In South 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.
With the U.S. projected to be energy self-sufficient by 2030, according to BP plc in its most recent “Statistical Review of World Energy”—published in June—deteriorating highways could 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 chemicals, sand and water, as well as steel structures used in the process in fields often miles from major roads, BP observed.
In North Dakota, officials have begun maneuvering over how best to fund road construction in the booming Bakken Shale field—and exactly how much money to invest.
An industry-backed study from the EmPower North Dakota Commission recommended spending $995 million on county and township roads during the 2015 to 2017 budget cycle—nearly double current investments. EmPower’s findings echoed a July 8 report from the North Dakota State University’s Upper Great Plains Transportation Institute.
North Dakota is producing just over 1 million barrels of oil per day, according to the North Dakota Department of Mineral Resources. The Bakken Shale region had few pipelines before the boom started, so most of the crude is hauled out on trucks.
The regions are so sparsely populated that about two-thirds of its roads are gravel tracks designed for farm traffic. Winter weather and the spring thaw can make it hard to drill new wells or ship oil from existing ones. State and local governments committed $523 million to road construction in the oil patch during the current two-year budget cycle.
Republican Gov. Jack Dalrymple hasn’t said how much he will recommend, but oil-patch legislators are recommending a sizeable spending increase.
The 16-member EmPower Commission, which was created in 2007 and consists of representatives from all of the state’s energy sectors, was expected to present its 2014 policy updates and recommendations on Aug. 21 to the Legislature’s interim Energy Development and Transmission Committee.
The study estimated that the state needs to invest $548 million in unpaved roads, $377 million in paved roads and $70 million in bridges during the 2015 to 2017 biennium.
Western North Dakota experienced a 25% increase in vehicle miles traveled in 2013, and as oil and gas activity continues and agricultural products are moved, the increased traffic will require additional and more-frequent repairs and replacement, the EmPower report states.
The 2013 Legislature made “substantial progress” toward meeting critical infrastructure needs by investing $2.5 billion in oil- and gas-impacted areas, nearly double the amount appropriated in 2011, the report notes.
However, “continued growth of our energy industry and the state’s economy are leading to infrastructure shortfalls and more must be done to assist communities in closing the gap,” the group states.
The EmPower group is urging the state to pass legislation within the first 30 days of the 2015 legislative session to provide adequate funding for oil- and gas-impacted areas so they can bid projects early enough for the 2015 construction season. The session begins Jan. 6.
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