This legislative session lawmakers are considering various ways to manage the oil and gas drilling boom, from reducing tax breaks to encouraging less water use. And at a conversation with several lawmakers hosted by StateImpact Texas Tuesday night, there was bipartisan agreement that something needs to be done on one issue in particular.
Fracking can get a lot of oil and gas out of the ground. But it’s a needy process. Each well can require as much as five million gallons of water to be drilled. That water is often brought to a well site with trucks. A lot of them.
“It has to be hauled in, it has to be hauled out,” State Representative Phil King, R-Weatherford, said at the panel. He represents part of the Barnett Shale region. ”To move a full rig unit may take as many as forty truck trips. And on those thin blacktop county roads, it’s tough.”
Road damage from drilling is estimated to have cost counties in South Texas two billion dollars. Democratic State Senator Carlos Uresti, D-San Antonio, who represents large parts of the Eagle Ford shale in South Texas, thinks a fix for the problem should include some state money.SB 300, to do just that, with money coming from the state’s Rainy Day Fund. “What my bill would do is [provide] one-time funding of approximately 400 million dollars to fix the county roads in those different counties,” Uresti said.
Uresti says many of the county roads damaged by drilling trucks were built 40 or 50 years ago. They simply weren’t designed to carry 80,000 pound trucks. “They’re just falling apart,” Uresti said.
The idea of using the Rainy Day Fund, which is funded by drilling tax revenues, for a fix got a cautious response from State Representative Van Taylor, R-Plano, who warned that oil and gas booms are usually followed by a bust.
“I grew up in Midland in the eighties,” Van Taylor said. “In fourth grade, my mom said, ‘You’re gonna something you’re never gonna forget.”
It was a run on a bank. “I’ve never forgotten it,” recalled Taylor. “People lined up around the block. And I saw real economic crisis.”
The big oil boom that had made Midland the tenth largest Rolls Royce market in the country in 1982, for a town of just 100,000 people, had gone bust. “That dealership was done in 1984,” he said.
Taylor said that in boom times like these, it’s best to avoid the temptation to spend too much.
“The revenue stream that brought the Rainy Day Fund to where it is,” Taylor cautioned, “at some point, all that production leads to a drop in price, and then development stops. It’s important to be careful.”
“At some point, the music just stops,” he said, referring to the rapid development of natural gas that has led to a drop in prices, making the Barnett Shale in North Texas less attractive to drill. ”Texas has been in this movie many times.”
State Senator Rodney Ellis, D-Houston, wasn’t sure that using the Rainy Day Fund was the best solution, either.
“The last two sessions it was sacrosanct, the holy grail,” Ellis said of the fund. “You couldn’t touch it. It’s amazing how that discussion has changed.”
While saying he’s “open to everything” on funding to fix roads, Ellis also said that perhaps the counties that are receiving revenue from drilling should get drillers to pay for the fixes themselves. “Should you let the money come from where the money went?” he asked.
And Rep. King said even with new funds, a fix isn’t easy. In the Barnett Shale area, a hotbed of drilling a few years ago, they suffered road damage repeatedly.
“One of the problems you run into, if you repair them, they just get torn up again,” King said. “So there’s not an easy answer to it. The counties do need some funding. ”
King also said that his area did have some luck getting drillers to help pay for damaged roads.
As for Uresti’s plan to help out counties with the Rainy Day Fund, it’s currently being considered by the Senate Finance committee.