Eagle Ford Road Maintenance to Require Millions in New Funding

More than $20 million per year needed in DeWitt County, but that number will likely fall

Road maintenance in South Texas is in the news almost daily and a recent study details the needs in DeWitt County. The study estimates the county needs $432 million to construct and maintain heavily trafficked oilfield roads over the next 20 years. That’s $350 million more than the county would have allocated before the discovery of the Eagle Ford Shale and millions more than the $112,000 the county received from the state last year.

Is $432 Million a Realistic Estimate for Road Repairs?

While the need shouldn’t be a huge surprise, it is likely a high estimate. High in regards to the basic assumptions and multiples higher than local or state officials have planned for.

The study is based on 65-acre spacing across the entire development area and uses an expected number of truck trips for each well. While there will undoubtedly be lots of trucks moving through the area, there will not be the same number of truck trips for every well. As companies begin infill development drilling, there will be multiple wells drilled from single locations. That means fewer trucks and less road damage.

Drilling two wells per pad will drive down traffic significantly. Not quite 50%, but it would be close. The rig move is eliminated completly on multi-well pads and development in other shales indicates that more than two wells/pad will be normal.

Even if needs end up being half of that estimated by the study, road repair costs will be three times prior expectations and millions more than what is allocated from the state.

Eagle Ford Road Maintenance Needs in DeWitt County

Here are the highlights from the study:

  • The county maintains 342 miles of roads in the Eagle Ford development area
  • Expects almost 3,700 equivalent single axle load (ESAL) trips over the life of a well
  • 45 miles of road maintenance per year at 80,000 per mile ($3.6 million/year or $72 million total)
  • 187 miles of road reconstruction at $920,000 per mile ($172 million)
  • 99 miles of major reconstruction at $1.9 million per mile ($188 million)
  • If we attribute ALL of the costs to the oilfield and no other purposes, it equates to $133,000 per well in the development area.

Consider the potential of drilling 3-5 wells from a single pad site and the per well road maintenance costs could fall below $50,000 (60% less). Consider the same number of wells to be drilled and total costs could easily fall as low as $200 million dollars over the next 20 years.

Get the full DeWitt County Road Damage Cost Allocation Study HERE

Share your thoughts and comments below.

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R.T. Dukes

R.T. Dukes

Managing Editor at EagleFordShale.com
R.T. is the managing editor of EagleFordShale.com. In prior roles, he advised major oil companies on strategy, the macro business environment, and opportunity screening. 2503 Robinhood, Houston, TX, 77005, U.S.A. | Telephone: 832.429.4790


  1. We have been working in a spirit of cooperation for mutual benefit with the oil companies doing business here. Most of the RRC permits are attributable to five or six companies. Not all business models alike, so there is opposition to entering into a voluntary contract for damages based upon a well bore by some. The two agreements we have in place are with (in order of execution) Petrohawk/BHP Billiton and Pioneer Natural Resources. At $8,000 per well bore, which was a number pulled out of a hat in 2010, we have collectively received $1.8 million to maintain our roads and buy additional equipment. Counties do not have the authority to force a road use agreement on anyone, so we hope for good stewardship and good corporate citizenship good public relations to prevail.

    As far as a course of action, I would say the stakeholders must initiate it and carry plausible solutions to the Legislature for consideration. The recently-formed TXDOT Energy Sector Task Force has met for the third time and sub-committee assignments are being made. Within the next month, the subcommitteess will meet and begin working on solutions to funding state and county road system needs in the energy producing counties around the state. [Wind Energy development is also taking a toll on roads.]

    Judge Roger Harmon from Johnson County, Judge Jim Huff from Live Oak County, Judge Joe Luna from Zavala County will join me on this task force.

    In addition to our work on the task force, we may propose legislation to be advanced through our state association, and/or through consultants. Several issues need debate, but the one that should get the most attention in my mind is the Severance Tax allocation. Twenty-five percent is credited to the Permanent School Fund and seventy-five percent to the General Fund subcategory: Economic Stabilization Fund, which is the so-called rainy day fund. Allocating a percentage to the counties and TXDOT districts where the production (and damages) occurred seems to be a simple solution and a worthwhile change in the law – but, I must admit, I always drink bottled water when I go to Austin.

    The Property Tax Code needs amending as well, because the mineral values added to the tax roll cause a precipitous decline in the tax rate which limits the ability to recover damages with the tax levy.

    Our citizen involvement will open the eyes and ears of our representatives and senators, but there will be headwinds in Austin. A systemic deficit coupled with urban needs will compete for the dollars we need.

  2. As the county judge, I want to mention the study was commissioned to give us a quantitative view of what the needs are so that we could begin to prioritize where to spend our limited funds. The fee suggested has no hope of being implemented without the cooperation of the oil and gas associations or future legislation mandating a fee of any amount.

    Our property tax revenue is barely over $7.24 million and is limited by the fact that the mineral values added to the tax roll from the exploration are driving our nominal tax rate down to (perhaps) unsustainable rates. If we attempt to hold the nominal rate above a point which increases our tax levy by more than 8 percent year-over-year, then local taxpayers can force a rollback election, and if successful, force us to a adopt a budget under the 8 percent limit.

    The reality is that an 8 percent increase in tax levy would amount to an additional $480,000 (estimated and adjusted to remove debt service from the $7.24 million total). For perspective, we just “fixed” 3.5 miles of gravel road at a cost of $250,000 which included material, manpower and equipment. A $190,000 donation of materials made this possible.

    There is a need for the State of Texas to recognize it is enjoying a free lunch by collecting more than $57.5 million in Severance Tax from production occurring in our county for the PSF and the so-called rainy day fund; and appropriating $112,000 of Overweight Axle Fees and gasoline tax collections as revenue for our county in the same fiscal year period ended September 30, 2011.

    It is high time to do something about the inequity.

    • R.T. Dukes RT Dukes says:

      Mr. Fowler,

      That is great context for the article. The modern oil boom in our state is going to force the state to re-evaluate the way it appropriates funds. It sounds like $112,000 won’t repair two miles of road and it’s obvious two miles of repairs per year is not a viable option for the county.

      What is the best course of action for the industry and local citizen to ensure this issue is addressed at the state level?

      Are many companies participating in the voluntary road maintenance fee ($8,000 per well)?

      Your input is appreciated,

      R.T. Dukes

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