2021 North American Microtunneling Review – Microtunneling Market Strong in North America

Trenchless Technology’s annual Microtunneling Review section highlighting recent projects and developments in the North American microtunneling sector.

The microtunneling market is steady and healthy in North America, according to experts in the field. As larger and more complex projects have been competed, project owners are becoming more comfortable with the steerable pipe jacking technology.

However, there are some challenges in the market that could hamper growth, such as labor shortages and project backlogs.

Tom Pullen, who has broad experience in microtunneling as an associate with Brierley Associates, describes the market as cyclical and currently dominated by a numerous shorter microtunneling projects.

“You had your cities with big CSO programs driving the market, and now we’re starting to see smaller programs come up,” Pullen says. “These projects are not the headline-making microtunneling projects, but a high volume of projects that are sustaining the market.”

Comfort and familiarity with the technology are driving the market forward, Pullen adds. While smaller projects may not be as glamorous, he says they represent a “critical path” and are integral to the success of the project and the industry at large.

“You don’t want to overlook any project,” Pullen says. “Even though it might be a smaller crossing, it’s still a critical path. One hiccup or black eye on those can really hurt the market.”

In addition to “pent-up demand” from the 2010-2014 housing recession that affected funding for municipal projects, another factor that is driving the microtunneling market is technological advances, according to Lester Bradshaw, president of Bradshaw Construction Corp.

“Technology advances in microtunneling being accepted by owners and engineers,” Bradshaw says. “Drive lengths increasing to regularly over 1,000 ft, curved drives being designed and or accepted as VE changes on projects, industry knowledge of microtunneling spreading throughout the marketplace, expanded ground conditions for the microtunneling application and expanded diameter of microtunneling with 8-10 ft diameter becoming common.”

Additionally, expanded knowledge in general are helping to improve the market, says Jason Holden, vice president and chief revenue officer for Akkerman Inc.

“A solid understanding of when, where, and how to apply the microtunneling method is a key to a successful installation,” Holden says. “There are several educational opportunities throughout the year along with many great resources just a few clicks or a phone call away. Just like anything, knowledge is power. The more we understand how trenchless systems work and why the equipment is designed to do what it does, the better we can select the right tool for the job.”

While microtunneling is a trenchless method that can be used in any region across North America, Holden says there is some variation in where the market share of projects is concentrated.

“Nearly 95 percent of microtunneling projects are funded through municipal, state, county and federal funding,” Holden says. “In the past five years, there has been an uptick in the trenchless market in states such as Texas, California, New York, Illinois and Florida.”

Holden adds that those states are also slated to get a larger percentage of funding passed down through the Infrastructure Bill that as of press time was still being debated in the U.S. House of Representatives.

“Even though we don’t know the final outcome of the infrastructure package at this time, we can be certain that the passage will stimulate growth for the future of our industry across all of North America,” he says.

Focusing on microtunneling technology itself, Pullen adds that geology is another major factor in how the market varies from state to state and region to region, in addition to population and the density of existing infrastructure. Because microtunneling can go deeper than other trenchless installation methods, it can be advantageous in urban settings where the utilidor is dense, such as New York City.

Compared to other parts of the world, Pullen says that the North American microtunneling market is continuing to develop.

“The contracting and engineering framework is different here than it is internationally,” Pullen says. “In North America, during the last five to 10 years, there have been alternative delivery methods that encapsulate the engineer-contractor framework and the sharing of risk. Internationally, that’s the way it’s done. We’re getting better in North America, but we still fall short there in the sharing of risk vs. how they do it internationally. We need to do a better job of working together to accomplish common goals.”

Bradshaw sees changes in the contracting method as one of the greatest trends in the microtunneling market.

“We see the proliferation of design-build with guaranteed maximum price contracting, which places enormous risks on the contractor design-build team,” Bradshaw says. “Often, the microtunneler is a subcontractor on such design-build teams and had to recognize that they are often the riskiest part of the project, yet may not have the contract protections they are used to.”

As the microtunneling market has evolved over the last 10 years, the market has also experienced increased availability of new technologies and improved capabilities. One such development is the increased quality and availability of jacking pipe, says Rory Ball, senior project manager at Wade Trim.

“The availability of better jacking pipe,” Ball says, “is one of the main aspects of what has benefited the microtunneling market in North America, leading to more challenging geometry in projects.”

Ball also highlights advances in underground survey controls and the equipment itself, leading to better data management during the last decade.

“With the way that the market is, the more quality successful projects there are and the more that owners are exposed to microtunneling, then the more comfort there will be with the technology in the industry,” Ball says. “We still need better education in the industry, through conferences, white papers, seminars, workshops, brown bag lunch-and-learns. There seems to be an understanding in the industry during the last 10 years that sharing knowledge benefits everyone.”

Like every other business, the COVID-19 pandemic has led to some challenges in the microtunneling market, Ball says, most notably regarding the uncertainty surrounding available materials and cost. Additionally, social distancing measures have resulted in fewer people visiting jobsites.

“Some challenges are a little more logistical in nature,” Ball says. “There have also been less visitors on jobsites, and I don’t think that’s a good thing. It’s good to have owners and engineers out and see projects being built. It’s better for everyone’s knowledge. On the logistical side, companies are keeping people in smaller cohorts or groups on jobsites. The implementation of these measures is less ideal for efficiency, but necessary to reduce the shut down of a project.”

Pullen adds that the impact of the pandemic on the supply chain has led to reduced effectiveness and efficiency, conditions which continue to persist today. Furthermore, the pandemic has interrupted training and the availability of skilled labor in the microtunneling field.

An additional challenge facing the industry, Pullen says, is unreasonable cost projections on the front end of project planning, when microtunneling is first expected to be used.

“When cost projections are communicated to the sponsor or utility company, in a design-build scenario for example, the costs are developed through the design phase, and that is when it is realized that the early cost projections are incorrect,” Pullen says. “And the project just dies because the cost was not anticipated [from the beginning].”

Despite these challenges, Holden believes that the short-term and long-term outlook for the microtunneling market in North America are positive.

“The short-term outlook appears to be good,” he says. “Several contractors are busy with backlogged work to perform into early 2022. The increasing cost of consumables by as much as 25 percent or more will affect contractors with existing obligations while potentially delaying new starts.”

Holden says the Infrastructure Bill could impact the long-term outlook.“The long-term outlook is expected to be very positive,” Holden says. “The highly politicized infrastructure bill has emphasized the importance of the trenchless industry in North America and the future passage of the bill will ultimately create new funding for future water and sewer programs.”

Bradley Kramer is managing editor of North American Oil & Gas Pipelines and a contributing staff editor for Trenchless Technology.

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