BETTER. FASTER. SAFER.

Pipeline Equipment & Industry Outlook20

19

A SUPPLEMENT TO

PRESENTED BY

The U.S. oil and natural gas pipeline and distribution sector is on the rise. But that doesn’t mean it’s all smooth sailing for those involved. This Special Report is aimed at helping you chart a course through the murky waters to understand the market conditions and explore some tips and tools to improve your business.

Despite record growth for the past decade, the U.S. oil and gas pipeline and distribution industry — as well as the U.S. economy as a whole — could be in store for a slowdown.

According to Benjamin Duyck, director of Market Intelligence for the Associa-tion of Equipment Manufacturers (AEM), trade policy poses a tremendous risk to-ward the global gross domestic product (GDP). Meanwhile, tax reform has ben-efited the U.S. economy in the short term, according to Duyck, but unfortunately those benefits have been undermined by recently implemented tariffs.

These challenges, in addition to concerns about workforce shortages, could pose a challenge, but U.S. energy production is projected to continue rising for the foreseeable future. Increased oil and gas output will necessitate additional infrastructure. However, companies will have to improve efficiency and take ad-vantage of cost-saving technology to remain profitable.

North American Oil & Gas Pipelines has partnered with AEM, owner and pro-ducer of ICUEE, to provide you with the following industry insights and technical know-how to meet the challenges of the industry head-on.

Get a Leg Up: Navigating the Growing Pipeline and Distribution Market

E D I T O R ’ S M E S S A G E

PUBLISHERBernard P. Krzysbkrzys@benjaminmedia.com

EDITORIALEditor: James W. Rushjrush@benjaminmedia.com

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EDITORIAL ADVISORY BOARD Mark Bridgers Principal, Continuum Capital

Matt Fleming Director, Business Development, Industrial Products, The Lincoln Electric Co.

Butch Graham Senior Auctioneer, Ritchie Bros. Auctioneers

Eric Kleinhenz Executive Vice President, Managing Director — Pipeline Operations, Mott MacDonald

Tara Podnar McMahan Head of Section, Integrity Solutions, DNV-GL

Bob Osborn Senior Vice President, Pipeline Division, Michels Corp.

Neil Waugh Senior Vice President, NPL Canada Ltd.

John Weaver Corporate Business Manager, John Deere Construction & Forestry Division

Chris Yoxall Senior Executive Vice President, ROSEN Group

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Brad Kramer | Managing Editor bkramer@benjaminmedia.com Twitter: @NAOGP1

T A B L E O F

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3 2019 U.S. Pipeline and Distribution Market Outlook Opportunities and challenges amid a

decade of growth.

5 Gas Distribution Industry Growing Strong A conversation with Miller Pipeline

President Kevin Miller.

7 By the Numbers A look at the results from the 2019

ICUEE Industry Survey.

8 Drones Take Natural Gas Pipeline Inspections to a New Level How unmanned aircraft are changing

the pipeline industry.

11 Insights and Advice for Equipment Managers in the Pipeline Industry A Q&A with Appalachian Pipeline

Contractors Equipment Manager Andy Baldwin.

12 Vacuuming for Integrity How Delta Daylighting uses

vacuum excavators for pipeline integrity work.

14 ICUEE Offers Utility Professionals Chance to Connect Looking at the benefits of

attending the “Demo Expo.”

CONTENTS

INDUSTRY OUTLOOK

3

The U.S. oil and gas pipeline and distribution industry has been growing strong for the last decade. Rising production from the Permian Basin, shale plays and other regions are creating increased

demand for additional infrastructure to transport oil and gas products to refineries and consumers.

The U.S. Energy Information Administration (EIA) re-ported in April that 2018 marked the most profitable year for U.S. oil producers since 2013, despite crude oil price declines in the fourth quarter last year. The EIA surveyed 43 U.S. oil producers and found that net income for this group reached $28 billion, a five-year high.

Meanwhile, average West Texas Intermediate (WTI) crude oil prices were $33 dollars per barrel lower in 2018 than in 2013, as well as an approximate 40 percent decline in prices in the fourth quarter last year. That higher net income was driven by higher production and revenue. The 43 companies that the EIA surveyed produced 6.2 million barrels per day (bpd) of liquids in the fourth quarter 2018.

According to the administration’s Annual Energy Outlook 2019, released in January, production will continue to rise, setting up the United States to export more energy than it imports in 2020 for the first time in almost 70 years. In fact, the EIA reports that the United States will remain a net energy exporter through 2050.

U.S. energy export growth is driven largely by petroleum exports including crude oil and products, and by additional liquefied natural gas (LNG) exports, according to the EIA. These trends have become clearly established, and the Annual Energy Outlook 2019 shows them continuing for the next few years, and then slowing and stabilizing.

“The United States has become the largest producer of crude oil in the world, and growth in domestic oil, natural gas and renewable energy production is quickly establishing the United States as a strong global energy producer for the foreseeable future,” said EIA Administrator Linda Capuano. “For example, the United States produced almost 11 million barrels per day of crude oil in 2018, exceeding our previous 1970 record of 9.6 million barrels.”

The United States will continue to see record high levels of oil and natural gas production, according to the EIA, which predicts that U.S. crude oil production will continue to set annual records through the mid-2020s and remain greater than 14 million bpd through 2040. Continuing development of tight oil and shale gas resources will support growth in natural gas and natural gas plant liquid (NGPL) production, which is expected to reach 6 million bpd by 2030, as well as the growth in dry natural gas production. Dry natural gas production will reach 43 trillion cubic feet by 2050, according to the EIA. NGPLs grow faster than other fossil fuels and account for almost one-third of cumulative U.S. liquids production during the projection to 2050.

At the same time, the EIA reports that U.S. net exports of natural gas will continue to grow, as LNG becomes an increasingly significant export. In the Annual Energy Outlook 2019, U.S. LNG exports and pipeline exports to Canada and Mexico increase until 2030 and then remain fairly constant through 2050 as relatively low, stable

Uncertainty Rises Amid a Decade of Growth

By Bradley Kramer

THE U.S. PIPELINE AND DISTRIBUTION MARKET

WHAT’S DRIVING?

4

natural gas prices make U.S. natural gas competitive in North American and global markets.

Despite this projected growth, management consulting firm Continuum Capital projects uncertainty for 2019. In a report published in the January-February 2019 issue of North American Oil & Gas Pipelines, Continuum Capital consultants Mark Bridgers, Dan Campbell and Jay Rendos authored a report titled The Art of War: North American Pipeline Construction Overview 2019-2022, in which they predict a slowdown in the market this year.

“We are entering at the very end of the longest economic expansion the U.S. has ever enjoyed … every expansion ends the same way … in a recession,” reported Bridgers, Campbell and Rendos. “We are currently forecasting a short and shallow recession in 2019 that will dampen growth but not stop it.”

The Continuum Capital authors cite workforce availability, the tariffs imposed by the Trump administration in 2018 and the subsequent retaliatory tariffs imposed by

various trading partners, including Canada, as key factors in their findings.

“The high use of imported steel in the construction of transmission and high-pressure distribution assets is a particular vulnerability

of this market space,” the Continuum Capital report states. “A broader and significant risk is that this trading environment creates a drag on global economic growth and could ultimately turn into a full-on trade war which would be catastrophic for all parties in the short-term. The impacts of these tariffs are already visible on commodity prices and while the currently observed price increases are digestible, a continuation of this trend is not.”

The challenges imposed by the tariffs are one factor that could particularly deepen and lengthen a recession, according to the report. Beyond 2020, Continuum Capital forecasts that the pipeline market will continue to exhibit periodic volatility and the authors remain “very bullish” over the next 15-20 years of opportunities in both the distribution and pipeline space.

In a 2018 interview for North American Oil & Gas Pipelines, industry stakeholders expressed concern over a number of challenges, including regulatory uncertainty, third-party opposition and workforce shortages. They all stressed that the industry must educate the public and other stakeholders about the pipelines to ensure progress.

“The fact is that pipelines are the safest way to reliably deliver the energy our society depends on and the standard of living to which we’ve grown accustomed,” said Andrew Craig, land manager for TransCanada. “It’s incumbent on us to educate all stakeholders, including federal, state and locally elected officials as well as landowners, indigenous tribes and affected communities about the importance of domestically produced, clean burning natural gas to both our present and future.”

As for the workforce, the pipeline industry is facing a major shortage, according to Robert Osborn, senior

vice president of pipeline operations for Michels Pipeline Construction, a division of Michels Corp.

“As the baby boomers are retiring out of the business, we now have a shortage of qualified people in the industry,” Osborn said. “The traditional pipeliner is becoming a dying breed. The younger generation doesn’t have the same interests as the older generations had when it comes to long hours, travel and physical labor. The wages and benefits in pipeline construction are better than they have ever been, yet drawing new people into the industry remains a big challenge.”

Looking toward the future, Craig remained positive about the prospects for the pipeline and distribution market.

“My personal view is that the pipeline industry will experience strong and stable growth over the next several years,” Craig said.

“Technology is driving production to record levels and pipelines remain the safest and most reliable way to get that energy to high value end-use markets.”

The size and magnitude of the pipeline system in the United States dictates that there will be stability in the market, said Rob Riess, vice president of the pipeline division at Henkels & McCoy.

“There’s always going to be integrity management work, upgrades and upkeep,” Riess explained. “The pipeline industry for years has always been cyclical, with peaks and valleys. When we have a lot of gas or oil being produced, we’ll build pipelines. Once we get to a point that we don’t need more pipelines, we’ll add compression or pumps to get more throughput. The maintenance and upgrade work will always be here.”

Bradley Kramer is managing editor of North American Oil & Gas Pipelines. Contact him at bkramer@benjaminmedia.com.

TARRIFF TROUBLES

STRONG FUTURE

BUILDING SUPPORT

“The United States has become the largest producer of crude oil in the world, and growth in domestic oil, natural gas and renewable energy production is quickly establishing the United States as a strong global energy producer for the foreseeable future.”

— Linda Capuano EIA Administrator

GROWINGGas Distribution Industry

5

Kevin Miller

STRONGA Conversation with Miller Pipeline President Kevin Miller

Founded in 1953, Miller Pipeline has grown to provide a comprehensive range of pipeline contracting and rehabilitation services for

natural gas, liquids, water and wastewater pipelines. In January 2016, Miller Pipeline and Minnesota Limited joined together to create MVerge, a publicly owned and operated division.

Kevin Miller began his career at Miller Pipeline in 1973, and he has worked in nearly every capacity with the company, becoming president in 2004. Miller also plays an active role in the pipeline industry and has served various positions on the board of directors for the Distribution Contractors Association (DCA), including president in 2010. He is currently on the board of directors for the Gold Shovel Standard. He is also a

member of the HDPE Municipal Advisory Board for the Plastic Pipe Institute

(PPI), having served as chair of its training committee.

We asked Miller a series of questions related to the

pipeline and distribution industry, the impact

of equipment and

technology on his business and the lessons he has learned in his four decades in the industry.

How do you view the state of the natural gas distribution sector in North America today? Is it getting stronger, declining or stagnant?

The gas distribution market has experienced steady growth over the last 10 years, and there are several factors driving this. Thanks to plentiful shale gas, the long-term outlook for low-cost natural gas makes it a leading choice for consumers that want lower utility bills. Many distribution

companies have been expanding, and continue to expand, their systems to allow existing homeowners and businesses to take advantage of low-cost energy. The economic recovery has also created demand for more new homes, leading to an increase in main and service work across most of the United States. In many areas of the country, most large gas companies are in the middle of multi-year programs to replace aging pipes, which has accounted for most of the growth in this market.

How has equipment technology and innovation improved distribution construction? How has it hindered it?

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Much of our work is done with directional drilling equipment, and the drilling rigs have gotten better, faster and more powerful, and at the same time reliability has improved. The locating equipment we use with those machines has gotten more accurate and user friendly. Vacuum excavation (wet and dry) has improved and has become critical in helping contractors avoid damaging underground utilities. Various types of equipment have been “downsized” — as an example, mini excavators, skid loaders and tool carriers — to facilitate construction methods in urban areas. GPS units have been added to most equipment, which helps us keep up with maintenance and monitor utilization. Safety features like back-up cameras, parking sensors and warning lights in mirrors have made our vehicles much safer to drive. Technology and innovation from our manufacturers have greatly benefited this industry and with minimal downside, other than the increase in cost and in some cases, our ability to do our own repairs on the equipment.

What equipment and construction trends do you see coming that will have an impact on the distribution sector?

I think we will continue to see growth in this industry, and there will be a need for more trucks and equipment to be delivered to contractors more quickly. The lead time required to get equipment today, in some cases, makes it difficult for contractors to meet the construction schedules of our customers. Contractors in this industry want to see equipment inventory levels increase and lead time requirements for manufacturing decrease.

I think we will see more safety features added to vehicles and heavy equipment, features that will protect both the operator and the workers that are in close proximity to the equipment. Some of the new safety features are great examples of using technology for improvement. As an example, you can put chips in workers hard hats, which identifies to the equipment operator where workers are at all times

and can effectively shut down the equipment if a worker gets too close.

Using various technologies, it will be possible to pre-set your

excavating equipment to stay away from overhead

lines or buried high

consequence facilities. This ability will certainly drive up manufacturing costs but will pay big dividends in employee safety.

I also think there will be more focus in the industry on damage prevention, which will cause the use of vacuum excavation to grow. I think that there will be a continued focus by utility companies to use directional drilling and other trenchless technologies to avoid the expense of pavement restoration and to minimize the impact to home owners.

What value do you gain from attending construction equipment-related trade shows and other industry events?

Having the ability to exchange ideas with other industry professionals and working towards solutions for common problems we face in the industry is probably the primary reason we attend them, along with getting to see the newest tools and equipment that can help us improve productivity. We consider our equipment providers as business partners and spending time with them at these events helps us develop and maintain a good relationship with them so that we can work out problems, if any develop. We also spend time discussing our equipment needs for the upcoming year and build schedules.

What major challenges have you faced on distribution projects in recent years? What solution(s) did you find

to overcome those challenges?

I think the largest challenges we face in the distribution industry are related to the regulatory and compliance issues of our customers and the hiring and training of the people needed to do the work, more so than the projects themselves. When we do have challenges that are project specific, it’s usually related to soil conditions, terrain, accessibility or conflicts with other underground infrastructure.

The equipment and tool manufacturers that supply our industry have done a great job in coming up with solutions to help contractors get jobs done. Downhole tooling for directional drills and the drilling fluid additives have helped in tough soils. Pneumatic piercing tools and pipe splitting equipment has been developed to minimize impact to homeowner lawns. Hydro-excavators, sewer locating equipment, ground penetrating radar and line locating equipment has been continually improved, helping us to avoid damages.

What’s the most important lesson you’ve learned from working in this industry?

I’ve been involved in this industry for over 40 years, and the amount of change that has come about, particularly in the last 10-15 years, has been significant. Early in my career, I struggled to accept change, but I have since learned that changes are necessary and will produce a superior product.

The gas distribution market has experienced steady growth over the last 10 years, and there are several factors driving this. Thanks to plentiful shale gas, the long-term outlook for low-cost natural gas makes it a leading choice for consumers that want lower utility bills.

INDUSTRY OUTLOOK & EQUIPMENT NEEDSRespondents reported a significantly heavier workload in 2018 compared to 2017 with 77% saying their workload increased and only 3% saying it decreased. They also reported that they forecast a large increase in equipment needs for 2019 vs. 2018 and plan on doing it as purchases vs. rental.

INDUSTRY DRIVERSGrowth has been driven largely by power grid needs (63% of respondents said pow-er grid was a key driver), but all utility segments, including natural gas T&D, had more than 17% respondents saying they were also a driver. Additionally, growth is driven by both new and rehab projects with more than 62% saying these are drivers.

What sector(s) is/are driving growth in the utility industry?

INDUSTRY CHALLENGES

What do you expect your biggest challenge to be in 2019 and beyond?

Product performance or component failures that hurt efficiency

Where the utilities are located 7

2019 INDUSTRY

SURVEY RESULTS

The majority of respondents (82%) were utilities or utility contractors with an even mix of titles in fleet managers, field ops and executives.

A large majority (86%) are planning on attending ICUEE 2019.

Survey was sent via email to 18,428 utility and utility construction professionals who have attended ICUEE in the last two shows with an offer of an executive summary of the survey if completed. The survey generated a 1% response rate with 165 individuals completing.

O B J E C T I V E :

Determine growth drivers / inhibitors in the utility industry and the impact on equipment needs.

21% 10%

21% 10%

3% 13% 44%

77% 63% 29%

Net change in WORKLOAD 2018 vs. 2017+74

Net change to EQUIPMENT PURCHASE 2018 vs. 2019+50

Net change in EQUIPMENT RENTAL 2018 vs. 2019-16

increase

decrease flat / decrease flat / decrease

increase increase

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63%

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17% 17% 17% 17%

9%

New Projects

What are some of the factors driving growth in 2019?

72%

62%

42%Repair

and Rehab

Expansion

Issues regarding public funding on a federal, state, or local level

Workforce shortages

It was less than three years ago that commercial businesses were highly restricted from flying drones — aka unmanned aerial vehicles (UAV). Part 107 of FAA regulations created the remote pilot certificate, establishing the rules for flying unmanned aircraft systems (UAS).

Today, there are more than 113,000 remote pilots and more than 900,000 commercially registered drones in the United States. Utilities comprise a

significant segment of the commercial market, valued at $9.4 billion in a PwC study in 2017.

The oil and gas pipeline industry is especially interested in using drones for inspection of pipelines across vast areas. That’s because

the current process for inspecting infrastructure in hard-to-reach places is both expensive and dangerous, requiring

helicopters or airplanes to fly over the area. People are put at risk. While utilities want to fly drones over long

distances, beyond visual line of sight (BVLOS), current law restricts them from doing so without a waiver

from the FAA. However, under direction of the White House, the FAA has begun to accelerate

safe drone integration into the airspace through 10 Unmanned Aircraft Systems

Integration Pilot Program sites.

8

Take Natural Gas Pipeline Inspections to a New Level

DRONESToday

there are more than 113,000 remote

pilots and more than 900,000 commercially registered drones

in the U.S. Utilities comprise a significant segment of the commercial market ...

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Monitoring of Oil & Gas Pipelines Via Drone

The Alaska Integration Pilot Program (IPP) project team, led by the University of Alaska Fairbanks (UAF) Alaska Center for Unmanned Aircraft Systems Integration (ACUASI) is currently conducting tests that will help develop the safety case for 24/7 monitoring of oil and gas pipelines via drone in remote and harsh climate areas. The first flights will use unmanned aircraft to monitor the 800-mile Trans-Alaska Pipeline for Alyeska Pipeline Service Co. A similar study of the gas pipelines in Alaska’s Cook Inlet will be conducted for Hilcorp Energy Co., another partner in the Alaska project.

According to Cathy Cahill, director of UAF’s ACUASI, who is leading the IPP project, they will have to prove to the FAA that sense and avoid technology will keep the drone from colliding with another aircraft or obstacle, even if connections are lost. Wireless coverage is a challenge in remote areas for both controlling the aircraft and getting real-time data back to the operator. “Streaming data is the biggest challenge,” said Cahill. “Getting the bandwidth to get the data back in high resolution in real time is difficult.”

The goal is to fly above the whole length of the pipe-line while recording and displaying the scene in real time. Cameras mounted on the drones will be looking for veg-etative encroachment and oil leaks. Methane leak de-tectors and thermal cameras also can be mounted to drones, providing a whole new level of security. Through GPS technology the utility can locate the problem area so maintenance crews can be sent to the precise location. In addition to the cost savings and environmental bene-fits of losing less oil and gas from a leaky pipeline, Ca-

hill said that drones may prove more cost-effective than manned inspections.

“The preliminary data shows there will be some cost savings despite the fact that four people

are needed for flying beyond line of sight, compared to two for manned flights,” said

Cahill. The required team includes an external pilot, an internal pilot, a copilot

who runs the payload, and a mission commander.

Qualified drone crews can also be deployed rapidly

and with great precision, whereas traditional manned aircraft typically require much longer lead times, have less flexibility and are still high-risk, said Christopher Maier, UAV Pilot at ULC Robotics Inc., a UAV services company that focuses on the energy and utility industries.

Drone Flying RestrictionsAccording to Michael Oldenburg, senior communica-

tions manager, for DJI North America, a leading drone manufacturer, oil and gas utilities today are flying drones within line of sight for routine visual inspections. This in-cludes right-of-way inspection, asset inspections, survey-ing and emergency response. “Companies are moving beyond visual data,” said Oldenburg. DJI’s Matrice 200 drones accommodate this trend by providing side-by-side mounts for visual and thermal cameras. Some other prod-uct developments for commercial applications include rugged design, water and dust ingress protection and the ability to withstand freezing temperatures.

“Qualified service-based companies are commonly used in the utility industry because of their specialized training, access to up-to-date aircraft and sensors, and experience working safely in challenging or high-risk environments,” Maier said.

FAA regulations, airspace clearances, site safety risk assessments, equipment preparation, notifications, and personnel training must be taken into account before taking flight. Oldenburg said about 70 percent of utility firms are outsourcing their drone or unmanned aircraft systems program to service providers. However, he sees that trend starting to change. “The early adopters are now starting to bring those teams in-house because they see the value in it,” he said. “They started small and now want to scale it out.”

Even with the current flying restrictions drones have become an important tool for oil and gas companies. But usage is likely to expand given a recent announcement of new rules to allow UAS to fly overnight and over people without waivers under certain conditions.

And if flying beyond line of sight is eventually allowed, you might say the sky is the limit for this new technology.

See the latest equipment and technology for the utility and construction industries, including exhibitors like DJI North America, at ICUEE — The Demo Expo, Oct. 1-3, 2019, in Louisville, Kentucky. To get the latest information about the show, sign up for show alerts.

*Source: FAA Fact Sheet 2018

Even with the current flying restrictions drones have become an important tool

for oil and gas companies.

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Insights for Equipment Managers in the Pipeline Industry

11

EXPERTADVICE

Andy Baldwinhas been the equipment manager for Appalachian Pipeline Contractors in Hendersonville, Tennessee, since June 2011. Prior to assuming that role, Baldwin worked in the auto parts industry for nearly 20 years. “My experience in auto parts, having a basic understanding of different types of machinery and their related components, made me a good fit,” Baldwin said.

Baldwin now manages Appalachian Pipeline’s more than 500-piece fleet of equipment ranging from trucks, skid steers and excavators to boring machines, pipelayers, sandblasting pots and numerous attachments. Baldwin talked to ICUEE about some of his biggest lessons learned since joining the pipeline industry nearly eight years ago, along with what he thinks it will take to continue succeeding as an equipment manager.

What are some of the biggest pipeline industry trends right now?

We’re seeing a lot of new pipeline construction, as well as the refurbishing of existing lines. We’ve put in a lot of bids on “take-up and re-lay” projects where we’re removing old 10-in. lines and putting 16-in. lines in their place, or maybe going from a 16- to a 20-in. line. In either case, the existing pipe is too small to handle the volume that needs to run through it.

Another thing I’ve seen is that more equipment is available to rent than when I first started in 2011. A great example is the trailer-style vacuum excavator. We don’t operate this type of machine on an everyday basis, so I really can’t justify purchasing one. The challenge has been, where can I go to rent one? Meeting people from leading manufacturers has been really helpful. Now there are a few vendors out there who have added vacuum excavators to their rental fleets.

What are your biggest lessons learned thus far as an equipment manager?

Technology can be really helpful, but you have to do your homework and make sure you’ll get a return on your investment. For example, we’ve tried a couple of different

telematics solutions, primarily for equipment tracking. The issue we’ve always run into is that, because of the specialized work we do, our equipment sometimes sits for longer periods of time. If it’s not being started and operated every day, especially in the colder northern climate, the telematics device seems to put a bit of a draw on the battery. Since our primary focus is productivity and downtime, that’s a concern for us.

Another issue we’ve had with telematics is that a lot of our equipment is older. We aren’t able to capture as much of the machine performance data as we’d like in order to really see the benefit of telematics. That will change over time, of course, as we replace and upgrade elements of our fleet.

Do you have any advice for your fellow equipment managers?

When I first came into this industry, I didn’t know all that much. Plus, I was all by myself.Nearly everyone else in the company was out on jobsites. I knew what a dozer was and what an excavator was, of course, but I knew I had a lot to learn. That’s why I attended my first ICUEE in 2013. Now the show has grown to include a lot more of what we utilize as a pipeline company. I’m looking forward to the show this year to see what else is new and different, and would encourage others to attend as well.

I like to think outside the box. I look at equipment and technology, not just for what

it is designed for, but what our company can use it for. For example, we’ve started using pole trailers for hauling pipe on the right-of-way. They are compact, but can carry the weight. I think it’s important for equipment managers to really challenge themselves and think creatively.

My other piece of advice is that it’s import-ant to build a long list of resources. That’s another reason I like ICUEE. I’ve been able to meet a lot of people from a lot of compa-nies, some of which I was never even aware of. When I first became an equipment man-ager eight years ago, I only had a couple of mat companies I dealt with. Now I have six or eight. The more people you know and the more options you have, the better you can be as an equipment manager.

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Vacuum excavation is a growing — and in some cases a mandated — methodology for digging

near underground utilities, at com-pressor stations or refineries. One of the companies doing its fair share of the work in the Southeast United States is Delta Daylighting.

Operating out of Houston, the company works in the Texas Gulf Coast region but has worked on several projects out of the state as it builds its reputation for reliable and efficient services.

Opening its doors in 2013, the company, like many in the vacuum excavation industry, works as a sub-contractor for larger pipeline and oil and gas contractors. In Delta Day-lighting’s case that includes Sunland Construction, Strike, Tucker Mid-stream, Primoris and Troy Construc-tion, to name a few. Projects include work for customers including Kinder Morgan, Marathon, Shell, Williams and Enterprise.

“In the last two years we have worked in 10 to 12 states,” said Jesse Pletts, president of Delta Daylight-ing. “A lot of what we do is proj-

ect driven. While we are based in Houston, and our customers are based here, when they mobilize to a job for a pipeline spread in the middle of Georgia, because of the reputation we have built for reli-able service and reliable trucks, our customers then bring us to those re-gions where they mobilize.”

In the last year, Delta Daylighting crews spent about nine months in Tennessee working on a Kinder Mor-gan station project, in Missouri and Oklahoma working on Marathon’s Ozark Pipeline project, and they traveled to Georgia, Alabama, Missis-sippi, and North and South Carolina on various Williams Transco Pipe-line projects.

Operating the trucks in the field is a crew of 20 full-time employees and an additional 30 temporary hires when the work-load hits its peak. It is in this realm that Pletts sees the biggest issue emerging for the industry — a lack of skilled workers.

Because hydro-excavators are driv-en to project sites on a daily basis, the driver/operator must have a CDL Class B license, and there is a short-

Delta Daylighting operates a fleet of eight Kaiser Premier CV Series hydro-excavators working on oil and gas pipelines, compressor stations and refineries in the Southeast.

forINTEGRITY

By Mike Kezdi

VAC

UU

MIN

G

13

“If you are digging in the ground near

underground utilities of any sort

that you do not want to damage,

our CV Series trucks can go head-to-head

against any other company, crew

or vehicle and come out ahead. That is a function of both the CV’s capabilities, as

well as the team that we have at

Delta Daylighting.”

— Jesse Pletts, President, Delta

Daylighting

According to Jesse Pletts, Delta Daylighting president, the CV Series hydro-excavators are ideally suited to work in ground formations present in the Southeast United States.

age of those workers nationwide. “Nationwide, we are seeing fewer and fewer people want to drive and then on top of that there are less who want to drive the truck and do the work,” Pletts said. “It can be a challenge to find, locate, screen, recruit and retain talent that wants to do this work.”

Delta Daylighting’s crews complete an assort-ment of projects that test the possibilities of what a vacuum excavator can do, including potholing and line locating to creating 5x5x10 boxes and massive trenches. To help keep pace with this busy sched-ule, Delta Daylighting relies on an in-house fleet of eight Kaiser Premier CV Series hydro-excavators, though the company typically adds another six rental units during the peak summer months.

Pletts, who joined the company in 2016, said that when he started, they were running equip-ment from another manufacturer, but it could not meet the demands of the work Delta Daylighting was performing. It slowly transitioned to the cur-rent fleet, which as of 2018 is solely sourced from Kaiser-Premier.

“If you are digging in the ground near under-ground utilities of any sort that you do not want to damage, our CV Series trucks can go head-to-head against any other company, crew or vehicle and come out ahead. That is a function of both the CV’s capabilities, as well as the team that we have at Delta Daylighting,” Pletts said. “We have a saying, ‘We don’t want today’s job. We want to-morrow’s job and next month’s job.’ The best way to get that is not to drag our feet and take two days to do a one-day pothole.”

One of the keys to this in the region where his crews work, is the use of a hydro-excavator versus a suction excavator (air only or combination), which Pletts notes some people are using as a way to save water and be able to dump the spoils more easily.

“When you’re working from Texas east and the Mason-Dixon line south, the ground composition tends to be a hard and thick red clay the deeper that you go,” Pletts said. “An air truck can’t break through that and get you the production needed to not only satisfy the customer, but also in a way that separates you from the competition.”

He adds that the CV Series, with its Robuschi vac-uum blower system and the high-pressure waterjet technology allows his crews to easily cut through the dirt in a safe, timely and productive manner. All three of which have become hallmarks of a Del-ta Daylighting project. Based on his conservative estimates, the crews haul about 20 cubic yards of material a day. That number increases if there is a water source nearby and the ability to dump debris on site.

“Most of our work is primarily pipeline con-struction projects, pipeline facility work and refineries, and these big hydro-excavators do the job well for us,” Pletts said. “The tech specs of the CV Series make it one of the biggest and baddest hydro-excavation trucks on the market. And now with it on a Peterbilt chassis, it’s been a great marriage of technology and capability.”

These are important things when working in an industry that is growing and still fairly fragmented. According to Pletts, there are many small owner-op-erators running one or two trucks, a large chunk of mid-size companies like Delta Daylighting and a handful of large companies. Looking ahead, Pletts sees more companies entering the industry, but also a consolidation of some of these regional play-ers too. Running the CV Series has helped Delta Daylighting enhance its reputation for timely, ac-curate and safe vacuum excavation services.

“The industry is starting to undergo some changes that are the result of the oil and gas pipeline operators becoming stricter on their mechanical excavation requirements,” he said. “There is more regulation being imposed on projects to ensure safety and that reduces the number of line strikes. As that comes down, there is more need and a desire for vacuum ex-cavation on projects. Today, companies are in-cluding vacuum excavation in project budgets.”

Mike Kezdi is associate editor of North American Oil & Gas Pipelines. He can be reached at mkezdi@benjaminmedia.com.

A Variety of Work

ICUEE Offers Natural Gas Professionals Jobsite SolutionsICUEE, the “Demo Expo,” is the utility industry’s largest trade show, covering more than 28 acres of indoor and outdoor exhibits, and bringing together more than 18,000 utility professionals every two years.

“Great event. An opportunity to see new, updated and unknown technologies in one location. Professionals and experts on-site. All questions are answered here. I look forward to future ICUEE events.” — Dave H., Connecticut Natural Gas

“My first ICUEE was in 2013. Now the show has grown to include a lot more of what we utilize as a pipeline company. I’m looking forward to the show this year to see what else is new and different, and would encourage others to attend as well.” — Andy B., Appalachian Pipeline Contractors

ICUEE only happens

once every two years. Don’t miss your chance to get informed & see the

latest industry developments.

We hope to see you in Louisville in October.

Why ICUEE?• ICUEE 2017 covered nearly 1.24 million net square feet of

exhibits, over 1,000 manufacturers and service providers, and 2019 will be even bigger.

• Learn best practices from expert users on how to get the most out of your equipment.

• Participate in Q&A sessions with technical experts and equipment designers as you walk the show floor.

• Learn through innovative education programs.

• Develop your staff by bringing them to the show and demonstrating the right way to research equipment, negotiate terms and implement a purchase agreement.

Registration is Now Open! Visit: www.icuee.com

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MARK

Owner and Producer