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Surveying the Environment

By Greg Ettling
September 27, 2001
Editor Greg Ettling talks to environmental drilling contractors about the industry.

A couple weeks ago, I had the opportunity to speak with a number of environmental drilling contractors across the country, concentrating the discussion on local market conditions and their impact on business. I'll share some of the comments that arose.

Courtesy of Environmental Resource Technologies, San Juan.

Remediation Work

"In our four-state region, horizontal remediation projects, vertical drilling for product recovery and ORC delivery are very active markets," reports Lee Shaefer, president of Sunbelt Environmental Services Inc., Springfield, Mo. "They have been on the rise for the past couple years. But the hottest market for us is geotechnical investigation - determining types of soils and geological formations. In our particular area, it's pretty critical because we're in karst topography. Determining where limestone and limestone pinnacles are located, depth to ground water of different aquifers, and other important geological and hydrogeological data help us gauge the potential for plumes to spread or move."

For the near future, Shaefer anticipates considerable opportunities in remediation projects. With all the underground storage tanks being taken out, the issue of contamination looms large. "After the tanks have been removed, a certain amount of contaminated soil also has been removed," he notes. "Typically, on three out of 10 sites, there are ground water issues to deal with. A lot of times, that involves putting in recovery wells, oil/water skimmers or GAC filtering systems. The most difficult one to deal with is the MTBE. Scientific advances are being made on how to deal with that, and as soon as it comes around, we'll be on the cutting edge of getting these things cleaned up and figuring out various methods of removal."

Finally Underway

Christine Lamprecht is president of Land Air Water Environmental Services in Center Moriches, N.Y. Her company's clients often are the region's engineering/consulting firms. "We're almost always the subcontractor to the municipalities through them," she explains.

"There's a significant amount of public work floating around," Lamprecht says, pointing to state superfund projects as the primary example. "We're involved in a lot of ongoing investigations of situations that actually have been known about for a while, but the investigations are just now proceeding." Asked why these types of projects have been delayed, she replies, "You know how the state works."

Diversity Helps

"Lately in our area, there has been a lot more work involving big city redevelopment and brownfield projects," says Cindy Knight, president of Logical Environmental Solutions LLC, Tolland, Conn. "It seems that the funding is just now coming through all of a sudden."

"We're also doing a lot of work for the Department of Transportation," she says. "With any type of roadway improvement, the department always requires that environmental drilling be performed first."

Knight reports that many of the consultants she deals with have been complaining that a lot of the work coming through the financial/lending institutions has been slow to materialize, but that it hasn't really impacted her firm that much because of its diversity. "We have a good mix of clients," she explains. "We have a lot of private sector work complemented with a significant amount of government work."

Asked what types of projects are on the decrease, Knight says, "In the past year or so, it seems the Phase II-type work has dried up a bit. When we first started out (six years ago), we were doing a lot of that but there's not too much of the Phase II or Phase III work around here these days. Either people aren't buying property or the banks aren't as willing to lend the money anymore."

Looking ahead, Knight again points to big city redevelopment. "Hartford is planning a lot of work, and the bigger cities in the state are trying very hard to secure federal monies to get spruced up and modernized. Over the past 10 years, it's something that's been talked and talked to death. Now, all of a sudden, the money is starting to show up and things are starting to happen."

Spreading Out

Kari Sever, manager/soil scientist at Horizon Environmental Drilling LLC, Agra, Okla., tells us how her company has evolved in reaction to ever-changing market conditions in central Oklahoma.

"Back in 1999 and 2000, we were doing a lot of abandonment work; that's basically over with now," she relates. "Today, we have many clients asking for 4-inch monitoring wells. And a lot of that is private industry - industrial."

We hear so many accounts of water well drilling contractors branching out into other markets - such as environmental drilling. Horizon is doing it the other way around. "We are starting to branch off into water wells - largely because so much of our work is out-of-state," Sever explains. "We go to neighboring states like Missouri, Arkansas, Kansas and Texas for many of our big projects, a lot of which are Army and Air force base jobs." Oklahoma isn't a very active market for environmental drilling right now, forcing the company's hand to go out of state to perform the work in which it specializes. "So locally," Sever explains, "we've concentrated on building up our water well business."

Winding Down

Jennifer Pattison of Wayne Environmental Drilling Inc., Lincoln. Calif., says that her company is undergoing considerable change as the market for its environmental services is drying up in that part of the world. "For years, we were installing monitoring wells, but now we're down to the occasional underground storage tank fund job and going back to abandon those wells we already put in. This winding down process has been underway for at least three years in this particular area - probably longer."

"The next big trend is going to be the geothermal heat loop," she predicts. "But it's taking a while to get going because it still is really expensive." And Wayne Environmental Drilling might not be there when that time does come; the family business is being eyed by parties in acquisition mode. "We're the third generation so it's very tough to walk away from it," Pattison says. "We're probably going to continue to do pump work and keep the water well rig. This area where we are (north of Sacramento) is rural. It's still growing and the people still need wells; there's no city water. The water well business still is viable here and probably will be for some time. But you'll end up having to move further and further out to have the ability to do it on a regular basis. And we've got at least six water well companies in the area; it's very crowded."

The Long Haul

"The staples of our business are installing monitor wells and collecting soil samples for contamination evauation," says Bruce Niermeyer, president of Cascade Drilling Inc., Woodinville, Wash. "That primarily is done with auger rigs and, to some extent, with probe rigs. What's happened is the probe rigs have cannibalized all the soil boring activity from the auger rigs so the auger rigs mostly do monitor wells." He says that's been happening for the past five years.

"The remedial side of our business is growing," Niermeyer reports, adding that that, too, is a five year trend. "Quite some time ago, we made an investment in the bigger tools. We have augers all the way up to 18-inch diameter so we can set extraction wells and that kind of stuff. One of the reasons we've thrived while others have gone by the wayside is that we have been positioned to do a good job on the remedial side of the market. And we've got the statement of qualifications and the insurance and so forth to qualify to work on some of the bigger sites."

Niermeyer offers some perspective on his current market conditions, saying, "I sold my first business back in 1991, which, as it turns out, was pretty near the top of the market. Then I started Cascade, knowing at that time that the party was over and we were in a long-term decline phase of the market. In the Seattle area, there probably have been half a dozen drilling companies go out of business in the last eight years - with a total of 25 rigs. They got big during that underground tank drilling boom of the late 1980s, early 1990s, and when the market slowed down, they didn't have what it took to stay with it - whether it's desire, resources or whatever. But if you're good, there's still plenty of work out there. In the big picture, I think we're still in a declining market. It's all about getting your share of it."

Looking ahead, Niermeyer says his company has made a priority of cutting costs in preparation of a slowdown. "I keep looking over my shoulder," he says. "I can't believe we're as busy as we are right now." How long will that good fortune last before a slowdown? Niermeyer uses this analogy: "It's like a taxi service in New York or San Francisco. You might have a fleet of 200 cabs out there - which costs a lot of money to run. How much backlog does the taxi company have? - about five minutes. The environmental drilling business we're in with the auger drills is not so different. We're lucky if we have two weeks worth of backlog."

"I thought the MTBE situation was going to lead to a big resurgence in the number of wells installed, but I haven't really seen that yet," he says. "We have been sent MTBE work at some of the hot spots - like Lake Tahoe - but it hasn't been huge." Asked if he expected that situation to break open sometime soon, he replies, "I would hope so, but it's been disappointing because I haven't seen it."

In spite of anticipating a general slowdown, Niermeyer does foresee opportunities. "We've invested in some bigger, badder probing rigs; we see a lot of potential there," he explains. "If the regulations change, you could even start setting some wells with those. To some extent, I think the sonic technology is an extension of that; there's a lot of potential there, too."

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