HDD Maxi Rig Update:

With so many technological advancements constantly driving the equipment side of trenchless construction, the maxi rig market seems to draw significant interest due to the sheer size of drill rigs and bore length capabilities. Today, there are numerous manufacturing companies dedicated to building these drills for the maxi rig market, as the drills themselves have become as sophisticated as mid-size rigs.

While the economic downturn over the last few years has had a noticeable impact on construction equipment sales, experts say the maxi rig market has retained steady growth due to its critical application in the oil and gas industry. Because of the shale plays in North America, the location of jobs has shifted and there is more work being undertaken in non-traditional areas. Trenchless Technology recently spoke to a handful of rig manufacturers to learn more about some of the recent trends in applications and sales in the maxi rig market.  

In terms of sales, Mike Fry, sales manager at maxi rig manufacturer Universal HDD, said the trenchless market has not been hugely affected by the recovering economy and that work has even increased in some areas, stressing the growth of the oil and gas industry.

“HDD is a time- and money-saving method of construction that limits the excavating work and minimizes environmental impact,” Fry said. “In the past few years, the country has seen a sudden surge in oil production from previously inaccessible shale formations using the process known as hydraulic fracturing, or fracking.

“With the backdrop of the nation’s economy on the threshold of recession and concern of its negative effect on utility construction and rehabilitation projects, underground construction is steady and seems to be generally unaffected. Oil and gas demand is driving the need for upgraded expansion in these markets and the future forecast is steady growth through 2015.”

However, one economic issue in the North American market is banks, according to Dan Sharpe, vice president of sales and marketing for American Augers.

“A contractor with decent credit finds it very painstaking to get a loan,” said Sharpe. “Four years ago it would not have been an issue, but now the banks want documentation on top of an already incredible amount of paperwork. This makes the whole process very cumbersome.”

Technology and Applications

Technology has driven horizontal directional drilling since its beginning some 40 years ago. Over the past decade, continuous advancements in technology have allowed the process to become more accepted as project engineers are less skeptical in specifying HDD methods.

Maxi rig work in particular, requires longer bore design with larger capacity pipe common in river crossings, for example. Ground surface obstacles, environmental impact considerations and the overall bore design dictate equipment with maximum power and a smaller footprint.

“Today, drilling jobs are getting longer and more complicated,” said Sharpe. “This requires better locating equipment, bigger mud pumps and bigger and better cleaning mud systems that can keep up with the drill. The big driver has been the shale gas plays. As long as this continues it will help the maxi HDD market. It always comes down to a contractor having work for the rig.”

Paul Ebersole, who works in sales and business development for DW/TXS Construction Equipment, agreed that the overall market is growing due to the increase of shale plays and said more than half of all maxi rig owners in the United States have probably been involved in one of more of those shale plays.

“With all of the pipeline work going on in the U.S., the struggling economy hasn’t really affected the maxi rig market,” Ebersole said. “In fact, this market is being sought after by more and more mid-size drill owners due to the abundance of work.”

Ebersole also said another major change in the market has been the increase in the number of manufacturers offering maxi rigs.

“This market used to have just a few big names involved in it,” he said. “These companies were the ones that were known for the big river crossings, such as Cherrington, Michels, Laney, Mears and only a handful others. It seems more and more companies have worked their way into this market. There seems to be numerous companies able to complete the long shots and large diameters.”

Challenges and Environmental Impacts

Even with the market seemingly intact, there are always important issues facing manufacturers and drilling contractors in the field when it comes maxi rigs. Safety is always a primary consideration on a drill rig. These drills have big operations with many crewmembers and finding the best ways to go about improving operations and efficiency without sacrificing safety is critical in maintaining profitability. Ebersole said fuel costs are also a big issue as maxi rigs have several high horsepower diesel engines running at all times.
“Fuel consumption could be up to 600 gallons a day,” he said. “Six hundred gallons at $3.50 per gallon adds up very quickly, especially on a 30-day job. Add that up and that is a $63,000 bill for one month.”

Jon Heinen, pipeline business unit manager at Vermeer Corp., said the shortage of skilled laborers is another critical issue the industry is facing today and said there needs to be an emphasis on finding and nurturing the next generation of qualified maxi rig superintendents and operators. Heinen also mentioned the effects of EPA emissions standards on the market.

“Machines operating in certain parts of the U.S. have needed to be repowered with new Tier 4i compliant engines,” Heinen said. “It’s not a simple engine change, it’s a whole package change. Tier 4 compliance requires a change in hydraulics, drivetrain and electronics. In the end, the cost of the machine increases, which is incurred by the contractors. At Vermeer, we are working tirelessly to provide a clean and environmentally sustainable drill while also minimizing the impact on the customer.”

Optimism Looking Ahead

In reference to current jobs, Heinen also agrees that the critical application in the use of maxi rigs is in the oil and gas pipeline industry and the outlook for the near future seems to continue this trend.

“We are also seeing a trend in maxi rigs used in urban settings,” Heinen said. “Where traditionally we would see a maxi rig on a river crossing or a rural area with urbanization and the type of pipelines being built, we are seeing the need for these large rigs within city limits. This trend opens an entire new set of challenges that contractors face. Within urban settings, you have to consider and make accommodations for logistics, noise, footprint, right of ways, etc.”

Despite the challenges contractors might incur working in congested areas, the application of maxi rig drilling in urban settings is just another factor that shows the market is on the rise. And while EPA mandates may continue to delay projects or drive up the cost of rig designs, industry professionals seem optimistic the maxi rig market in North America will remain strong. Driving this optimism is the work in oil and gas pipelines, particularly in the shale plays and project boom that has resulted, allowing the possibility of the U.S. eventually becoming a global player in the energy market.   

According to Randy Rupp, senior product manager for Ditch Witch, the vast majority of maxi rigs are working on energy-related jobs.

“Much of the natural gas and oil being discovered today is in non-traditional oil areas,” he said. “Therefore none of the pipelines or other infrastructure is in place. There are still those water, sewer and cross country fiber jobs, that need to cross rivers, mountain ranges, swamps, and major highways. These all require the power and precision of maxi rigs. A real test for the future will be to see if all the players can stay profitable if or when the oil boom slows.”

Andrew Farr is an assistant editor of Trenchless Technology.