Businesses and industries typically have “pain points,” parts of doing business or, in this case, drilling jobs, that could go away without being missed.
Apparently, licensing serves as a pain point for many drilling contractors. I wrote about this required scourge in my Editor’s Note for May’s National Driller. Contractors seem of two minds about licensing: They either tolerate it as a necessary evil that ensures a higher bar for the industry as a whole, or they just plain hate it.
After May’s National Driller worked its way through the postal system, I heard from a several readers about licensing for drillers. They had choice words. Many of them followed a theme.
“Appalled.” “Angry.” “Frustrated.” Steve Kaser, a water well driller out west, had those blunt descriptions, but went on in detail. “I do not believe most state’s regulations are in step with the fact groundwater is the most valuable of all resources on this earth.”
Reader Brandon Dreiling put an exasperated point on the discussion.
“Too much regulation has and will continue to push us out of business,” he wrote. “It cost to much to comply.“
Kaser went on to talk about how his state’s licensing requirements don’t cover some important aspects of actually installing a well in his area.
“Out here we use welded casing and there is nothing in the regulations that requires a basic class in welding be taken or, for that matter, demonstrating one’s competence in operating a well drilling machine.”
I didn’t directly get to the point in my Editor’s Note, so I wanted to follow up here: What does an acceptable licensing program for drilling contractors look like?
Should water well, geothermal and other types of drilling be licensed trades? If so, administration of such a program costs money. That means a license would have a fee associated with it. States won’t do that for free.
What about skills? Should drillers have to demonstrate the valuable skills required for drilling jobs before getting licensed? What does that look like? Annual courses? On-the-job apprenticeship with an experienced driller?
Bonding? Insurance? These are all important considerations if you want to develop the perfect regulatory scheme.
Let me use an example from a completely different industry: landlording. Most areas require landlords to register their properties and subject them to annual inspections. This helps ensure the rental isn't a safety hazard for tenants. Sometimes those inspections require an expensive lead certification. Those things add up. If you invest in an area with modest homes (that fetch modest rents), it’s not unusual for inspections to eat up a month or more of annual revenue.
There comes a point when a landlord might think twice about even registering a property. Think about it: If you bring in $600 a month on a property and each spring get hit with $800 in inspections, what’s the incentive to undergo the regulation in the first place?
Drilling – and a lot of industries – aren’t that much different. You want to provide safe groundwater, safe geothermal heating and cooling, or safe whatever. But when the regulators trying to certify that safety want five, 10 percent of your annual revenue, that can have a guy reconsidering his line of work.
It's not National Driller's place in the industry to say whether licensing is a good or bad thing. But I will say that, in areas where drilling is a licensed trade, the costs and processes for that licensing should make sense.
What do you think? What makes up a good licensing process? When does it cross the line into an undue regulatory burden? Send me an email to share your thoughts.
Stay safe out there, drillers.