While Profits Are Up in the Eagle Ford Shale, So is Road Damage

Photo courtesy Texas Department of Transportation.

Truck traffic on FM 81 in the Eagle Ford Shale formation area.

The Eagle Ford shale’s development in Texas is growing stronger from increasing production, as crude oil growth overtakes natural gas production. And with more production comes more profitability, according to a new report by GlobalData, a business research company.

The shale’s liquid production has increased nearly sixfold, going from 10.8 million barrels of oil in 2010 to 57.5 million barrels in 2011. With almost 6,000 drilling permits distributed since the beginning of 2011, the total gross production from the Eagle Ford shale is expected to reach 207.3 million barrels in 2012, and stabilize at 1,386.3 million barrels in 2020, according to the report. But with that growth comes a price.

Drilling trucks are doing their damage on Texas roads, especially on highways, bridges, or other roads not designed for heavy loads. The Texas Department of Transportation said Monday that damage from those trucks is at two billion dollars.

According to a report released by DeWitt County Judge Daryl Fowler, whose county sits in the middle of the shale, tax revenues from drilling will not be enough to fix the roads. The report says that DeWitt County received $7.2 million in property taxes for the fiscal year ending in September, but will need as much as $342 million to replace or repair 394 miles of roads.

“Right now, taxes and donations are the only two viable options available to fix county roads,
which may require up to $80,000 per mile to repair and up to $1,900,000 per mile to rebuild,” Fowler said in a statement accompanying the report. “Austin may be waiting for a rainy day, but you could describe our situation as similar to being in the middle of a monsoon; and it’s high time to do something about it.”

Read the full DeWitt County Commissioners report on road damage in the Eagle Ford shale:

Robb Jacobson is an intern with StateImpact Texas.

Comments

  • Hunter Scott

    The Eagle Ford is still very much in the development stage, so, yes, all of those nasty old trucks are going to beat up the roads for a few years.  But all of that will slow to a dull roar while those counties, their merchants , and citizens will continue to benefit from the extraction of oil and gas for decades after the boom is gone.  

    I think there must be some way to look at the bigger picture here, and for counties to realize that, on the whole, and in the long run, they will come ahead of the game.  Do they calculate the increased property values, motel/hotel taxes, wellhead taxes, commerce, and the thousands of really good paying jobs that the oil/gas industry create in an area like this?  My guess is, no.

    I have worked in the oil industry all over the world, including Saudi Arabia, West Texas, The Williston Basin, Africa, North Slope, and the North Sea.  I have yet to find a place where there is oil, that isn’t better off than they were before a boom.  The industry leaves in the wake of a boom better schools, hospitals, libraries, civic centers, business & industry, etc.

    These folks need to try not to demonize the oil industry.  Just take a deep breath, ride the spectacular wave, and appreciate what the total package brings to the area, not just complain about the cost to the county roads.

    Maybe local governments need to focus on how gasoline taxes are distributed by the state, as well as a few other tax issues.  Their time, effort, and money would be better spent trying to change laws, not blasting the oil industry.  That is quite literally, biting the hand that feeds them.

        

    • http://www.co.dewitt.tx.us/ Judge Daryl Fowler

      If you would read the report and the press release, you would find that the industry is not being blasted. There is a serious disconnect between Austin and the counties where the energy production is occurring. So serious that you could call it a free lunch for the State of Texas at the expense of the counties. Severance tax receipts from DeWitt County production equal $57.5 million and revenue received from the State Comptroller from Overweight Axle Fees and gasoline tax combined equal $112,000 in the most recent fiscal year. Local property taxes must increase to repair the damage caused by the damage the drilling efforts inflict on the roads. Austin postures with “no new taxes” pledges and the local elected officials take the heat. That’s the heart of the problem.

  • Mike

    I appreciate your comments Mr. Scott, but am I to believe that the oil industry is so clean and on the up and up and does not and have never had any bad players in their midst?  Because, whenver any oil industry exec talks about industry, it’s always “we’ve never made any mistakes”, “we are the good guys”.  Are we to believe that the countries best interest are your best interest?…….yeah…..now that’s pretty rich.

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