🔒Natural gas expansion drives ETTI’s growth

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Road crews, traffic detours and dusty, scarred landscapes are a far cry from the postcard Vacationland images that attract so many summer visitors to Maine. But disruptive digging projects are unavoidable in a state with some of the oldest utility infrastructure in the country and a short construction season.

Well, maybe not.

A Lisbon-based drilling company uses innovative horizontal drilling systems that leave surfaces undisturbed while creating the infrastructure for new underground pipelines. Enterprise Trenchless Technologies Inc., was recognized recently by Equipment World magazine as its 2013 Contractor of the Year. And thanks to the growing battle among energy companies to capture natural gas contracts, there's increasing demand for ETTI's services to lay pipes, which is prodding President Scott Kelly to predict the company will double revenues and its number of employees this year.

"We always thought it would be successful, but probably not to this level," says Kelly. "We've had a pretty steady incline in growth and we've seen a big push on the natural gas side."

The renewal of a seven-year deal making ETTI the contractor for all Maine Natural Gas projects has been a big factor in driving growth. Kelly says he expects revenues will reach $15 million to $17 million this year, about twice the $7 million to $8 million of previous years.

"Natural gas really got us booming," he says. To handle that demand, he expects to double the current work force of 37.

Going in a different direction

Kelly is a big advocate of horizontal directional drilling (HDD), a cheaper, quicker and all-around less intrusive process than traditional methods to lay pipes.

"We've had instances when we've drilled streets and folks have run their business all day and had no idea that a gas main was being laid outside," says Kelly.

Whereas traditional excavation requires a fleet of heavy equipment to dig a trough into which pipe is laid and covered, ETTI's DitchWitch-brand HDD system drills a small hole parallel to a surface. It bores at speeds up to 250 feet per hour, tunneling under obstacles like roads and sidewalks that would otherwise have to be demolished and reconstructed.

Once the drill reaches a predetermined exit point, a reamer is attached to bore the hole wider as it is dragged backwards, making the space large enough for a pipe.

The HDD systems can cost up to $750,000. ETTI's largest HDD system drills up to 2,000 feet at once, and can pull a pipe as wide as 30 inches — more than enough space to lay a standard 24-inch utility pipe.

"There are a lot of opportunities when you use these techniques to distribute pipes," says Matthew Marks, CEO of the Associated General Contractors of Maine.

AGC Maine has recognized the work of ETTI three times in the last decade as part of its Build Maine Awards: in 2003 for a containment line at the former International Paper mill in Bucksport; in 2005 for a sewer line in Ogunquit; and in 2009 for a water line at Brewer's Hatcase pond.

"Underground work is complicated, but these guys have it down," says Marks.

Getting started

ETTI would not be enjoying its success today if it hadn't persevered through a rocky start.

Founded in 1995 as an offshoot of Kelly's father's company, Enterprise Electric, ETTI was initially just a side business designed to supplement the electrical work. But it carved a niche for itself in the region's utility market, largely by virtue of being one of the first excavation contractors to use trenchless technology when it debuted in the mid-'90s.

"We thought the technology was interesting and thought that somebody in the area ought to get into it because it was not available in New England at the time," Kelly says.

But Kelly and his father weren't impressed by their first interaction with trenchless technology, at a demo in Shrewsbury, Mass.

"We had a really miserable experience the first time," says Kelly. "We couldn't get the machine to do what we needed it to do and we had a couple breakdowns. I met my father at the hotel and we said, 'This isn't going to work.' "

But the Kellys' HDD salesman convinced them to travel to another demo, in Providence, R.I., that he promised would showcase the true potential of the DitchWitch system.

"The next morning, we watched them drill about 500 feet under a sidewalk, hook on to two 4-inch ducts, and drag it back by 3 p.m.," he says.

"We said, 'That's the machine we need,' and it's been the best decision we ever made," says Kelly.

Before the start of Maine's natural gas boom in the mid-2000s, ETTI made a name for itself in the water and sewer market, using its technology to help replace the region's aging utility infrastructure. The company also uses other excavation techniques, like chain trenching, vibratory plowing and open cut excavation.

While a lot of other HDD operators throughout New England chased work in the expanding fiber optic industry, ETTI kept its focus on its utility clients.

"We stuck with those core customers and that's still our focus today," Kelly says.

ETTI does some fiber optic, electric and wind power work, and while it's not the only player in the Maine trenchless drilling market, Kelly says ETTI is the largest and most experienced.

"There are a handful [of competitors], but they're running very small machines that are very limited in what they can do, so it hasn't affected our business to the level you'd expect," he says.

In-house expertise developed at ETTI over the last 17 years has been another factor in cementing the company's reputation, according to Kelly.

"This is an industry where the learning curve is pretty substantial. You almost have to be a surveyor-qualified guy to run a drill crew because it's a lot more technologically advanced than normal open cut or excavation [work]," he says Kelly. "Our advantage is that we got started early."

The company's reputation helps attract employees to operate the complex machinery, says Kelly. In the past year, ETTI hired four of the top six graduates from a Wisconsin utility industry training school as gas technicians, along with a pair of experienced drilling professionals.

"We're at the point where these folks are reaching out to us," says Kelly.

Riding the gas bubble

Today, HDD work on natural gas projects accounts for 35% to 40% of ETTI's total business. The company has been Maine Natural Gas' blanket contractor for the last five years, and recently signed a seven year extension that will provide a full slate of HDD projects as the gas company — a subsidiary of Central Maine Power Co. and Iberdrola USA — expands its presence in the Kennebec Valley.

"They do quality work, and there is a real demand for those types of construction crews right now so we wanted to make sure we had crews available for the major expansion we're doing," says Darrel Quimby, vice president of Maine Natural Gas.

ETTI is working on two MNG projects: helping to build out the capital region's natural gas distribution system and connecting a steel transmission pipe from the Maine Natural Gas line in Windsor to the east side of Augusta. The price of those contracts was not disclosed by MNG or ETTI.

Quimby says natural gas pipeline projects are a perfect application for HDD technology, which can minimize cost and environmental impact and improve safety. And as oil prices climb, there are cost savings associated with a decreased need to repave surfaces.

"You trench where you can, but you want to go trenchless when you're crossing things like roads, parking lots and rivers," Quimby says. "Trenchless technology does have its challenges — like identifying where underground facilities are — but more and more entities are using it now because of that cost of restoration."

Kevin Thibeault, the natural gas project manager for ETTI, says the specialty division gives the company great stability.

"A lot of companies don't know what's going to happen today, tomorrow or next year," he says. But the [MNG] seven-year contract really allows us to get good people to come work for us."

There are other opportunities for HDD specialty work. Mike Rogers, superintendent of the Kittery Water District, says ETTI's trenchless technology has cost the district 15% to 20% less than traditional open cut excavation.

"It's also a lot less of an inconvenience for motorists," he says.

Rogers says Kittery, which has used ETTI's services for about 40 projects over the last 15 years, is bound by a paving moratorium that prevents the water district from tearing up public roads for five years after they have been paved. The same moratorium exists in many parts of the state, he says.

"If not for HDD, we wouldn't be able to get water to certain new customers," says Rogers.

The pared-down work crew for an HDD job also helps address environmental and safety concerns. A recent study by the Associated General Contractors of America found that 38% of highway contractors had motor vehicles crash into their constructions zones in the last year.

"We can run a single drill crew and a few small support pieces that would replace a pretty good sized fleet of open cut [equipment and operators]," says Kelly.

Preparing for more growth

Kelly is excited to see his business grow, but is wary as well.

"It's a good problem to have, but on the same note, it's dangerous as well. It's something we've spent the winter discussing: how are we going to handle the growth?" says Kelly.

The company has already outgrown the building it purchased in 2001, and is eyeing new locations.

"We thought [relocating] was a 25- or 30-year problem," says Kelly.

To better serve far-flung customers, Kelly says he is looking into expanding into another Maine location and perhaps somewhere south of the state.

"We have all the natural gas work we need locally, but we do have to travel on the drill side, and we spend a lot of time in [New England] and as far away as Long Island and western New York," he says.

ETTI is also looking into integrating GPS technology into its trenchless drilling projects, which would allow the company and its clients to trace pipelines years after they've been placed in the ground.

"If someone calls 15 years down the road, we'll be able to give the exact depth and location [of a pipe]," he says.

Marks with AGC Maine says such technology could have a real impact on future construction.

"This is going to allow future generations to find that [pipe] with pinpoint accuracy, which is a big deal when you start talking about Dig Safe," says Marks. "Look at the water pipes that burst in South Portland, and think about the technology we are adding into these systems today. It's going to be a heck of a lot easier for people."

For the man who brought HDD to Maine, tacking GPS locators onto the trenchless equipment is just another step in his company's development.

"It's extremely intimidating to start any new field and we didn't know if it would be successful," he says. "So to go after something new now — like GPS — seems pretty minor after the world we've lived in for the first five or six years of the business."