The panel consisted of
Jeff Boschert, National Clay Pipe Institute (Midwest)
Dennis Doherty, Haley & Aldrich (Northeast)
Chris Sivesind, Akkerman (Pacific) Northwest, Western Canada)
Victor Rivera, Hobas Pipe USA (Texas)
Richard (Bo) Botteicher, Underground Solutions, Inc. (Rocky Mountains)
Matthew Wallin, Bennett Trenchless Engineers (California)
Piero Salvo, GAME Trenchless Consultants (Eastern Canada)
How is the trenchless market in your region? What is the market potential?
Matthew Wallin: In California, the market is growing. There is no question trenchless is going to keep increasing in usage. Aging infrastructure is a very real problem, and there is more and more infrastructure continuing to be built. As these structures need to be repaired and replaced, trenchless becomes the way to work on those projects where you couldn’t otherwise. So, there is no question that we are seeing growth. Additionally, we are finally starting to see a return to new sanitary sewer construction. Large diameter pipe jacking and microtunneling really slowed down during the recession, and our assumption is that that was largely tied to the weak housing market. When that market dried up, a lot of the big interceptor programs — and large-diameter microtunneling and tunneling projects — went away. The HDD market stayed steady during that time, but it is great to see an increase in new sewer construction.
Bo Botteicher: The trenchless market is growing and growing quickly in the Rocky Mountain region. We have technologies and methodologies that have been around and used for years now. They are proven technologies — cost-effective, applicable, adequate materials and methods. They are improving all the time, but they are also proven.
As people continue to understand them and look at the body of successful trenchless work in the region, that trend will continue. The other aspect of market growth for trenchless in the Rocky Mountain region is the desire to know “What’s next.” What’s new? What’s coming out? What is going to solve our infrastructure challenges faster, take less time, less money and use improved materials? Everyone is always interested in the latest and greatest. I feel like there is even more interest now than there was in the past regarding emerging technologies. Certainly in the Rocky Mountain region I can point to the 2015 No-Dig Show in Denver that shattered attendance records. That event showed just how excited people in our area feel about what is available and what’s coming next in trenchless infrastructure trends.
Dennis Doherty: For us, the energy markets are booming. There is significant growth in the gas and electric markets. In fact, the electric industry is grabbing ahold of trenchless big time, in large part because they are replacing overhead wires connecting the mainland to the barrier islands and putting them underground. This is leading to some significant projects that can span well over 10,000 ft. In the gas industry, collection and transmission work stemming from the shale plays is still driving a lot of work. There are several large gas companies that are building transmission lines coming into the Northeast as they look to replace coal-fired power plants with gas. There are also several long power transmission lines coming out of Quebec going down into New York and New England. I am looking at a project now that is $1.6 billion with 60 miles of underground pipeline and about 60 crossings. With all the successful work, trenchless is getting more and more accepted and more and more demanded.
Chris Sivesind: The market in my region is certainly growing, due to several infrastructure initiatives throughout a lot of the cities I represent in Canada and the West Coast. Edmonton has a neighborhood flood mitigation project in progress that could potentially include some trenchless pipe jacking work. Calgary is doing a major sewer construction program that includes several microtunnels. Vancouver has a very large storm sewer separation plan going on that includes $35 million worth of work annually in separation alone. Seattle has a lot of market potential for trenchless growth because of the expansion of their light rail system and the resulting need for utility relocation.
This light rail system will continue to expand through Seattle over the next decade, along with a huge potential for relocation and relining, and whatever else is needed. In Portland, meanwhile, they finished their new sewer construction program and are turning to rehab, including pipe bursting and CIPP. Away from the coasts and major cities, however, things are not quite as active.
Victor Rivera: In Texas, we are seeing overall growth, especially in Central and North Texas. The trenchless market has been fairly steady in Texas for quite some time. There are cities either under or in the negotiation phase of a consent decree from the EPA, and that creates even more growth opportunity above what these cities are already doing on the rehabilitation side. New construction is starting to come back around, as well. New technologies are creating additional trenchless opportunities, as well.
Piero Salvo: Outside of our industry people seem to think the construction industry is slowing down, but on the trenchless side it is booming. In Canada, our newly elected government has announced an annual investment of $2 billion over the next three years for underground infrastructure. There has been an emphasis on trenchless in the cities, as well. Montreal and Toronto are calling multi-year contracts for CIPP lining for water and sewer. These are multi-year and multiple contracts in the range of $6 million to $10 million per contract. The market potential is huge and more contractors are coming into the market — and this is from coast to coast. In the west, there is more tunneling and pipe bursting. In the east and central part of the country, there is more cured-in-place lining, but I think you will see that migrating over time.
Jeff Boschert: In regards to pilot tube tunneling/guided boring, 2014 and 2015, were incredibly busy with projects from Hawaii to the Midwest to the East Coast. Even on the open trench side, we saw a lot of work with projects and new markets all over. It is an exciting time all the way around.
What particular market sectors are driving trenchless in your area? Are there any applications in your area that may not be common elsewhere?
Wallin: For us, what has been driving the business in the last few years is gas transmission and distribution — specifically PG&E in northern California, but other gas companies have similar programs going on. They are spending a lot of money on rehabilitation and replacement of the existing infrastructure, which results in a lot of HDD projects for river and highway crossings. A lot of this work was spurred by the San Bruno incident that forced the gas companies to really take a look at the state of their infrastructure. Another market that is starting to grow and seems like it is going to be a big segment going forward is recycled water. In southern California, which is largely a desert, there is not enough water, yet treated effluent is just flowing out to sea. Finally, cities are starting to realize that they need to be using this water and there are new water systems being built to convey recycled water. This isn’t about augmenting a system or replacing parts of it, we are building brand new water distribution systems from scratch from the wastewater treatment plant. Whether the water is being put back into aquifers or used for irrigation, it requires the construction of fairly large diameter water mains coming from the treatment plant, and there are new crossings all over the place. Given the water issues in California, this type of work will only grow.
Botteicher: We also see recycled water projects in the Rocky Mountain region, and it is a big market for trenchless methods because a lot of new piping needs to be installed in areas that already have established infrastructure. I would say that the biggest driver for the Rocky Mountain region is the fact that our piping systems are getting older and need to be rehabilitated. Of course, that is not unique to the Rocky Mountain region. In fact, strictly in terms of age, our infrastructure is relatively young compared to other areas of North America. One unique market sector in the region that drives trenchless growth is the engineering expertise centered there. There are many national and international consulting firms with offices in the region, like CH2M and MWH who are headquartered in the Denver area. It has been interesting to see those entities gather the experience and drive the growth of trenchless consulting, while at the same time driving the growth of the market as a whole.
Doherty: In the East, EPA consent decrees have been driving the municipal market for a long time. That work is still steady but it is starting to die out a little. The electric market, however, is absolutely booming.
Sivesind: The trenchless drivers are different in each city and specific to the projects in that region. One trend we are seeing on the new installation side is that crossings are designed for longer distances and with larger diameter pipes. In some cases, the trenchless method or the product pipe is being dictated by the larger diameters. We are continuing to see demand for guided boring; the relatively small footprint, wide variety of pipe diameters and multiple pipe types the equipment can install makes this a wonderful new installation method.
Rivera: What is driving trenchless in our area is the aging infrastructure and the consent decrees that are being implemented, with trenchless continuing to be applied more and more. This type of work has been consistent over the years, but we are seeing more programs being rolled out. The larger cities are starting to take a more proactive approach and are implementing term contracts for assessment and rehabilitation. Term contracts are becoming the norm because there are so many miles of pipes and this is the quickest and easiest way to address the problem. While aging infrastructure is driving the market, we also have a growing population so we are going to see some new construction, as well.
Salvo: Montreal is the leader regarding CIPP lining for water mains. The city has made a commitment to rehabbing its pipes and is addressing 2 percent of its pipes per year. Another factor leading to the growth of trenchless is that technology has evolved to be able to rehab bigger pipes. Now with CIPP liners you are not limited to the 6- to 12-in. range; you can get to the 20- and 24-in. range and larger. And the same is true with pipe bursting. The limits are being pushed every single time, which helps the industry. Aging infrastructure has been a driver but also there are more and more contractors available and more and more jobs being bid, so the market just continues to build off itself. There has to be a commitment on the part of the owner to bid jobs that are large enough to make it meaningful for the contractor. Don’t call a 300-ft job, for example. Have a contractor come in and do 2,000 ft, 3,000 ft or 30,000 ft.
Boschert: A big driver in older cities over the years has been the move toward the separation of a combined gravity system. Many of these separation projects were bid with trenchless and open-cut options, and in many cases trenchless — specifically pilot tube/guided boring — came in as the cheaper option, especially in cases where you had weak soils, deep cover depths, existing utilities, limited surface availability or when surface disruption needed to be minimized. From 2012 through 2016, there have been 108 pilot tube/guided boring projects alone.
What are the predominant trenchless methods being used? Are there methods that are not being used that perhaps are common elsewhere? Is your area leading the way in some in a particular area?
Wallin: HDD has been leading the way with the work that we have done in California. There has been tons of it — forcemains and some siphons on the wastewater side, and gas transmission projects all over the place. But we are also seeing more use of hybrid methods. As pilot tube has emerged, people are realizing what they can do with it, both as a stand-alone system and in combination with auger boring and pipe ramming. By using hybrid methods, you are able to take advantage of the auger boring method while achieving line and grade accuracy for gravity sewer projects. On the flip side, we have not seen much in the way of Direct Pipe installations in California. It has been used quite a bit in Canada and other parts of the United States including the East and South, but not much in California yet.
Botteicher: In the Rocky Mountain area, there seems to be a large demand for pressure pipe renewal options. End users and engineers are interested in what technologies are out there and what they can do in terms of extending asset life. It is interesting to see what people gravitate toward and what they think is the best value in terms of methods, with value being defined as the additional, practical asset life extension for a given cost. At the end of the day, if you are looking to renew infrastructure, you have to look at it as a value proposition — How much bang can you get for your buck? What is the lifetime we can expect to get out of this renewal or replacement? Decision-makers choose different options based on this value proposition and for the trenchless industry, they are always looking for new and different ways to drive that value proposition into more favorable territory.
Doherty: In the Northeast, CIPP is the by far the most common rehab method. It is relatively simple and low cost. But there is still demand for other methods, including demands from the public. In one case, citizens wanted us to do an HDD harbor crossing instead of routing high-voltage cables on land. One thing that is somewhat unique to our area is in-line microtunneling. It is not used too much, but there are applications for it when you have a pipe that is capable of being consumed by the microtunnel boring machine and when you have very limited space in the street.
Sivesind: While HDD and CIPP are the predominant methods in the Northwest, like much of the country, there are two methods of construction specified here that I haven’t seen used much elsewhere. One is guided pipe ramming. We have lot of cobbles, boulders and glacial material in this region, so guided pipe ramming can be quite beneficial. The other method is using a pilot tube machine to probe an alignment to see if there are obstructions. In California there was an instance on a microtunneling project where there was a threat of potential pilings on a harbor crossing. They used a pilot tube machine to drill as far as they could — about 500 ft — then went out from the other side and did the same thing. The project was a 72-in. microtunnel and they did nine probes around the perimeter of the tunnel alignment. In one case in Vancouver, the probe hit an obstruction, and the alignment was moved over a foot and completed successfully.
Rivera: On the sanitary sewer side, the predominant methods we see are the established technologies — CIPP, pipe bursting and sliplining. With the aging infrastructure, existing larger diameter interceptors are starting to be addressed. The City of Houston has recently completed a 120-in slipline project. In the smaller diameters, CIPP and pipe bursting are commonplace, and that is where you are seeing most of the term contracts issued. I think as a result of the term contracts, we now have pipe bursting contractors and CIPP contractors established in major cities. In the past, we would see limited amount of pipe bursting and CIPP contractors following the work. Texas’ mostly good soil conditions allow for microtunneling and HDD applications to be considered more often.
Salvo: For us in Canada, CIPP is predominant. For water rehab, Canada is the leader by far. I don’t think the United States is even close despite the fact that there are many more miles of pipe. There are huge contracts in Montreal and Toronto — on the order of 30 to 40 miles per year. Part of that has to do with the depth of our pipes to keep them below the freeze zone, which makes open cut replacement a more expensive option. Also the fact that it has become so commonplace it just kind of keeps building on itself with new technologies and more contractors. One area where we are seeing growth is in UV-cured CIPP, especially for culverts but also for sewer lining, as well. UV is beginning to take more market share.
Boschert: For rehab, clearly the predominant trenchless method is CIPP. On the new installation side, HDD is the predominant method. My primary focus is on gravity flow sewers, and for those, oftentimes HDD is just not applicable because of its guidance system creating ups and downs in the end product. For installation of a gravity flow pipeline, the general rule has been to use a close tolerance guided system for any slope flatter than about 3 percent. Holding solids due to sags in a gravity flow pipeline is unacceptable. The pilot tube/guided boring and even the hybrid methods seem to be really booming, which is exciting for the whole industry.
How developed is the trenchless market in your area? Is there a sufficient number of contractors and engineers to do the work? How is this changing?
Wallin: California is an interesting animal. It is a lot like Texas in the way that it is bigger than a lot of people realize. If you are not from the West Coast, people think of California as San Francisco, Los Angeles and San Diego. In those areas, and in the Sacramento area, trenchless is very well known and you have a lot of sophisticated owners that have been using trenchless for a long time. They understand the methods pretty well and they know how to accomplish big programs using trenchless. But there are huge parts of California — the Central Valley, the Sierra Nevadas — where you have a mixed bag. Some owners know and use trenchless while others are just getting started.
It is actually kind of exciting for a company like ours to get to work with owners who are doing their first trenchless projects and helping them understand the methods, what they can do and how to use them properly. There are experienced contractors for the more established methods such as auger boring, microtunneling, pipejacking, and HDD, but not as many for pipe ramming and pilot tube. We also run into some instances — both with owners and consultants — where they know just enough to get themselves into trouble. They may know that a certain crossing may need to go trenchless, but they don’t allow for proper setbacks, adequate work areas, enough vertical cover, or other considerations that need to be accounted for to build the job successfully. If the methods are not applied properly, it gives us as an industry a bad name. So we still have a continuing job when it comes to education.
Botteicher: Demand for more understanding on what methods are available and applicable is at an all-time high in the Rocky Mountain region. Again, the 2015 No-Dig Show in Denver was a huge draw due in large part to a massive amount of regional participation. People want to know more about trenchless and they are very progressive when it comes to trying something new. They accept the tried-and-true methods, but they are open to trying new methods, as well. In terms of education, NASTT plays a key role. If you want to drive the overall value for stakeholders, you need to have a sounding board that provides a repository for all things trenchless, and most importantly, industry representation that is commercially unbiased. NASTT’s participation plays an important role in developing the trenchless market in the Rocky Mountain region.
Doherty: We have the same problems on the East Coast that they do in California. We have large, older urban areas that are much more sophisticated and they understand trenchless and the consultants that service these larger urban areas also understand. But, surprisingly, there are spots where they are not well versed with trenchless. In some cases, you have consultants taking on jobs with no understanding of what can and can’t be done. So a big issue is developing and training engineers. I just cannot find young engineers who can step in and do the work. We do have student chapters, but I think we need to be doing more to train students. And the thing is, trenchless is such a great field for engineers —you deal with electrical, mechanical, chemical, plastics, civil, structural and geotechnical engineering — it is all there! But we are not bringing along the young engineers to be able to do the work that needs to be done. And that is going to hurt us. I spoke at UMass-Lowell student chapter for civil engineering recently and they were really excited when I was explaining to them about the different jobs involved. I am hoping to go back there and start a trenchless student chapter and hopefully even do some seminars there.
Salvo: I teach a trenchless course and I think I am preparing them for work. I randomly select groups so they are working with totally different people and not friends. I force them to present and do research. I have taught about 400 students in the last six to seven years, and 15 to 20 of them have jobs in trenchless. For me, some of what may be lacking is a lack of field experience. There are students doing some really great research, but there are not a lot of co-ops or internships available where they can get field experience.
Sivesind: In the Pacific Northwest, we seem to be fairly progressive, particularly in terms of engineering experience. We have several large engineering firms, as well as specialty firms, that have a strong presence in the region. That is reflected by some of the projects — including one of the projects recognized in the 2015 Trenchless Technology Projects of the Year — that are breaking new ground. Contractors within the region I represent are very willing to try new methods and enjoy adding new tools to their toolbox.
Rivera: Texas is a mature market in terms of major cities being aware and accepting of trenchless technologies, especially with established technologies like CIPP and pipe bursting. Interesting there are smaller cities that actually own pipe bursting and CIPP equipment to do the work themselves. Education is key. There is a lack of young professionals who have little to no jobsite experience. You can talk about processes and technology all day, but you never truly understand it until you actually see it.
Salvo: As far as acceptance in our region — everyone is on board. But the one thing I do find is that there is a lot more knowledge and a lot more involvement in urban area compared to rural areas. But the one thing I would like to see more of is political awareness. Ultimately, we need to reach the decision-makers. In some cases engineers will push for trenchless, but sometimes the higher-ups don’t have a priority for underground infrastructure. It is unfortunate, but I think the water crisis in Flint, Michigan, will help to bring focus to water infrastructure. We had an instance in Walkerton, Ontario, where they had contaminated water and helped push Canada forward. Walkerton had a huge impact, and Flint will have the same impact.
Doherty: At the same time you need to be careful in how you are approaching the rehab. If owners are not sophisticated, sometimes you get led down the wrong path, and that is bad for everybody.
Boschert: As far as acceptance and awareness, I think everyone would agree that educational seminars, conferences, symposiums, workshops and lunch-time presentations are really important to future growth. But I would say, generally, people are quick to accept trenchless once they understand the technology. In most cities if a new trenchless method is attempted and it goes well, owners will want to do more and contractors will be interested in buying the equipment. Once you get a few contractors in an area then they can have an influence over the type of work that is being done. More contractors in an area also tends to drive the prices down, which helps. But there are also areas where an owner will try a technology for the first time and the job goes poorly for one reason or another and they don’t want to attempt trenchless ever again. I think we can all think of a city that has done that, and it is a shame.
Regarding the number of contractors, are there enough to do the work? Are there too many?
Wallin: In California, we have a pretty developed market. There are plenty of HDD contactors and more and more entering the market, especially in the small to mid-size range. In the large category, there are established contractors who are doing the lion’s share of the transmission pipeline work. So, there is a lot of work but we are not running out of contractors. There is actually a little bit of delay in getting the work done because of backlog, but most owners are getting plenty of bidders. As far as microtunneling and pipe jacking, we seem to have the right number. That market has been pretty flat, but we have a good established group of contactors doing the work. For us it is pretty well balanced.
Botteicher: There is a chicken-and-the-egg scenario that happens with each trenchless technology that is viable and gains market share over time. With each technology, in the beginning you have risk-takers who believe in the technology and think that it will work. Then you begin to have more acceptance of the method and that acceptance drives a demand. Eventually, demand and competition create a more commoditized product and that’s when the price drops and ‘specialty’ contractors that used to be the only ones that performed the method and traveled the country, now reside in one location to serve a more regional demand. CIPP is a great example. It followed that path and today it is a commoditized product with lots of competition, and there are contractors that do it throughout North America.When I think about this phenomenon, pipe bursting pops into my head because we work with the method as a company, and it is farther back on the curve that I just described. Right now, in many parts of North America, it takes an owner to want to use pipe bursting specifically in order for it to be used. You may not be able to “want to use it” and then competitively bid it against open-cut. If you do, you may be sacrificing the hard and soft benefits of the method against the hard reality of contractor economics and the low bid. We were involved in a project in the Rocky Mountain region on which the owner wanted to use pipe bursting. However, pipe bursting was competitively bid against open cut, and because there was only a small number of pipe bursting contractors that would come to the area to do the work, open-cut won the bid. Pipe bursting was still in the nomadic phase in the region, where specialty contractors would have to come to town to do the work, while at the same time there were a lot of local open cut contractors who were hungry for work. In the case of pipe bursting, I am confident that this situation will ebb over time, just as it did for CIPP. But it makes for a nice illustration of a difficult point in the commercial acceptance of technologies in the trenchless industry.
Doherty: In our area there are a lot of good HDD contractors from mini rigs right up to maxi rigs. They are out there and they are really good. There are also a lot of good contractors that do microtunneling. For rehab, there are many, many CIPP contractors, but not a lot of pipe bursting contractors.
Sivesind: One limiting factor is the availability of qualified people to be in the field. There is some desire from local contractors to expand their operations, but skilled operators are harder to come by. But for now — from a new installation perspective — there are enough contractors and enough ability to get projects done. We are certainly not seeing cases where a job is advertised for bid but no one is available to do the work.
Rivera: Texas is a very competitive market. There are many local contractors who specialize in trenchless technologies. As mentioned before, with the consent decrees there is quite a bit of work on the horizon.
Salvo: There are a lot of jobs and a lot of contractors. One thing that I think that is lacking in our area is experienced consultants. Municipalities are going to the big firms and a lot of the big firms are learning on site. I think the cities feel more comfortable with big firms vs. a specialized firm.
Boschert: For new installations, the number of contractors is growing. Oftentimes it is because a contractor wants to expand their offerings. A microtunneling contractor, for example, may buy a guided boring rig so he can offer his customer another method. And it may be cheaper when the project conditions and soils are right for the technology. We have also seen open-cut contractors who rented trenchless equipment because they were faced with a job that was very deep or had poor soils. Many of these “conventional contractors” have become trenchless technology installers.