Brock Yordy:  

Good morning, and welcome to The Driller Newscast, a weekly update on the news and stories impacting the drilling and construction industry. I'm your host, Brock Yordy, and Episode 124 is brought to you by our friends at Derex. Decades of experience and dedication to innovation have made Derex one of the fastest-growing drilling rig manufacturers in Canada. 

The imagineers behind the best domestic dual rotary drilling rig now offer drills to meet every need of the serious water well, geothermal, and RC exploration driller. Thank you, Derex and team. Head over to the Derex website and check out all the great things going on; engage with the team. They're always looking to innovate, and we really appreciate you helping us support the news this week. 

In the news, we'll cover the EPA’s webinar on recommendations to consolidate rural water systems, which will happen tomorrow, Tuesday, at 2 p.m. Next, we'll jump to the Department of Interior and Bureau of Reclamation, where we will discuss funding for abandoning orphan wells, water infrastructure and drought resilience funding, and the Bureau of Reclamation's 2024-2025 allotment release for the Colorado River states. It's a big deal. We all need to be paying attention to this. 

Our feature this week is celebrating Labor Day, the history and the importance of the construction and drilling industry for driving what is the entire embodiment of Labor Day. But before we get into all this great news, let's talk some safety. 

Safety When Trenches Collapse

A week from today is Labor Day. We need to think about why we have a National Day for all the hard-working individuals out there. So I'm going to pull us back. We're going to get a little somber because excavation and trench fatalities in our industry are avoidable and just infuriate me at this point since we've gone from 40 fatalities in 2022 to 15 last year to over half a dozen this year. This is directly from OSHA. At the end of August, in Oklahoma City, an Edmund contractor with a history of workplace safety violations dating back to 2018,  including three related to the dangers in underground trenches, was found disregarding U.S. Department of Labor regulations.  

In February 2024, investigators with the Department of Occupational Safety and Health Administration—OSHA—learned a 61-year-old pipe layer employed by JLO construction company suffered a fatal injury when a 9-foot deep trench collapsed at a residential work site near Shawnee. Nine feet? Come on, industry. Five feet and deeper; slope it, shore it, shield it. Understand our soil classifications. Yeah, we get into some crazy red dirt out there in Oklahoma City, and it stands up pretty hard, and it's dry, but this is unacceptable. The agency determined the employer allowed their employees to work in an excavation without proper protections, including shielding, benching, sloping, or other devices.

The incident occurred as employees worked below the surface to install an eight-inch water line. Here's the quote: “No one should ever be allowed to enter or work in an excavation without the required protective systems in place and without inspection of the trench by a qualified person.” This was stated by OSHA area director Stephen Kirby in Oklahoma City. 

He continues, “Despite numerous warnings and notices of violations for failing to protect employees in trenches, Jerlow Construction has joined the all-too-long list of employers whose defiance of federal regulations resulted in the preventable loss of life. Their failures are inexcusable. OSHA issued citations to the construction company, one for repeat violations and three for serious violations following this incident investigation; infractions include failing to provide adequate systems to prevent trench cave-ins, preventing training employees on how to recognize hazards related to excavations, and not performing daily inspections to verify safe entry conditions for the excavation.” 

This construction company faces $85,173 in proposed penalties, which is an amount set by federal statutes. This construction company is 51 years old and knows better. We need to understand this as an industry. Our public is starting to understand this situation, and we have plenty of safety stand-downs. To see how far this has gone, last month in July, NPR’s 1A series, which airs at 10 and 11 a.m. Eastern Monday through Friday, in conjunction with Texas National Public Radio, released the story on the 19th of July. And then again on All Things Considered on July 21st. 

Go, you can ask any of your smart devices to play National Public Radio and hear these. These two stories discuss the risks of trench fatalities and the uptick we've talked about which we have covered several times on the news. July of 2022, I will never forget when this email came across as a safety professional on the safety stand down for all that was happening with OSHA and these violations. 

It started with 22 men who died in trench collapses in the first seven months of 2022. National standdowns happened more, inspections happened, OSHA put out a call to action, and an investigator on their way to a project; if it wasn't to inspect a horrific event resulting in a fatality, they were to stop and check out all excavations they passed. 

Yet again, from the end of July to December 31st, 18 more men climbed into trenches and were killed. Last year, the number was 15, and it's unacceptable as we think about this. And as you listen to this NPR story, they talk about the two young men in Boston who climbed into the trench that resulted in that site supervisor going to court for manslaughter. And, of course, as they have these discussions, they talk about the fact that fines aren't paid. 

There's even a point where a loved one of a fallen construction laborer who was killed in a trench stated OSHA needs to get out from the office and behind their computer and go out and inspect and that this can't just be after fatalities. OSHA replied in that story, stating, “OSHA conducts between 1500 and 2000 trench inspections annually, which is 5-7% of all workplace inspections, and that includes sites where workers have been killed.” 

OSHA has 840 compliance officers who handle work sites around the country. Those worksites range from roughly 7 to 9 million active sites a year. A former OSHA official, Jordan Barab, stated, “It's a matter of resources.” We have seen the Assistant Secretary for OSHA, Doug Parker, state many times on the Newscast and throughout the country about the focus forward, mental health, trench collapses, confined spaces, and everything that drilling touches. We need to think about that. 

So, as we roll into Labor Day, I want you to think about who our competent people on site are. What is our plan? Are we doing trench inspections? Do we understand sloping, shoring, and shielding soil when we need engineered controls? Can we classify soil effectively with the wide range of crazy weather we have? These are all the things I want you to think about as we get ready to celebrate all the hard work we do. 

Our people have to be empowered to say, "Stop, this feels bad." We should not be jumping in trenches at 8 and 9 feet—we shouldn't be jumping in trenches at 5 feet that don't have the proper sloping, shoring, and shielding. And for that point, if we have cutting piles that are 2 feet or closer to the leading edge of that trench, they are a consideration for collapse, and when OSHA inspects, they’re going to go from the top of that cutting pile. Let's get it together, industry. Go out, be safe. 

EPA Webinar on Consolidation Solutions for Public Water Systems 

This week in the news, we’ve got a bunch of government agencies out there working hard, distributing money, and discussing the impacts on rural water systems. We're going to start with the EPA, which is hosting an important webinar on Tuesday at 2 p.m., August 27th. If you're listening to the Newscast right now, Monday, August 26th, you need to get somebody within your company signed up to listen to this webinar. It is a webinar to provide information on consolidation solutions for public water systems and how data, direct engagement, and experience can create feasible consolidation solutions. 

Oh, what did I just say there? They're looking to take smaller rural water systems and consolidate them together, or into a bigger one. This is held by the EPA on Tuesday, August 27th at 2 p.m. Eastern. The webinar, Consolidation Partnership and Regionalization, which is its title, is hosted by Andrew Murray, a geographer with the EPA Office of Research and Development, and Chad Fisher, a supervising engineer with the California State Water Resource Control Board. 

They are going to discuss the Safe and Affordable Funding of Equity and Resilience. It's called the SAFER Program, which uses data to identify needs and guide decisions on sustainable drinking water solutions. They've had issues with smaller water systems and how they state this is, “Struggling water systems continue to struggle with providing safe drinking water.” 

Furthermore, the presentation examines the national geospatial data set of community water systems service areas. What the heck am I talking about there? Here's the deal, everybody. They have developed data sets to create acrid links between drinking water providers and associated consumers and to show how the data can be integrated into other areas such as environmental justice and health. 

We need to have some folks on this call and look at the big picture of what it means to consolidate rural water systems, funding, how this leads into PFAS, and lead. So, what is the national geospatial data set of community water systems and surface areas? It is a geographic area that receives drinking water from a given system, and understanding who is consuming that water, understanding the boundaries, and taking those data sets and looking at the population and demographics. 

Ultimately, this data can be used to improve drinking water planning, environmental justice analysis, emergency response, and more. I want you to think about Flint. I want you to think about Jackson, Mississippi. I want you to think about Alabama and Louisiana, all these places where we've seen some really poor management of water systems and how it's impacted its people. 

I also want you to think about how we start consolidating and how Georgia has done a great job combating mandatory hookups or where somebody has the right to have their own water well. So the modeling they're doing here and our understanding of it is a big deal. The way they're going to use it as a resource tool and how we, as groundwater professionals and drillers, use it as a resource tool. 

Orphaned Well Funding Increases 

Jumping beyond that into how the government is pushing more money into great drilling companies’ hands, the Department of Interior has just released the next round of funding for orphan oil and gas wells—$775 million is what's been released now. They've announced this for 21 states to clean up legacy pollution through the Investing in America agenda. 

These historic resources to clean up orphan and gas wells and well sites have already distributed $1 billion and created good-paying jobs that have helped continue progress in the drilling industry. I want you to think about it. If you are capable of pulling deep wells and you have the tools and equipment at hand, you can apply for this grant funding to help abandon these wells. 

And we're going to get into the numbers in a minute. But let's just say there are over 100,000 documented orphan wells out there where almost 10% of our population lives within one mile of these wells that are contaminating the air with methane and pooling and causing groundwater and soil contamination. There are a lot of pieces here from the infrastructure law that has put $4.7 billion into abandoning these wells. 

You need to think about your state and how you can get involved in this. Look at all of the plugging that's gone on around the country. We've been doing this since August 2022. As I said, there are over 100,000 orphan wells out there. We've plugged 8,200 of them. So there's lots of money, and there's lots of opportunities for you to get involved. 

Only 21 states out of the 50 have done it. And I'll tell you what: Pennsylvania, Kansas, Oklahoma, Texas—you have done a heck of a job at using that funding, distributing it, and getting more funding. And that's how this next $775 million has come out. 25 states have grants right now. Phase one, we put $444 million into this. And now we're in phase two, and this is a big deal. We need to look at how we plug these, how we can be a better steward of our environment, and the prioritization of plugging these polluting wells that are creating all sorts of issues for disadvantaged communities, tribal nations, and elsewhere. So it's time to get out there. It's time to start talking to your state and figuring out where you can get some of those funds. 

Colorado River Basin Allotment 

As we go from the Department of Interior, I want to jump right into the Bureau of Reclamation, which released the Colorado River Basin last week, August 2024, a 24-month study that gives us our operating levels and projected numbers for 2025. The numbers look good, everybody. 

Based on the projections in the study, Lake Powell will operate in a mid-elevation release tier for 2025. It's been a while since we've been there. And Lake Mead, I want you to think about from Powell to Mead the impacts of climate change, snow melt, the consumption of water as we're moving from the upper basin to the lower basin, the tribal nations, the fact that we have to release water to Mexico, California being the senior water rights holder. 

Lake Mead will operate in a level one shortage condition, which will require Arizona, Nevada, California, and Mexico to continue working within the drought contingency plan for 2025. Mexico will receive 30% less. 

The great statement here is that it says Lake Powell and Lake Mead are at a combined storage of 37% of capacity, and this is directly due to all of our work at water conservation and the Inflation Reduction Act money that has been put into strengthening our water infrastructure, stormwater capture, desalinization, setting aside crops—there are so many pieces here that have helped us strengthen the water security for the Colorado River. 

They state, “The Colorado River system is already showing significant improvements as a result of water savings from the historic investment in conservation and infrastructure improvements through the infrastructure law and Inflation Reduction Act. These improvements have provided funding to local, state, and tribal communities to tackle the climate crisis and unprecedented drought conditions. Water conservation agreements implemented under the lower and upper Colorado River basin, with the idea of conservation and efficiency programs, have helped push us across the finish line that we're at here.” 

Obviously, we're not out because here's what's been stated about operations for Lake Powell mid-elevation released here, “The study shows that the projection for January 1, 2025, Lake Powell elevation will be at 3574 ft, which is 126 ft below full pool and about 84 ft above the minimum power pool,” which means we are in a safe place for power generation. 

Now, how did we do that? We are able to stay within that 7.5 million gallons that need to be released so that the upper basin states can continue allowing that next water to reach our lower basin states. Sadly, the study shows that Lake Mead needs more work. As of January 1, 2025, the elevation looks to be 1062 ft, which is about 13 ft below the trigger of 1075 ft that we would like to be at. 

This means that Arizona, California, Nevada, our tribal nations, and everybody on that lower end are going to have to continue to work harder and figure out how to overcome this. So right now, Arizona is still reducing by 512,000 acre-feet for 2025, which is 18% less than its apportionment. Nevada will do 21,000 acre-feet of water, which is 7% less. And Mexico will get 800,000 acre-feet of water, which is 5% or less of its allotment. 

We didn't say anything about California. We know the challenges that California has as a senior water rights holder and what they're getting into with the allotments out of the Colorado River. But just a few days before the plan was released, we had big news out of California's Imperial Irrigation District Board, which agreed to leave 700,000 acre-feet in Lake Mead through 2026. 

It's a big deal, and it helps us reach that 1075 operating level that we'd like to be at. This all came from the conservation agreement that the Imperial Irrigation District has with the federal government and the plan. I want you to think about this: California has been challenged multiple times to reduce the demand for water from the Colorado River. 

Obviously, these conservation challenges have come with a big golden carrot of 250 million more dollars for federal funding for the Salton Sea restoration. But we've seen multiple million-dollar contracts and opportunities for capturing a million acre-feet of stormwater, as well as how we work with desalinization. There's a lot of pieces here, and we've seen that the Inflation Reduction Act has had $4 billion in funding to the Bureau of Reclamation for mitigating the Western drought crisis and how we get there. 

We've also seen through the farm bill and other pieces of IRA for setting aside crops for smart irrigation policies, which has led up to this ability to leave 700,000 acre-feet. But here's the deal: in 2023, the Imperial Valley conserved 106000 acre-feet with their conservation practices. And if we go back two decades and we look at 2003 till now, they have conserved 7.7 million acre-feet of water. To put that into reference, the lower basin allotment is 7.5 million acre-feet of that 15 million estimated that the Colorado River has to give. 

So, Imperial Valley, you're doing a hell of a job, especially when we think that one in six farming jobs come out of that irrigation district for the Western United States. As I see it, we're doing some good things. As we've seen in the last two years, there is $12.5 billion that has been allotted for federal infrastructure law money and Inflation Reduction Act money for the Western United States drought resiliency and storage. 

As we look at all that's happened in the last two years for this funding and we think about the drilling industry as the way it is, the pump industry, what we're involved in for construction, for geotechnical, environmental—Arizona, California, Colorado, Idaho, Kansas, Montana, Nebraska, Nevada, Texas, Utah, and Wyoming have all had access to funds and have helped conserve water that can be used back to all of those residents and tribal nations and farms. 

So, go and look at the Bureau of Reclamation's website and see all of those 567 projects in the States. And I just focused on the Western United States, but we've had Eastern United States projects, we've had Mississippi projects. This is a great thing, and this is the government Executive branch agencies using their ability to qualify projects, have scope of work, be able to put this money out in the right places, and help propel our drilling industry, our pump industry, and help conserve groundwater. That's a big deal. 

Celebrating the Workforce—Past, Present, and Future 

For this week's feature, let's talk about celebrating all those good working men. No, good working men and women. Doesn't sound right either. This is 2024, which is no longer our grandfather's construction industry. 

Let's celebrate all those working individuals out there. We have to recruit more. One week from today is the 130th anniversary of the national holiday, Labor Day. I want you to consider how Labor Day became a nationally recognized holiday. It's our day. It’s for all of us who have dirt under our fingernails, muddy boots, copper coat that will never come out of that washing machine after it went on the spin cycle and has been staying there. My wife still doesn't forgive me. 

For all of us who have worked covered in sweat, had that washed off by rain, and worked in the snow and ice, it's for all of us on Labor Day. Our country is what it is today because of what we've been able to do for it. We’re a proud industry. And when I say that, I mean the construction industry. And as we look into it further, I think about us in the drilling community. 

So next Monday, as you throw those steaks on the grill, fuel up that boat so you can take your Children tubing, you grab that ice-cold drink, and sit down in the shade to appreciate a strong three-day weekend, I want you to think about the significance of the construction industry and more importantly, our part in the construction industry of discovering the unknown as drillers.

A Look at Workforce Data 

It's been a while since we've hit on these numbers. I feel like rolling right into September; it’s a good time to do it. 8.25 million Americans work in construction, generating $1.65 trillion worth of business annually. All of us out there with the dirt under our fingernails and the floorboards that are never clean of that vehicle, 20% of that 8.25 are management, business, financial operations— what we should just call ‘overhead.’ 

This is our Monday. Sorry, overhead. No, we all work here together, and we need to think about being together and how we represent ourselves because there are 8.25 million working Americans every day. In comparison, there are over 162 million Americans who work every day. It's not a big piece at all. 

So while you’re relaxing, I need you to consider that one in five construction workers is 55 or older. As we look at it for the drilling industry, it’s even more. One in four are over the age of 58 years old. Our industry is still predominantly men, with around 6 to 7% of the population being women. 25% of our workforce are foreign-born U.S. citizens. That's impressive. 

We have doctors without borders; we should have drillers without borders. We have great men and women and individuals out there who should be drilling where the work is. Highest paid construction jobs? Electricians, plumbers, pipefitters, and carpenters. Why? Because we have teachable lessons and we have skills programs across the country that make these individuals competent and capable of getting out there. 

We're now seeing this ramp-up with the center of excellence that will be teaching drillers, and we need to embrace that in that teaching program. It goes from being an assistant who ensures that the driller is able to do everything possible at the platform and not be distracted to becoming an assistant driller, helping with tool handling and breakouts, to one day being a driller. 

It's not ‘So you think you're going to be management now because you've had two or three weeks of formal training,’ we have to grow up, industry, and that's back to the commentary. This isn't 1970 anymore. We don't have 12, 14, or 20% of our population working construction every day. 

The average pay in America right now is $27-28 an hour, and the median construction pay is still $23 an hour. I want you to think about our rural communities as we go to work on water wells, drill geothermal projects, geotechnical investigation, and construction drilling. How many of those big warehouses do we see popping up so that we have that box with a smile on it within two days? Climate-controlled starting wage is $28-30 an hour, and 40 hours a week is guaranteed with 401k and insurance. 

We talk about this being a young individual's game, and it comes back to the fact that their back is unbroken, and they don't have commitments with that forever partner yet. So, let's face it: what happens the moment a good individual decides to start a family? They often leave for the security of a job that has better insurance and more competitive pay. 

The unemployment rate right now is 3.4%. We're seeing 25-30,000 new construction jobs a month right now in the United States. So we're much below that. So, 1.15 million construction workers. Out of that 8.25 million, 1.15 million, about 14.3%, work in something that has to do with excavation, extraction, construction, or occupations. I believe everything that has to do with construction starts with drilling, but we just went from 8.25 million to 1.15. 

So, I want you to start thinking about skilled drilling professionals. That driller is what goes on their designation, their business card. You know, I work in the drilling industry, and we see that it's about 3% of that 1.15. It's about 35,000 individuals that identify themselves as drillers. So we have some recruitment to do. 

We need to start thinking about Labor Day, and I want to leave you with a little bit of history. The first Monday in September, the Labor Day celebration, started in the late 19th century when labor activists pushed for a federal holiday to recognize the many contributions workers have made to America's strength, prosperity, and well-being. 

Before it was a federal holiday, there were several states across the country that had started recognizing this day with ordinances. Then, Grover Cleveland passed it as the first national holiday for laborers on June 28th, 1894. He asked Congress to do that. It's crazy because as you read your history on this, Peter J. McGuire was the first speaker at a Labor Day celebration in New York City in 1882. Some say he was a laborer; others say he was a machinist or a pipe fitter. But it is very cool as we go back and we look at this idea 130 years ago. 

But why did Labor Day become a thing? Why did we organize? Because government branch agencies didn't exist to protect our workers. And here, I come back full circle and I'm talking about these agencies again. 

But the importance of the EPA, the importance of the CDC, the importance of OSHA all come back to ensuring that we go home safely, and that's the important piece of Labor Day. 

Whether it was Peter Mcguire or Matthew Maguire, they both marched at the first National Labor Day parade in New York City. So, as an industry of operators, laborers, fitters, and everything we do in this industry, we're all better together when we recognize our roles or responsibilities and have everybody's back. 

So it's Monday. By Friday noon, our people will be ready to hit the lake and start that three-day weekend. Let's let them get out there. They're already mentally there. We might as well get them there physically while being safe. It's the end of summer. Cheers. I toast all of you, and I appreciate you. And the next time you look down at your fingernails, you go, “Oh, I should wash my hands more,” or whatnot, smile, and realize you helped build this country to a better place.

Cheers everybody. 

Thank you for joining us for Episode 124 of The Driller Newscast. Check out thedriller.com. JJ is bringing out great news from DC about what's happening with PFAS and legislation, OSHA, and all of the things that happen at the State Capitol. And then, we got Sammy, that is bringing us those great stories like Tucker Johnson, a Future Driller, history, and legacy, along with what's happening in the Western United States. 

We couldn't have two better individuals looking at our drilling industry and water right now. When you really think about it, we’ve got Idaho and Washington DC, and then we’ve got the Yordy family in the middle with the BNP production team in the mitten state of Michigan with the Great Lakes. 

We’ve got you covered when it comes to water, drilling, and construction. Thanks again to Derex. Go check out their website. He is innovating every day, from hands-free rod handling to RC rigs, from what the next generation of a geothermal rig looks like to what he could be producing for the Southeast for limited-location drilling for water wells. Gotta love what Derek and his team are up to as imagineers for the water well and drilling industry. Thank you. 

Go out and be safe. Again, it's going to be Labor Day, so you won't see another Newscast for a bit. Episode 125 will drop on Tuesday. It will be September. Go out. Be safe. Thanks.