Eagle Ford Road Maintenance to Require Millions in New Funding

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.

Truck Driving Accidents in South Texas - Fatigue

The Oil and Gas Industry has seen a tremendous increase in productivity over the last three years and a subsequent increase in trucking driving hiring and activity. Companies have hired thousands of new employees and have yet to slow down. Truck drivers are keeping highways busy from Laredo and Carrizo Springs all the way to San Antonio, Corpus Christi and Houston. Along with rapid production and workforce growth, there has been an increase in all types of accidents and work injuries, many fatigue-related.

Work Injuries and Accidents in South Texas are often Fatigue Related

As the oil and gas industry gains momentum, there are an increasing number of industrial trucks and 18 wheelers on the highways. Truck drivers suffering from sleep deprivation are a well-known danger on the road and a risk for an increased number of injuries and accidents. According to the Center for Disease Control and Prevention, insufficient sleep is a public health epidemic.

“Sleep is increasingly recognized as important to public health, with sleep insufficiency linked to motor vehicle crashes, industrial disasters, and medical and other occupational errors. Unintentionally falling asleep, nodding off while driving, and having difficulty performing daily tasks because of sleepiness all may contribute to these hazardous outcomes,” states a CDC article entitled Insufficient Sleep Is a Public Health Epidemic.

A National Highway Traffic Safety Administration report, Drowsy Driving and Automobile Crashes, states that “Sleepiness causes auto crashes because it impairs performance and can ultimately lead to the inability to resist falling asleep at the wheel. Critical aspects of driving impairment associated with sleepiness are reaction time, vigilance, attention, and information processing.”

Do Hours of Service Exemptions in the Oilfield lead to Accidents?

Amber Stanford an attorney at The Nations Law Firm states that “in recent times, there have been more than 300 oil and gas workers killed in highway related accidents, in large part due to the oil field industry exemptions from highway safety rules. "These exemptions allowed truck drivers to work extended hours, but it is being abused by some employers now pressuring their employees to drive after shifts that frequently extend beyond 20 hours.” The lawyer goes on to comment that “The most unfortunate part is that these accidents are only expected to increase over the upcoming years as more than 200,000 new oil and gas wells are expected to be drilled nationwide. This will include between 500 and 1,500 truck trips per well, far more than what is currently required due to new drilling techniques. Although the wells will create many new jobs and economic benefits, it is coming at a deadly cost.”

Just because drivers are on an oilfield site does not make them any less vulnerable to the effects of fatigue and potential accidents. Yes, exemptions from federal hours of service regulations exist for oilfield service workers, but that doesn’t mean they have to be taken, much less abused. Sure, it’s tempting to both drivers and employers to use the exemptions to increase productivity and profitability. However once the cost to driver health and safety is factored in, burning the candle at both ends looks less like a viable standard operating procedure.

Eagle Ford Shale Conference

Del Mar College along with Texas A&M, Port of Corpus Christi, Work Source Solutions, Eagle Ford Shale Consortium, and the Corpus Christi Chamber of Commerce have teamed up to address this and many other related issues. On September 27th & 28th at the Solomon Ortiz Convention Center in Corpus Christi, Texas, Del Mar College will host the Eagle Ford Shale Conference. The conference will concentrate on topics such as:

• Transportation and Logistics
• Trucking (safety, regulations, requirements, training)
• Railroad (capacity)
• Shipping (barge/ship activity)
• Pipeline (development, storage tanks, export oil)
• CDL Driver Demand
• Employment Opportunities
• Safety Awareness
• Community Growth and Opportunities

Visit the Eagle Ford Shale Conferences and Events page for more information.

Fatigue and the Oilfield

The Oil and Gas Industry has seen a tremendous increase in productivity over the last three years. Companies have hired thousands of new employees and have yet to slow down in the South Texas area. Along with the rapid production and workforce growth, there has been an increase in all types of accidents and fatalities, many fatigue-related.

Fatigue-Related Accidents in South Texas

As the oil and gas industry gains momentum, there are an increasing number of industrial trucks on the highways. Truck drivers suffering from sleep deprivation are a well-known danger on the road. According to the Center for Disease Control and Prevention, insufficient sleep is a public health epidemic.

“Sleep is increasingly recognized as important to public health, with sleep insufficiency linked to motor vehicle crashes, industrial disasters, and medical and other occupational errors. Unintentionally falling asleep, nodding off while driving, and having difficulty performing daily tasks because of sleepiness all may contribute to these hazardous outcomes,” states a CDC article entitled Insufficient Sleep Is a Public Health Epidemic.

A National Highway Traffic Safety Administration report, Drowsy Driving and Automobile Crashes, states that “Sleepiness causes auto crashes because it impairs performance and can ultimately lead to the inability to resist falling asleep at the wheel. Critical aspects of driving impairment associated with sleepiness are reaction time, vigilance, attention, and information processing.”

Hours of Service Exemptions

Amber Stanford of The Nations Law Firm states that “in recent times, there have been more than 300 oil and gas workers killed in highway related accidents, in large part due to the oil field industry exemptions from highway safety rules. "These exemptions allowed truck drivers to work extended hours, but it is being abused by some employers now pressuring their employees to drive after shifts that frequently extend beyond 20 hours,” and goes on to comment that “The most unfortunate part is that these accidents are only expected to increase over the upcoming years as more than 200,000 new oil and gas wells are expected to be drilled nationwide. This will include between 500 and 1500 truck trips per well, far more than what is currently required due to new drilling techniques. Although the wells will create many new jobs and economic benefits, it is coming at a deadly cost.”

Just because drivers are on an oilfield site does not make them any less vulnerable to the effects of fatigue. Yes, exemptions from federal hours of service regulations exist for oilfield service workers, but that doesn’t mean they have to be taken, much less abused. Sure, it’s tempting to both drivers and employers to use the exemptions to increase productivity and profitability. However once the cost to driver health and safety is factored in, burning the candle at both ends looks less like a viable standard operating procedure.

Eagle Ford Shale Conference

Del Mar College along with Texas A&M, Port of Corpus Christi, Work Source Solutions, Eagle Ford Shale Consortium, and the Corpus Christi Chamber of Commerce have teamed up to address this and many other related issues. On September 27th & 28th at the Solomon Ortiz Convention Center in Corpus Christi, Texas, Del Mar College will host the Eagle Ford Shale Conference. The conference will concentrate on topics such as:

• Transportation and Logistics
• Trucking (safety, regulations, requirements, training)
• Railroad (capacity)
• Shipping (barge/ship activity)
• Pipeline (development, storage tanks, export oil)
• CDL Driver Demand
• Employment Opportunities
• Safety Awareness
• Community Growth and Opportunities

Visit the Eagle Ford Shale Conferences and Events page for more information.

Eagle Ford's Location is Long-Term Strategic Advantage

After spending much of the week at Bentek's Benposium, it is clear the Eagle Ford's position in the Gulf Coast energy complex is a long-term advantage.

"The Eagle Ford is exciting because of its location to the Gulf Coast. With rich gas in close proximity to Mont Belvieu, the Eagle Ford's NGL net backs are among the highest in the country" - Kristen Holmquiest, NGL Analytics at Bentek

Energy Isn't New to Texas

The state of Texas leads oil & gas development in the U.S. Almost 44% of active onshore rigs are running in the state. The state has been an energy leader for decades......

For the Eagle Ford, that means the oil companies are close, infrastructure is close, and the chemical complex is very well developed. Midstream operators have announced $5 billion plus in expansions in the past six months. They will collectively add more than 3.2 Bcf/d in processing capacity in the region.

Even that is dwarfed by what oil & gas operators are spending, and both are setting the stage for what's to come. We're only one year into true development and the play is just starting to roll. The half a million barrels a day of liquids the play will produce by the end of the year is clearly on a path to double or triple in the subsequent five.

The play's location also means operators realize better prices. Oil produced in the Bakken Shale, due to constraints and transportation costs, can be priced at a discount from $10 to $20 per barrel less than WTI. Compare that to the Eagle Ford where we're currently seeing positive differentials to WTI, and you see why being close to the refineries is important. $10/bbl makes a big difference on the bottom line.

Risks to Eagle Ford Development

As with all oil & gas plays, the Eagle Ford isn't without risk. Its location offsets the major risks to some degree, but we've seen prices and economies change in the past. $100/bbl oil has driven development to current levels, but if prices dropped below $80/bbl, you'd begin to see a slow down.

As production grows, there could be growing pains. There is only so much capacity for the light crude in the Gulf Coast. If refiners don't act quickly, we could have periods where there simply isn't enough demand for Eagle Ford condensate.

Hot Shot Drivers Are In Demand in the Eagle Ford Shale

The Eagle Ford Shale has brought a lot of opportunities for the oil and gas industry. There is plenty of work for everyone - especially Hot Shot truck drivers. Hot Shot drivers in South Texas are called by oil and gas companies to pick up loads from the drilling rig and deliver them somewhere else, or to bring much needed supplies to the rig to keep drilling and fracking productive. If a tool breaks, the crew is forced to stop drilling or producing until another one is delivered. Time is money and a crew sitting around waiting for a tool is not productive, so Hot Shot drivers that are reliable are a crucial part of the business. Good drivers build great relationships with crews to ensure they get more loads to keep busy.

Hot Shot Drivers Have Unpredictable Schedules

Hot Shot drivers are a different breed. Unlike regular drivers whose runs and loads are scheduled days, weeks and even months at a time in advance, Hot Shot drivers must be ready to go in a moment’s notice. They have to be skilled and flexible, ready to haul thousands of pounds of pipe one day, a small one-pound express package the next. Runs can range from across town to halfway across the state of Texas.

Unfortunately, drilling crews can be very demanding. Drivers can be put in very awkward situations to take loads even if they are over their hours, and more driving would put them in violation of Federal Motor Carrier Safety Regulation (FMCSR) hours of service rules.

Don't Risk Your License

As a Hot Shot driver you can either be the hero or the goat to these drilling crews. If you refuse a load, they have to call someone else and if that person is more available than you, you may think that's the one who will get more calls. Turning down work in order to stay within hours of service limits may seem risky, but driving past your allowed hours in a 24 hour period is riskier. It’s foolish and unsafe. All drivers, even Hot Shotters, are responsible for their log books being up-to-date and that they comply with FMCSR regulations. Remember, if you’re running illegally it’s your driving record and reputation that is at stake. It may seem you are making more money but all it takes is one DOT audit with a couple of log book violations on your Compliance Safety Accountability (CSA) status to take that away.

Let your customers know you are a safe and competent driver who follows the rules. If you set that standard from the beginning they will respect you and recognize you as a real professional. And who do you think they’d rather work with to transport their expensive equipment, or to meet their critical deadline?