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The House Committee on Transportation met on April 17, 2018 to discuss the following interim charge: Evaluate the impact energy exploration and production have on state and county roads and make recommendations on how to improve road quality in areas impacted by these activities.

This report is intended to give you an overview and highlight of the discussions on the various topics the committee took up. This report is not a verbatim transcript of the hearing; it is based upon what was audible or understandable to the observer and the desire to get details out as quickly as possible with few errors or omissions.

Randy Hopmann, TxDOT

  • Gave background on TxDOT energy related projects
  • In 2016, TxDOT met with energy partners throughout the state to determine which energy corridors need to be prioritized.
  • Worked with trade associations and elected officials to work on these corridors.
  • Road activity is disproportionate to population in Eagle Ford Shale and Permian Basin.
  • Number of fatalities in these active energy areas is alarming. Permian basin contains only 2% of the Texas population, but has 10% of the traffic fatalities.
  • On the lookout for sand mines for potential fracking.
  • We have an increased number of bridge strikes in which the bridge becomes unstable.
  • We are fortunate to have a good pipeline infrastructure in the State of Texas.
  • Pipelines help to take trucks off the road and make everyone safer.
  • Israel: Why is the South Orient being used more frequently?
    • For the past few years we have worked to improve the rail line and as a result train speed has increased.
  • Israel: Because it is going faster, you believe it is perceived as another asset?
    • Yes.
  • Israel: What is Texas Pacifico doing to benefit the rail line
    • They advertise.
  • Israel: Since it goes into safety, I think you should check with them and hold them accountable. Is it on your agenda to increase rail use?
    • We would like to see increased use as it contributes to road safety.
  • Simmons: Was the $84 million we put aside last session used up?
    • Yes. The funds that were in HB 1025 and other funds have all gone to construction and those projects should be wrapped up soon.
  • Simmons: The timeline of Eagle Ford and Permian activity has vacillated in recent years.
    • The fatality graphs tend to track spikes in activity. In 2017-18 we see a substantial increase in activity.
  • Simmons: the $2.1 billion funding, how did they come up with that?
    • It is Proposition 1 money.
  • Simmons: You don’t know why they specifically chose $2.1 billion?
    • The plan we developed was about 3.1 billion based on the needs we saw.
  • Simmons: These monies go exclusively to State maintained roads, not county?
    • Yes.
  • What is the status on reconstruction of the Presidio bridge?
    • We are very close.
  • Israel: TxDOT has testified in the past that it wasn’t the road conditions that were causing safety problems, that it was the road user. Do you have any information for us to do our due diligence to encourage safe driving practices?
    • We work with law enforcement to educate people on safe driving practices. But it is important to note that increased activity leads to more dangerous situations.
  • Israel: You’re not stating that because of increased activity that we have to accept more dangerous situations?
    • Statistically that is the case.
  • Israel: We can handle more traffic without expecting more danger. Cut down on distracted driving and increase law enforcement.
    • That is correct. We have done campaigns which educate people to be aware of their environment on the road.

 

David Underbrink, Hanson Professional Services

  • Gave history of his experience researching road engineering.
  • Rural roads are unable to handle heavy traffic.
  • Permitted overweight vehicles cause the pavement to move out of place.
  • Pavements need safety measures.
  • Simmons: Are roads you are talking about build to handle 18-wheelers?
    • Legally they can be on the road, but the road is not ready to handle that load.
  • Simmons: Is it your opinion that if these tucks had additional axles there would be less damage to the road?
    • That could have an impact.
  • Is an increase in the axle requirement have better distribution of the load?
    • Yes, but these rural roadways have a small width and increasing the truck width would make them run off the pavement.

 

Questions for the panel:

  • Pickett: Question for Hoppman, can you talk about what percentage of TxDOT’s budget do those numbers make up?
    • Roughly 10%
  • Pickett: Where are those funds distributed?
    • Maintenance strategies and other projects across the state.
  • Pickett: These are funds generated in energy areas of the state, but the entire state benefits?
    • Correct.
  • Pickett: Are you aware of any other region in the state that has such a disproportionate fatality rate, besides Permian Basin and Eagle Ford?
    • No.
  • Pickett: How big of a priority is safety to TxDOT?
    • That is our number 1 priority.

Daryll Fowler, DeWitt County Judge

  • Gave history of his experience on energy transportation related projects.
  • Gave history on legislation concerning funding for county road projects.
  • SB 1747 was only a temporary solution to a long-term problem.
  • Stakeholders in our county believe there it at least ten more years of continued drilling.
  • Our roads were not designed to withstand the continued onslaught.
  • These are the same roads that school buses and first responders drive on. “As well as grandma and grandpa Schultz when they’re trying to get to HEB”.
  • Our current county budget includes almost $20 million for road construction and maintenance. If we spend every dollar appropriated this year, that will send us over the $120 million accumulative mark.
  • Under our reconstruction programs, we are working to meet standards engineers have set.
  • Some of our roads are costing more than $350,000.
  • Our taxpayers do not want us to go into debt to fix these roads. We hope the legislature will be benevolent and bestow upon us a gift.
  • Our road repair needs are not diminished, but our oil wells are.
  • It is unfair that severance tax does not go to counties where it is produced.
  • Simmons: The values of interest in Dewitt County have gone down, but activity has gone up. How is that?
    • In January 2014 drilling had ceased, companies retreated, and the wells depleted.
  • Simmons: In 2015, things had dropped off quite a bit. When you got your allocation, were you able to get your roads back in good order?
    • The allocation was used across four projects. We made up the difference that the Legislature would not pay for.
  • Simmons: How many miles of road need repair?
    • We have spent millions. In the impact zone there are well over 100 miles in dire need of work.
  • Simmons: What do you want the legislature to do?
    • The last thing we want to do is raise the tax rate on our people.
  • Pickett: How much would you need on an annual basis to get caught up?
    • For the last 2-3 years we stayed at $19 million.
  • Pickett: What was the number you said was generated by production in your county?
    • Production tax in 2017 was $172 million.
  • Pickett: That is from one county in one year. Do you think the industry is willing to pick up the slack if that state does not? These industries need those roads too. The legislature is a hard sell because you have so many competing priorities.
    • I haven’t taken into account county registration fees.
  • Pickett: Maybe that is something we can help with too. Under current law you could partner with another entity.

 

Shelby Dupnik, Karnes County Commissioner

  • Conoco Philips will drill their last well in Karnes County in 2038.
  • County road issues have not changed. Trucks have to drive off the edge of the road and make the damage worse.
  • We receive $7 billion dollars and used every bit of it on energy roads.
  • We have spent almost $14 million on road material from 2013-2014.
  • In our county we have trucks hauling sand boxes which hold 45,000 lbs. of sand. These trucks park on the edges of the road and cause greater damage to it.
  • During Harvey we had trucks recklessly driving on the road. They called us to help get them out, we said, ‘No, get yourself out. You got yourself in there now get yourself out. We have other issues’.
  • We want to ensure we take care of our roads.
  • DPS taskforce used to always come into the county, but we don’t see them anymore.
  • Karnes county accidents are on the rise.
  • We are asking for help to maintain what we’ve got.
  • I get upset when I see a license plate from another state. They don’t leave after thirty days, they stay here.
  • Please give us some crumbs to help us get through.

 

Danny Garcia, Victoria County Commissioner

  • There is not a lot I can add that hasn’t already been said.
  • I would like to emphasize that county roads are not built to any standard by design.
  • We do not design roads to go underwater. When they do go under, the road begins deteriorating. Yesterday, a truck when over a sinkhole that developed during a flooding event and the driver was injured.
  • Taxpayers pay for our road.
  • Chairman Pickett, you are right that the industry is already paying for these roads since they are taxed. But the taxes are not going to benefit them or the county.
  • I am forced to build and manage these roads with what little money I have.

 

Todd Staples, Texas Oil and Gas Association

  • Every Texan benefits from a robust oil and gas industry.
  • Looking at improving transportation corridors will lesson the impact and traffic on county roads.
  • A logistics hub will help reduce traffic on roadways.
  • Sufficient pipelines are the safest ways to move the product.
  • The rainy-day fund is funding almost exclusively with oil and gas revenue.
  • We’re excited about the future of Texas.

 

Ed Longanecker, Texas Independent Producers & Royalty Owners Association

  • Oil and gas revenues should be utilized to benefit production capabilities to the greatest extent possible.
  • We appreciate attention to this important issue.

 

Robert Ryan, Stallion Oil Services

  • I want to reiterate what my colleagues have said, and I believe the solution is in the budget.
  • We are facing a lawsuit in one of the counties down south who believes that we are responsible for the roads. We do not believe litigation is the best solution to the problem.

 

Permian Road Safety Coalition

  • One of the biggest safety risks to our industry is driving trucks from point A to point B.
  • We advocate for funding from TxDOT for Permian roads.
  • Oil and gas severance taxes were recently the source for the State Highway Fund.
  • Fatalities have lowered since 2015, but still too many have died.
  • Accelerate TxDOT’s spending capabilities. Current spending plans cannot meet the needs on the ground.
  • The state should make funding available at the county level via loans.

 

Questions to the panel:

  • Israel: TxDOT testified the South Orient is being used more often. Is there any way we can use our freight lines and be more thoughtful about our transportation? Is it possible to expand the rail network?
  • I think so.
  • Israel: We heard about the intersection of technology and transportation. Do the trucks being used now have the lane warning systems?
    • It is a mixture.
  • Thompson: Can we have a regional hub where everyone can work out of together?
    • Absolutely.
  • Darby: Maybe there is an opportunity for the state to incentivize these hubs.