July 11 (Bloomberg) -- The road to U.S. energy security is often unpaved.
In southern Texas and North Dakota, where shale drilling has propelled U.S. oil production to the highest level in 28 years, thousands of 18-wheel trucks are rumbling to wells on roads designed decades ago for farmers to bring crops to markets. Road closures have slowed output, with diverted traffic increasing accidents, as Texas seeks $1 billion to maintain roads in the oil belt.
With the U.S. projected to be energy self-sufficient by 2030, according to BP Plc, crumbling highways may threaten billions of dollars of investment in the oil patch. Because more wells are being drilled using hydraulic fracturing, there’s greater need for truckloads of water, sand and chemicals, as well as steel structures used in the process in fields often miles from major roads.
“If you drive a cattle truck one or two times a year, you’re not affecting that road very much, but the first day you drive a 175,000-pound substructure of a drilling rig up that road you begin to destroy it,” Daryl Fowler, the county judge in DeWitt, Texas, said by phone May 20. “You’re looking at $2 billion of capital investment in our county alone that will be thwarted or curtailed completely if the road system is abandoned and they can’t get their product to market.”
DeWitt County is in southeast Texas, about halfway between San Antonio and the Gulf of Mexico, and in the heart of the Eagle Ford shale formation. About 87,000 barrels of oil a day were extracted within its borders last year, more than in 39 states and all but five other counties in Texas.
Rosetta Resources Inc. was trucking oil from a well on the western edge of the county in January 2012, when a severe rainstorm hit. A half-mile stretch of road from the gate to the state highway was impassable.
“Trucks full of liquid product got stuck and the company had to use bulldozers to pull loaded 18-wheelers in and out of there,” Fowler said.
A Rosetta spokeswoman didn’t return a phone call or e-mail for comment. Fowler said the company donated materials and the county was able to repair the road and get the company operating again.
Drillers acknowledge the added challenge of operating on south Texas roads, especially in the rain, said Haley Curry, a spokeswoman for South Texas Energy & Economic Roundtable, which represents the 11 largest operators in the Eagle Ford, one of the fastest-growing oil fields in the world.
“If it rains, everything slows down, no matter what industry you’re in,” Curry said by phone from San Antonio July 9. “It’s just part of doing business.”
In North Dakota, nice weather may cause the biggest road problems. As the freezing winter thaws into spring, soil softens beneath roads and the state highway department restricts truck loads. The limits typically last from March through May or June, and for the past five years they’ve stayed on some highways in the Bakken area year-round.
Road issues, bad weather and exhausted wells have hampered crude production growth in North Dakota. Oil output from the state’s portion of the Bakken shale grew 24,000 barrels a day between December and April after growing 166,000 barrels a day from June through November last year.
One reason for the slowdown is that output from shale wells falls by 60 percent to 70 percent in the first year, according to Austin, Texas-based Drillinginfo Inc., a steeper decline than for traditional wells. Companies need to finish new wells constantly to keep production growing.
Drillers make horizontal bores along the shale and then completion teams inject a high-pressure mixture of water, chemicals and sand to create micro-fissures in the rock through which gas and oil can seep. The process means more truck trips are required than for a traditional vertical well, Curry said.
The increase in traffic has been accompanied by an increase in accidents. In La Salle County, Texas’s No. 2 oil-producer, car wrecks more than doubled to 232 last year compared with 2003, and fatalities rose to nine from two, according to state highway department data.
“Everybody is concerned about the number of fatalities,” La Salle County Judge Joel Rodriguez Jr. said by phone.
The trucks also come with jobs, 46,289 of them in the Eagle Ford, according to a University of Texas at San Antonio study conducted last year, and 24,012 in North Dakota, according to the North Dakota Petroleum Council. Officials in both states say they’re not trying to stop the boom, just to find ways to fix the roads and minimize the negative side effects.
North Dakota’s Department of Transportation has increased its road construction budget to $800 million a year from $250 million in 2007, Jamie Olson, a Bismarck-based spokeswoman said by phone July 3.
The Texas Department of Transportation is hoping that residents will pass a November constitutional amendment that would allow a $1.4 billion portion of oil and gas tax revenue that currently goes to a rainy day fund to be slotted for highway work instead.
“We know that $1 billion will be needed to maintain roadways in all energy producing areas of our state, including South Texas,” Nick Wade, spokesman for the department, said by e-mail July 9. “That’s in addition to the $1 billion needed for regular road maintenance, and the estimated $3 billion for new construction to address congestion,” he said.
The Texas legislature passed bills last year allotting $225 million to the state highway department and another $225 million to counties to repair roads damaged by oil-field trucks.
It was the first time the state has ever given county governments money for road projects, Fowler said. The money doesn’t get counties very far, though. DeWitt expects to get $4.9 million, compared to an engineering estimate of $432 million to fortify the 315 miles of roads it maintains. La Salle County has sued the state, alleging that most affected counties aren’t getting a large enough share.
“School buses run up and down these streets -- ambulances, fire trucks, emergency vehicles,” Lonnie Hunt, Austin-based spokesman for the Texas Association of Counties, said by phone July 8. “The roads are there for everybody to use.”