Drilling contractors discuss some of the issues of the day.

Today's drilling contractors face some challenges as well as some great opportunities. Photo courtesy of USGS.
Earlier this year, four water well contractors from Michigan met with the National Driller staff to discuss current issues. Their much-appreciated candor lent some valuable insight into what contractors are dealing with right now. The two-part article series concludes with their discussion of industry-related legislation and its impacts, as well as ways contractors can maintain the industry while at the same time boosting their own profitability.

Legislation

Legislation that's being established certainly is a hot topic. The state of Michigan recently passed what's commonly known as the 70-gallon-a-minute rule to regulate high-capacity wells. With regard to this legislation, Bill Pearson, Pearson Drilling Co., Lake City, Mich., says, “I've been feeling a little this year like a water skier. We're getting whipped by the legislature driving the boat. We're out there at the very end, trying to hang on. It seems like the rules have run ahead and we're going to have a year or two catching up, actually getting the rules interpreted to see what it's going to mean for us. I think it could be some new work, but it's going to be a challenging period here just to sort out what is acceptable.”

The problem with this rule, according to Stan Brown, Brown Drilling Co., Howell, Mich., is that it isn't applicable across the board: While the rule might make good sense in one geographical area where the formation calls for such a regulation, in another area, the water supply could be bountiful, rendering the rule unnecessary.

“Like Bill [Pearson] said, this new regulation more likely would bring more work than anything else to the professional well driller, but I hate to see a customer get abused,” Brown states. “I have regular customers that that I do large work for - some of them I consider friends. I hate to go into an area where there's just tons of water and see them have to put out an extra $20,000 to meet this rule. Now if it's in an area where there's a concern like that and I believe a large well would affect neighboring wells, then I feel it's necessary. The state at this point is going to put that rule throughout the whole state when some areas are better than others for water. We've got hard areas and those areas should be affected, but they're going to be pretty blind to that, I think.”

Also troubling the contractors is the way regulations surrounding contaminants such as arsenic are being handled. Statewide, the maximum contaminant level for arsenic is being lowered over time from 50 parts per million to 10 parts per million. As a result, water wells that met the originally established level now may not pass. Added to that, regulations may differ county to county, making it harder for contractors to be efficient.

With counties trying to do things their own way, Steve Wheeler, Ann Arbor Well Drilling Inc., Dexter, Mich., reports: “That's where we're seeing all of our problems. As far as the arsenic levels, we've had a lot of wells in the last six months or a year that have been fine in the past, never been a problem, and all of a sudden, the arsenic's too high.” He explains that some counties are trying to establish maximum arsenic levels lower than what state law mandates. Wells that once passed inspection now fail, which creates problems with homeowners who have trouble selling their property as a result.

Learning about a contaminated well through a health department's letter in the mail often frightens homeowners, who then may blame the contamination on the contractor responsible for drilling the well. “I do think it's a lot how it's presented to them,” Wheeler notes. “Before the arsenic/nitrate things, it was bacteria. We would get homeowners calling up, 'Well, the health department called us and said it's unsafe, you can't use it.' The first thing it does is scare them just by the way it was presented.” He goes on to say that a bit more explanation and less scare tactics would considerably reduce homeowners' fears.

Steve Buer, Buer Water Well Drilling, Caledonia, Mich., points out that the impact of current ground water legislation is not restricted to which wells and owners that will be affected; the ripple effects could be wide-reaching: “The problem with those rules is they're not good for our industry, even though they make work, because arsenic and the 70-gallon-a-minute rule put a negative spin on ground water. Any rules like that - that make our industry look suspect, as if we're pulling too much water out of the ground or as if the water's not safe - the way they're presented in the media hurts us, it doesn't help us. Even if it makes more work, it always pushes toward that long pipe solution - 'We can solve all your problems with municipal water.'"

Customer Service and Preventing the Spread

Discussion ensues about how some consumer priorities have changed. Cost, although important, no longer appears to be the determining factor for how people spend; instead, the service they receive takes precedence. With this in mind, the roundtable contractors consider ways to market to this audience.

Service agreements emerge as one method contractors could use to enhance their offerings. “One area our industry needs to look at is the service contract,” proposes Buer. “That could be a business unto itself, especially with increased awareness of water quality. Consumers just don't want to mess with anything anymore. People have less time, more money. They just want everything to go smoothly, and a lot of people would pay to have their systems annually checked.”

Other areas to augment profits: repair work and weekend service. “When people need service, they need it now,” Buer explains. “They're not doing as much shopping. If you're available, they want you there. We have weekend service that we implemented. We tried to set our rates high enough that people would be discouraged from [calling] but it doesn't seem to work. The guys keep telling me we should raise it because people don't even blink. It's a good market.

“The biggest thing we've found is you've got to get paid on the spot,” he advises. “People change: They're really happy when you came and they appreciate what you did, but it usually wasn't a budgeted item. If you get that bill out there in a few weeks when you got around to it, that's a hard collect. That was killing us, so we're switching: When we leave, we want a check, especially on those weekends when you've got those big rates.”

“We've just implemented that service,” Pearson adds. “We actually try to get a credit card number when they call. A couple years ago, when there was no snow in the north and it was extremely cold, everybody froze up, then thought it was an act of God - 'We don't have to pay.' It was unbelievable.”

Water testing is another avenue for potential growth, Buer informs: “We've had changes with the health departments around us. One county informed us they were no longer doing water testing, so we had to start making that adjustment and we educate the customers. It's an opportunity; you can make money there, drawing samples, getting them to labs, getting results. You just adjust. You either can have a negative attitude or you can go make money. Basically, people around us just want service - the more you can do for them, the happier they are.”

The new arsenic regulations, while challenging, also can serve as an additional opportunity for contractors to expand service offerings.

“I think they're willing to pay for the extra system, at least the ones we've run into,” says Wheeler, discussing consumers' willingness to purchase arsenic treatment. “We don't actually put systems in, but the way they talk is that if it will take care of the problem, then they seem to be willing to do whatever it'd take to do that.”

Explaining how his firm has adapted to the situation, Brown reveals: “We're putting in larger arsenic-removal systems for larger-capacity wells, and it's actually boosted our income. We've been doing that for probably five years now.”

Importantly, catering to customers' needs creates not only a possible road to profitability, but it also establishes a means to preserve the industry. The way to prevent the spread of municipal systems, according these contractors: exemplary customer service and professionalism.

“With everything that happens,” Buer asserts, “we've got to think ahead: How does this in the big picture reflect on ground water and the use of it? It seems that every issue now is tied to that because, for the state and the powers that be, there's such big money in municipal water. It's hard to hold it back.”

Brown agrees: “You've got to treat the customer well and do a professional job. If you've got a problem with something you've done - because well drilling's like that, you have problems - you've got to go back and fix it. That's how you slow down the water mains.”

By all accounts, the industry has come a long way and has become increasingly professional. The contractors report visible progress and acknowledge the great strides being made - serving the customer takes top priority in many drilling firms.
ND