June 2019 Vol.74 No. 6

Editor's Log

Survey Says: Clear Sailing for HDD

Robert Carpenter  |  Editor-in-Chief

This issue marks the 21st version of Underground Construction’s exclusive Horizontal Directional Drilling (HDD) Survey. We’ve been embedded within the HDD market since the ‘80s. This survey is an important tool that allows us to understand market nuances, fluctuations, issues and challenges. Beginning on page 22, you’ll see our 2019 report replete with expansive charts and graphs that clearly profile a healthy industry—one that is rife with opportunities for growth and promise of a bright future. 

However, its positive outlook also raises a cynical observation from veteran drillers: the bubble must burst sometime; we witnessed it happening in 2001. But short of a major economic crunch, our data reflects the belief that most HDD markets will remain strong for several more years. 

When discussing the overall HDD economy, one of the primary drivers, as in the ’90s, remains telecommunications work, specifically fiber optic installations. There is certainly a tendency to compare the cross-country fiber boom of the ’90s with today’s bustling market. However, while there are certainly similarities and fiber continues to play a major role in the strength of the U.S. drilling market, a true apples-to-apples comparison is not applicable as we near 2020. 

Before the turn of the century, it was the lure of cross-country fiber optic installations paired with the explosive development of a perfect construction technique for telecommunications (HDD) that set the market spinning. Directional drilling was rapidly expanding into other market areas back then, but the impact was still relatively minor everywhere else. However, for the small rig market, which dominated at the time, telecom was mecca for profit. Scores of people, even those with very little construction experience, jumped feet first into the market as owners were desperate to get their fiber in the ground and there was a shortage of available contractors. With equipment easy to obtain, the attraction of a fast  
buck was very strong. 

In 2000, almost 4,000 HDD rigs were sold. For the amount of work at the time, that was probably about 2,000 rigs too many. Most had no idea that the sky was about to fall. Indeed, by the beginning of 2001, the bottom dropped out of the market, and in 2003, only 460 HDD units were sold. 

The market dynamics are much different now. Certainly, there is economic exposure for those focused solely on telecom installation as HDD is used at such a  
high rate for fiber work. The introduction of 5G networks has strengthened telecom work even more. 

While other markets don’t use HDD with such intensity, it has become a major tool for virtually all facets of underground utility and pipeline work. HDD has found uses previously deemed impractical. These days, the variety of niches for HDD seems limited only by the imagination. With enhanced tooling for both broader performance and specific applications, more doors are opening for HDD. Intersect boring, once an incredible feat, is now becoming almost routine. The introduction of Direct Pipe, kind of a combo of microtunneling with a steerable, HDD twist, has made impossible jobs possible. 

Still, there are challenges to the market as it continues to mature. Cross bores remain the bane of directional drilling, and until that issue is finally resolved, it will present problems with acceptance of the technology. Mud disposal continues to be an environmental concern for many areas of the country not convinced that used drilling fluid is truly inert (despite research to the contrary). Disposing of mud has become an important—and costly—portion of any project planning. 

At some point, fiber work will slow. The best guesses range from 3 to 7 years. But telecom work likely will not come to an abrupt halt, as it did in 2001. There will still be work, albeit at a slower pace. And granted, there will be those companies that have not diversified their capabilities or are over-extended. But with all the other markets still projected to be solid, and with no end in sight for HDD opportunities, most contractors will survive a telecom slowdown in good shape. 

Since the fabled bust, it’s been a long and winding path back up the mountain of prosperity. We’ve now achieved almost 15 years of growing market activity driven by a variety of factors and diversified industries. All this adds up to a bright future for HDD. • 

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