of the essential economic value infrastructure provides for our business in moving raw materials to our operations, our finished products to customers, and our customers’ products to market.
