Future Outlook Improving for Oil Industry Directional Drillers

HDD contractors and manufacturers are seeing uptick in pipelines going in and more is expected
Future Outlook Improving for Oil Industry Directional Drillers
An American Augers DD-660RS directional drill on the site of a pipeline construction job.

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It was just a few years ago that the oil industry took a downturn and the price of crude oil plummeted. Oil rigs shut down, and pipeline construction slowed to a crawl or stopped.

“Oil prices started falling and everybody started burning the furniture and everything kind of stopped,” says Kenny Clever, vice president of sales and marketing for American Augers. American Augers is a manufacturer of directional drills with over 100,000 pounds of pullback and has many of its customers working those pipeline construction jobs.

“We, as manufacturers, sat around and wondered at what price would things start picking up again, $65 or $70 a barrel, maybe even $80,” Clever says.


Even with current oil prices still under $60 a barrel, the industry has begun to see work pick up again, but not to the levels of a few years ago.

“What we saw was that once we had a change in our administration here in the U.S., we’ve seen an upturn in the projects,” Clever says. “We had someone come in and say we’re going to complete these projects and we’re going to deregulate. That got all these major pipeline companies thinking that now is the chance.”

Clever believes pipeline companies assume they have the next 3 ½ years to get as much pipe in the ground as quick as possible. “They’re bringing back-burner projects to the front-burner now and we’re seeing a lot of pipeline activity again and that’s a very good thing for the industry.”

Several pipeline-building projects are in motion, including the Atlantic Sunrise (a $3.2 billion project on the East Coast), the Mariner Pipeline going across Pennsylvania (a $4.7 billion project), and the Rover Pipeline project from Pennsylvania up to Ontario, Canada (a $4.2 billion project).

“We talk about these projects and a lot of them are natural-gas-type projects, so you see large-diameter steel pipe, big rigs and river crossings all taking place,” says Dr. Samuel Ariaratnam, professor and construction engineering program chair for Arizona State University. “In my discussions with some of the drillers that have those big 100,000-pound machines, they are all pretty busy. All of their machines are out.”


While the numbers are heading in the right direction, manufacturers are saying there is room for more work to come back. “The last three or four months of this year, we have seen a jump-start in North America, primarily the U.S., and we expect that to slowly continue to increase,” says Todd Michael, product manager for trenchless products for Vermeer.

Manufacturers are seeing improvements in the Gulf Coast areas, but admit that Canada is lagging.

“Talking to some pipeline owners in our dealer network, they believe that it’s more regulatory problems with the government in Canada that’s holding the industry back there,” Michael says. “They’re looking for some changes up there like we had here to deregulate some of those pipeline projects and get them jump-started again.”


Clever and Michael are both excited for what the future holds for the directional drilling market in the oil industry.

“Right now, the heartbeat is right here in North America and primarily in the lower 48,” Clever says.


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