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Rise in Texas energy activity brings more road repairs

By Sarah Thomas
July 5, 2012 at 11 p.m.

Some East Texas counties are faring better than those in other parts of the state, where oil and natural gas production trucks are tearing up roads and leaving taxpayers on the hook for the damage.

Though increased energy production in recent years has created thousands of jobs and kept the Texas economy chugging along, the industry has left behind an estimated $2 billion in needed repairs to local and farm-to-market roads across the state, a Texas Department of Transportation executive said this week.

In at least a couple of East Texas counties, maintenance costs have steadily increased in recent years, TxDOT said.

In Panola and Harrison counties, both of which are atop the natural gas-rich Haynesville Shale formation, the cost of maintaining eight roads heavily used by the industry increased more than 20 percent in the past five years.

In 2007, TxDOT spent $1.6 million to repair the roads, said spokesman Marcus Sandifer. That increased to $2 million in 2011, the most recent year for which data is available.

Deb Hastings, executive vice president of the Texas Oil and Gas Association, said her industry group's members want to pay their share, but question how tax revenues are distributed.

" 'Who should pay for it?' That's the kind of questions we in the industry are asking ourselves," Hastings told the Fort Worth Star-Telegram. "We do pay billions in taxes already. How that's funneled to local governments, that's the question."

Rusk County, which also has seen Haynesville activity, has long required a road-use agreement with heavy equipment operators that aims to protect taxpayers from the financial burden of road repairs. The county says it has collected more than $1 million in road damages in the past 21 years.

Patty Sullivan, an administrative assistant to the Rusk County Commissioners Court, said the program's success has led other counties to inquire about copying it.

"Our system has been tried and proven to work," she said. "It all comes down to a good neighbor policy. (The companies) have to trust us to honestly assess the damages - not pad the bill in any way."

Under the agreements, each company is assigned a specific route so damage can be assessed and billed to the company that caused it. Any money recovered from the companies goes back to the precinct where the damage occurred, Sullivan said, and county officials make repairs.

Sometimes patchwork repair is needed before final repairs can be done because the company hasn't finished at a given site and the county doesn't want to spend money fixing a road that will be damaged again.

"Your main objective is to make sure your general public can safely travel the road," she said. "You can't have them out there dodging potholes."

In 2010, Rusk County had about $100,000 in damages, she said. Since then, drilling activity in the area has declined with the boom in the Eagle Ford Shale formation in South Texas. So far this year, Rusk County has received about $10,000 through the program.

Johnson County, south of Fort Worth, sits atop part of the Barnett Shale formation. In busier times, said Johnson County Judge Roger Harmon, larger companies such as Chesapeake Energy and Devon Energy voluntarily paid for repairs if officials could show them before-and-after assessments.

But the smaller subcontractors more prevalent since activity moved south are typically stingier, said Rick Bailey, a county precinct commissioner.

"There was a time when they were eager to throw you a bone," Bailey told the Star-Telegram. "But when it's over, it's over."

DeWitt County, in the middle of the Eagle Ford Shale, may need as much as $342 million to fix or replace nearly 400 miles of roads. The county expects to take in $7.2 million in property taxes for the fiscal year.

"Rural counties do not have limitless income potential just because the tax base is exploding," said DeWitt County Judge Daryl Fowler.

Fowler released a lengthy engineering report before a meeting Monday of a task force, comprised of government and industry officials, which is expected to make recommendations on the issue this fall for the Texas Legislature.

Gregg County has suffered minimal impact from heavy drilling equipment, said county Judge Bill Stoudt. Most Gregg County drilling is done inside the city of Longview, he said, and what is done outside the city limits is served by state roads.

Upshur County Judge Dean Fowler said the damage in his county also has been minimal.

"In some instances, (the Upshur County road engineer) has entered into haul agreements indicating which roads oil companies should use and which roads they shouldn't use," Fowler said. "But as of yet, the commissioners court hasn't taken any action to try to recover any damages from the oil companies."

<em>- This report includes information from News-Journal wire services.</em>



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