Writing in the Midland Reporter-Telegram, CEA friend, Jim Nelson of Warren CAT calls attention to the importance of roads and transportation funding to the Texas economy.
Texas is a blessed state. We are blessed with a remarkable history, natural wonders, great people, a privileged economy and abundant natural resources.
These resources have allowed us to lead the economic recovery and help buoy the national economy. Because of our energy industry and the prosperity it creates, Americans of all stripes have reaped the benefits of our state’s blessings.
Now Texans must embrace the work of keeping those resources flowing. Recent analysis by IHS shows that domestic energy production has helped put $1,200 per year into America’s pocketbooks through reduced energy costs. By 2020 that number is expected to be $2,700 per year. Other studies have shown that increased natural gas production in Texas and other gas fields have helped reduce household utility bills by as much as $32 billion in 2012. None of this would have happened if it weren’t for a key piece of oilfield equipment: ROADS.
Roads are the circulatory system of the Texas economy. Our oil and gas flows not just through pipes, but over our roads and highways, too. Our record-breaking energy production has had a significant impact on our road infrastructure. Couple heavy oil field traffic with years of reduced transportation funding and Texas roads are showing their wear. Due to increased oilfield traffic, many county and state roads are on a reduced maintenance schedule. Roads that would normally be repaved every three years are now only being patched due to demands on the system.
Many of the roads now being used in Texas oilfields were built in the ’50s, long before today’s heavy, long trucks, which make several trips a day to drilling sites. The Texas Department of Transportation (TxDOT) says that when as many as 1,100 truck trips are needed to begin production on a well, they need up to $4 billion per year to fix and maintain Texas roads.
The problem is so acute, TxDOT announced last month that they planned on converting up to 83 miles of paved roads to gravel due to lack of maintenance funding. We believe this is a step in the wrong direction. Serious questions about the plan’s lack of community input were raised by officials and residents in the affected areas and many transportation professionals believe the plan could create more maintenance costs than it proposes to cut.
At first glance, $4 billion for road maintenance is a big number. But not when it’s compared to the economic value created by the energy industry as a whole. The University of Texas at San Antonio’s Institute for Economic Development says that the fiscal benefits of the Eagle Ford boom created 116,000 jobs and $16 billion in economic impact last year. Those numbers are impressive in their own right, but when coupled with production in the Permian Basin, Barnett Shale and Granite Wash, they show Texas is swimming in energy dollars. In fact, earlier this year Texas State Comptroller Susan Combs announced that state receipts from oil and gas severance taxes exceeded projections for the first nine months of Fiscal Year 2013 by a whopping $900 million!
This gush of revenue is what has allowed the Texas Legislature to pass two key measures in support of road funding this session. One creates a mechanism that diverts up to $1.2 billion from the rainy day fund for highway construction and maintenance. The other creates the The State Water Implementation Revenue Fund of Texas (SWIRFT) that will contain $3.5 billion for road, port and rail infrastructure projects.
Both measures must go before the voters in November of next year and Consumer Energy Alliance believes all Texans should vote for them. The two proposals are a positive first step in tackling the problem of degraded and damaged oil field roads. Only by truly investing in our great state’s infrastructure will we keep the circulatory system of the Texas economy healthy enough to keep our lifeblood flowing well into the future.