2009 A Bumpy Road But Bright Future Awaits HDD

11th Annual HDD Survey
By Robert Carpenter, Editor | June 2009 Vol. 64 No. 6

Not surprisingly, 44.1 percent of the respondents expect their contract volume to decrease in 2009, 40.2 percent anticipate doing roughly the same amount of volume in 2009 as they did in 2008; and 15.7 percent actually expect an increase in their HDD volume of work.

As HDD continues to gain further acceptance and diversify, the number of contractors concentrating their business primarily on drilling continues to grow, now at 10.7 percent of the overall market. HDD has truly found a role in virtually every utility market. Of those contractors utilizing HDD frequently on their projects, 20.4 percent were involved in the water market, 18.9 percent in sewer, 14.7 percent in the electrical industry, 14.4 percent in telecom, 13.9 percent in gas distribution and 6.7 percent in energy pipeline construction – a very balanced utilization of directional drilling by diverse contractors.

2008's HDD survey results

2009's HDD survey results

While HDPE pipe remains the most common type of product installed via HDD utilized on roughly 36.8 percent of projects, advances in pipe design have made PVC and ductile iron pipe installation practical and cost competitive. In 2008, PVC pipe was used on 24.1 percent of installations and ductile iron 12.9 percent. Steel pipe installation jumped to claim a 20.9 percent share, not surprising due to the increase in oil and gas pipeline installations. In keeping with its continued diversification, projects experimenting with other types of pipe materials occurred on 5.3 percent of the work.

With maturity and stability of the primary HDD equipment, the used rig market has developed into a viable – and needed – industry segment. More than 46 percent of respondents say they have purchased used rigs and almost 50 percent indicated they would strongly consider buying a used rig for their next purchase.

Bumps in the road

Challenges abound for the HDD market, for both small and large rig markets. As discussed earlier, pricing continues to plague the market. A Midwest contractor summed up the problem: “With a growing number of contractors owning HDD equipment, it is important not to undercut each other, but to keep per foot prices high enough to cover maintenance, upkeep and eventually machine replacement while still producing a yearly profit.”

HDD Units Manufactured and Sold