Fix for Roads in Shale Counties Might Be Short

In South and West Texas, a surge in oil drilling has been both a boon to state coffers and a burden on local roads. As the legislative session entered its final days last month, some worried that lawmakers would take full advantage of the former while not doing much about the latter.

In the end, lawmakers found $225 million to repair county roads affected by energy development, and the same amount for state-owned roads. While the funding will help, it’s only a short-term fix.

“We appreciate what we got, but we feel over time it’s going to prove to be too little,” said DeWitt County Judge Daryl Fowler, who worked on the issue all session on behalf of several counties in the Eagle Ford Shale in South Texas. “We’ll run with it and try to come back next session and find a long-term solution.”

Officials with the so-called shale counties spent the session negotiating with the oil and gas lobby and lawmakers to find funding for rural roads, many of which have been decimated by thousands of heavy trucks traveling across them to access drilling operations. The road damage has contributed to a surge in traffic accidents and threatens to stall the region’s future energy production.

The Texas Department of Transportation asked lawmakers for $1.6 billion to address the issue — $400 million to fix existing infrastructure and $1.2 billion to reinforce existing roads. Proposals to find the money included tapping the state's savings account, known as the Rainy Day Fund, and billing energy companies directly for repair costs.

Lawmakers who represent the shale counties repeatedly reminded their colleagues that the drilling boom was the main reason for the state's budget surplus and the billions of dollars sitting in the Rainy Day Fund.

“We are determined to bring forth a solution to the unwelcome and very significant safety and structural issues that Texas' 21st century oil boom has brought to our great state,” state Sens. Glenn Hegar, R-Katy, and Carlos Uresti, D-San Antonio, wrote in a joint editorial in March.

As the session’s Memorial Day finale drew closer, the prospects of the counties receiving new money for local roads appeared dim. On May 22, the Senate considered House Bill 1025, a spending measure that included $450 million for TxDOT to address state roadways in areas affected by energy development. Uresti asked Senate Finance Chairman Tommy Williams, R-The Woodlands, whether counties would see any of that money for their roads.

“I have not been able to skin that cat,” Williams said. “It’s not been our state policy to rebuild county roads with state dollars.” He said he worried that carving out an exception for shale counties would create “a Pandora’s box of all 254 counties” soliciting the state for funds for local roads.

Budget leaders and lawmakers representing shale counties revived negotiations over the session’s final weekend. They struck a deal that included requiring TxDOT to dole out half of its $450 million to local counties as matching grants. To qualify for the grants, counties will have to establish County Energy Transportation Reinvestment Zones that would allow for property tax revenue to go toward the match.

The deal means more roads affected by the drilling boom will be repaired, particularly in the Eagle Ford Shale. But it was a one-time infusion and less than what advocates said was needed. Further complicating matters, a growing interest in shale exploration West Texas could mean more counties will face the same problem in the near future, driving up the overall cost of repairs.

It all points to lawmakers likely having to revisit the issue, Fowler said.

“Now you’re talking about 20 to 30 counties, but by the time this rolls around to the session two years from now, you could have double that,” Fowler said.

Deb Hastings, executive vice president of the Texas Oil and Gas Association, described the Legislature's moves on the issue as "a step in the right direction."  

"The dollar figure isn't for us to say but the effort and attention to this need was the right move," Hastings said.