Drilling markets change just like the market for new cars and trucks.
|By Gary L. Hix, CWD/PI, RG
It has taken me many years in the water well drilling business to realize just how true this simple statement is: Water well contractors must stay on their toes in order to keep track of the changing trends in drilling services.
Those who can and do change their approach to finding work survive better than those who haven’t changed the services they offer to match the current demands.
So what drives well drilling markets? The housing economy, environmental regulations, and climatic changes are at the top of my list.
I think back to the 1970s and 1980s when it was economic growth and the construction of so many new homes that drove the demand for domestic house wells and large municipal wells. This was most noticeable in the South and West where population migration was taking place.
A favorable economy created the demand for groundwater development, and to some extent, brought the demand for agricultural wells along with it. I came into the well drilling industry in 1977 when NGWA was known as the National Water Well Association, and water well drilling was definitely the name of the game.
Then in the mid-1980s governmental regulations and concerns over groundwater contamination brought about the rise in environmental drilling services. Throughout the early 1980s, I was designing and offering water well drilling contracts for a municipal water provider, but we soon switched to offering monitor well drilling contracts. I remember attending the tremendously successful NGWA outdoor action conferences and seeing the development of new methods and new drilling equipment for this active market. We were all learning how to drill and construct groundwater monitoring wells.
Finally, in 1991 I jumped into this market myself, creating my own environmental services company. For a while this was the hottest drilling and well service market. But it didn’t stay strong forever. Some domestic drilling contractors got off to a good start in this market, and have survived by adapting to the changing environmental services’ needs. Specialized drilling rigs and sampling equipment is required to be successful in the market. It’s no longer a market a domestic well driller can just jump into.
We experienced a resurgence in the demand of municipal well drilling services in the Desert Southwest in the later 1990s. The new housing market was strong in the West, creating a demand for developer-financed municipal supply wells. As contractors, we were seeing contracts for drilling half a dozen deep, reverse-rotary municipal supply wells.
Business was good for a few years, but the housing boom didn’t last and neither did the demand for new municipal wells. Reverse-rotary drilling contractors had to find new markets to stay alive. Residential house well drillers did too.
A new market for drilling services developed when ground source heat pumps came into popularity in some states. This borehole drilling service has helped many water well drillers maintain their services when domestic water wells were not being drilled. Another niche market for drilling services that kept some small contractors’ machines active is the cathodic protection installation. These two markets are not well drilling per se, but they utilize the same machinery and personnel.
By the time the turn of the century came around, the country was universally concerned about the areas where drought was having a dramatic effect on both surface water and groundwater aquifers. Texas and California were being hit especially hard, so municipal and irrigation water well drilling took off again. Water well contractors from many western states moved their drill rigs to California to get in on the demand for groundwater wells.
The market may not be quite as strong today as it was a few years back. As concerns for dwindling groundwater resources rose, farmers saw they could move their operations to neighboring states like Arizona and Nevada. Drilling contractors are now moving back home to fill the demand for new agricultural water wells in these states.
A good comparison over the rise and fall of water well drilling services has always been the oil and gas well drilling industry. While the purpose and the commodity of these two drilling services is vastly different, they seem to be connected at the hip for personnel, support equipment, and innovations in drilling techniques.
Look at how far water well drilling equipment has advanced in the past 50 years. Many of the advances have come from developments in the oil and gas industry. These advancements are most evident at NGWA’s annual Groundwater Week, which takes place this year December 4-6 in Las Vegas.
The history of our country and the markets for well drilling services are seen on the covers and is written in the pages of NGWA’s publications—Water Well Journal, Groundwater Monitoring & Remediation, and Groundwater. Well drilling markets change just like the market for new cars and trucks. What’s a popular model today may not be the same model we see in the future—and that determines the market.
I wrote in the September 1991 issue of WWJ diversification was the key to staying healthy in the changing drilling market. Today I’m more inclined to say trim down your business, modernize your brand of services, sell the old iron, and get the latest equipment designed to fit the evolving markets of tomorrow. Your old market may come back around again, but by then your old equipment will be out of date and unusable.
I wonder what will be the hottest market for well drilling tomorrow? Who knows—perhaps it will be water well drilling on the planet Mars.
Gary L. Hix, CWD/PI, RG, is past president of the Arizona Water Well Association and a former licensed water well contractor in Arizona. He is a member of the NGWA Education and Outreach Subcommittee and has authored many articles on subjects related to well drilling issues for Water Well Journal. He can be reached at email@example.com.