June 2022 Vol. 77 No. 6

Editor's Log

Strange Days

Robert Carpenter | Editor-in-Chief 

I think it’s safe to say that most people in the underground utility and pipeline industry entered 2022 hoping for a strong rebound and return to a much sought-after normal year. Ironically, 2022 has proven to be a year beset by bizarre challenges, yet still sugar-coated with financial windfalls. 

How you are feeling about the complexity of industry market situations depends upon your area of focus. Emotions range from depression to elation to frustration. Yet, there remains signs of hope and improvement. Fingers are crossed the second half of 2022 continues to prosper and brings relief to certain markets, like sewer/water, fiber and electric. 

For the underground industry, the Infrastructure Bill was a huge step in the right direction. It will provide a long-overdue dose of support to markets struggling to keep up with demand. As we’ve said in the past, fiber needed to follow the path of the electric and telephone industries, in order for rural areas to join the fiber generation. Thanks to billions from the Infrastructure Bill, that process should take a big step towards reality. 

There are numerous big plans – as to be expected – for infrastructure spending, which is just now really getting started. The second half of 2022 should see a heavy materialization of projects, as the actual dollars reach the market and are distributed. But between inflation and wage hikes, not to mention continued supply chain issues, the money will not go nearly as far as it was envisioned less than a year ago. 

With soaring inflation impacting everything from food to fuel, the cost of doing business has taken a major hike. Wage inflation from workforce shortages further increase project costs. Yet contractors, consulting engineers and owners are willing to raise the pay bar and even offer bonuses, if it means getting people to work. 

While these issues impact all areas of the underground infrastructure markets, the horizontal directional drilling industry is an amazing paradox in and of itself. 

In this issue of Underground Construction, we present our exclusive 24th Annual HDD survey. No surprise that it represents a dichotomy of market conditions and opportunities. On the one hand, fiber and electric work are booming at levels not seen since 2000, driving a robust market for small rigs, tools, mud, etc. But the large rig market is experiencing tough times. 

In 2022, one would normally expect an increase in small rig sales with the red-hot fiber work. However, the infamous supply chain issues have slowed production and lead times for many models. Consequently, the forecast is a slight decrease in small rig sales, even though in a “normal” year, sales would probably be increasing in the 5 to 8 percent range. 

As we’ve discussed, supply chain issues continue to limit the amount of equipment that is available for the strong markets. Inflation has raised costs and worker shortages compound market challenges. 

One fiber contractor commented to our survey that manufacturers are almost embarrassed to discuss business. “It’s like they don’t want to talk to me because they’re afraid they don’t have what we need, or they don’t want to tell me just how long the wait is going to be.” 

On the other hand, large rig operators, who work primarily in the energy pipeline markets, have run into nothing less than a brick wall, as the Biden Administration and its allies in Congress have declared an all-out war on traditional oil and gas markets. President Biden has picked up the Al Gore mantra of green at all costs. That course has proved extremely costly, indeed, and there is no end in sight. The reality is that there is a middle ground to be had but, apparently, that option is being ignored. There are debts to be paid to the green movement, no matter the suffrage for the American people. 

The bitter irony is President Biden continues to beg for increased oil from Saudi Arabia and other OPEC members who scoff at his overtures. The Administration also persists in the folly of obtaining more oil from the Socialist dictatorship of Argentina and the outlaw country of would-be nuclear power Iran, which openly wants nothing less than the total annihilation of the U.S. 

The energy situation has become so ludicrous that it’s difficult for ordinary people to perceive. One big rig operator replied to the survey, stating that with the price of oil and gas, “one would expect there to be a lot of pipeline work trying to distribute energy around the country. But the opposite is true.” 

For supply chain and inflation challenges, there does appear to be progress – albeit slowly. As signs of improvement slowly spread hope in the form of clarity and enhanced market conditions, let’s pray that our leaders remember the particularly important lesson we’ve all been taught the hard way in recent years: divisive politics and a pandemic don’t mix.

Related Articles

From Archive


{{ error }}
{{ comment.comment.Name }} • {{ comment.timeAgo }}
{{ comment.comment.Text }}