Headlining this issue of Underground Construction is our industry-exclusive horizontal directional drilling survey (published online on June 17). This marks 15 years of research into the amazing HDD market that has evolved at an incredible rate, evolving from a utility and pipeline construction novelty to a necessity in a relatively short period of time.
Similar to the cured-in-place pipe technology introduced by Insituform to the rehabilitation market in 1971, HDD has become a “disruptive” technology that has forever changed the way the underground construction market addresses new installation of infrastructure. In fact, one of our survey respondents exuberantly declared that “the directional drill will be as common on a job site as a backhoe.” There is a lot of truth in that statement.
We began this survey during a memorable upswing in the cross-country fiber market. Rig production reached unbelievable heights in 2000 with almost 4,000 rigs built (and mostly sold!). It was a time of high profit and endless work logs. Of course, it couldn’t last. The telecom bust brought the still fledgling industry back down to reality and our survey captured the agony of a market depression for both contractors and manufacturers. Rig production fell to a low of 460 units in 2003.
But the industry slowly recovered from the bad years, embarking on the road to recovery at a more solemn, realistic pace, all the while continuing to develop. Those surviving contractors and manufacturers have since built a solid, more realistic market. Rig sales in 2013 should top 2,500 units for the second year in a row, thanks to a strong telecom industry and the well-documented energy boom. Virtually all other market segments continue to prosper for HDD as well.
Another interesting change in the HDD market has to do with the actual size of rigs. While smaller rigs continue to dominate in terms of gross numbers, mid-sized and even large rigs are becoming more and more popular. More mid-to-large rigs were sold in 2012 than ever before and that should continue in 2013. While the obvious conclusion is that the oil and gas shale boom is the cause, it is much more complex than that.
There are few limits on directional drilling these days. Traditional niches expand and new applications are found every day. To take advantage of such opportunities increasingly requires rigs with more power or enhanced abilities found in mid-sized units. Variations in soil conditions also require more torque or different types of drilling systems and tooling. For many contractors hoping to expand their business, mid-size and large rigs offer tempting opportunities.
Of course, all is not roses and rainbows for drillers. Complaints from survey respondents were common regarding the “new guys” in the industry who don’t understand the market and are constantly underbidding projects, making life difficult for veteran drillers. There are still areas new to the technology and one bad experience can sabotage the HDD market for others.
Additionally, the lack of quality, skilled labor continues to plague many areas, survey respondents lamented.
Several also stressed the need for continued education of owners and engineers. There are still those not accepting of HDD for primarily archaic reasons or lack of data. Times change and the HDD market must recognize the need for ongoing community educational interaction.
Or course, markets change quickly and there is no guarantee that HDD won’t see another down cycle. This is still a young industry. But fortunately, there are many who can recall both the boom years and dark days when HDD was struggling to carve its niche in the utility construction market. Those veterans, both in the contractor and manufacturing community, readily embrace growth but always with an air of caution and restraint. That is the mark of a maturing industry.
But for now, all is well for HDD. As we see many jobsites from around the country, it has become more common than not to see a directional drilling rig at work, right alongside a back-hoe loader.