road infrastructure to support oil development
TRANSCRIPT
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Road Infrastructure to Support Oil DevelopmentGene Griffin
Upper Great Plains Transportation InstituteNorth Dakota State University
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Points Covered
• Impact of oil development on roads• Additional factors• Long term implications• Political considerations• Potential solutions• Expected long-term investments
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Road Impacts
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Year well cost oil price IP stages
2010 725+ 15-28+
2009 $5,651,771 $60 654 10-20
2008 $5,413,471 $81 576 6-10
2007 $4,386,927 $54 326 2-6
2006 $4,089,715 $52 195 1-2
Will take 10,000 – 20,000 to fully develop the Bakken – Three Forks
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Road Impacts• An sample Bakken
horizontal well requires 2,024 truck trips during the drilling phase
Rig Related MovementsItem Number of Trucks Inbound/OutboundSand 80 InboundWater (Fresh) 400 InboundWater (Waste) 200 OutboundFrac Tanks 100 Inbound/OutboundRig Equipment 50 Inbound/OutboundDrilling Mud 50 InboundChemical 4 InboundCement 15 InboundPipe 10 InboundScoria/Gravel 80 InboundFuel trucks 7 InboundFrac/cement pumper trucks 15 InboundWorkover rigs 1 InboundTotal - One Direction 1012 Total Trucks 2024
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Impacts are LocalizedProduction by County (Barrels)
Billings
Bottineau
BowmanBurke
Divide
Dunn
Golden Vall
ey
Hettinge
r
McHen
ry
McKen
zie
McLean
Mercer
Mountrail
Renvil
leSlo
peSta
rkW
ard
Willi
ams
0
5000000
10000000
15000000
20000000
25000000
30000000
35000000
19992000200120022003200420052006200720082009
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Road Impacts
• The number of outbound trucks during the production phase depends on initial production rate and pipeline access
• In North Dakota, 96% of well locations are located more than ¼ mile from the state system, thus requiring the use of local road systems designed for low traffic volumes
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Existing Road Conditions
• Resurface vs. Reconstruction– Roadway Width – practice of thin-lift overlays
maintains surface condition but reduces roadway width
– Existing condition – Is resurfacing feasible?
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Improvement Responses to Impacts
• Gravel Roads– Increase blading frequency (low impact)– Increase gravel application frequency (medium impact)– Upgrade to a paved surface type (high impact)
• Paved Roads– Increased ESALs decrease pavement life– Structural Overlays– Reconstruction
• Insufficient roadway width • Existing condition poor
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Additional FactorsAgriculture
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Changing Agriculture
• Farm Size Increasing• Acres Increased by 2,000,000 Since 1997• More Tons/Acre• More Inputs (fertilizer, chemicals)• Larger Equipment• Larger Trucks (Semis)• Reduced Grain Elevator Numbers (Shuttles)
– From 1029 in 1950 to 402 today– Capacity increased from 60 million bu to 288 million b– From 10 miles to market in 1950 to 30 miles today
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North Dakota Decade Average Annual Crop Production (NASS)
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North Dakota Wheat versus Corn Bushels (NASS)
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Decade Average Annual Corn Production and Acres in North (NASS)
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Irrigated Acres
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Decade Annual Average Sugarbeet Production (NASS)
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Sugarbeet Production Tons and Planted Acres (NASS)
1960s 1970s 1980s 1990s 2000s0
1,000
2,000
3,000
4,000
5,000
6,000
0
50
100
150
200
250
300
Decade Average Production Tons
Decade Average Acres Planted
Prod
uctio
n To
nsTh
ousa
nds
Plan
ted
Acr
es
Thou
sand
s
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17.1 Billion Pounds
Source: National Agricultural Statistics Service
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62.3 Billion Pounds
3.6 Times More Weight
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3,000,000.0
4,000,000.0
5,000,000.0
6,000,000.0
7,000,000.0
8,000,000.0
9,000,000.0
0.0
500,000,000,000.0
1,000,000,000,000.0
1,500,000,000,000.0
2,000,000,000,000.0
2,500,000,000,000.0
3,000,000,000,000.0
3,500,000,000,000.0
Public Road Mileage - VMT - Lane Miles1920 – 2008 (FHWA)
Year
Pu
blic
Ro
ad M
ileag
e
Veh
icle
Mil
es o
f Tra
vel (
VM
T)
Public Road Mileage
Vehicle Miles of Travel
Lane Miles
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Long Term Implications
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Several Factors
• Future of the carbon based economy• Global growth of the middle class
– China, India, Brazil, and others• Drilling technology• Other sources of oil
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Current Activity
• On 11/2 there were 154 rigs operating in North Dakota
– (Source: ND Oil & Gas)
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Duration of Impacts
• ND Oil & Gas– Western North Dakota
• 1,450 to 2,940 wells/year• 10 to 20 years in duration
– 21,250 new wells– If estimate and technology hold, this represents 43 million
truck trips for the drilling alone
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Ray - Tioga Area
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Ray-Tioga Area
• 430 to 540 wells per year
• 3.5 million – 4.5 million gallons fracturing water per day May through December
• 11 to 14 years
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Williston Area
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Williston Area
• 70 to 90 wells per year
• 0.9 million – 1.1 million gallons fracturing water per year May through December
• 8 to 20 years
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Alexander Area
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Alexander Area
• 120 to 150 wells per year
• 1.4 million – 1.8 million gallons fracturing water per day May through December
• 12 to 15 years
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Watford City - Keene Area
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Watford City - Keene Area
• 250 to 310 wells per year
• 2.0 million – 2.6 million gallons fracturing water per day May through December
• 5 to 7 years
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Killdeer Area
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Killdeer Area
• 235 to 290 wells per year
• 1.0 million – 1.2 million gallons fracturing water per day May through December
• 6 to 8 years
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Parshall Area
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Parshall Area
• 375 to 470 wells per year
• 1.5 million – 2.0 million gallons fracturing water per day May through December
• 7 to 8 years
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Political ConsiderationsSmall p
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Federal Aid and Interstate Highway System
• Highway Trust Fund• Donor/Donee system
– Historically, North Dakota received about $2 for every $1 contributed to the Federal Highway Trust Fund
– Federal Aid makes up about 57% of NDDOT budget
• Long standing battle in Congress over this system
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New Jersey California Connecticut Airzona New York Kentucky Kansas Montana North Dakota
0
0.01
0.02
0.03
0.04
0.05
0.06
0.07
Lane Miles/CapitaFederal-Aid-Highway Lane Miles
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North Dakota Politics, small p
• Not dissimilar from Federal debate• East versus West• Agriculture versus Oil• Water issues• Flood issues
– Devils Lake– Red River
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National Issue
• The culture of free– Santa Claus– Easter Bunny– Tooth Fairy
• Honest discussion– What we want from government– What we’re willing to pay for
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Potential Solutions
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State Driven
• Not a Federal issue• Can’t be solved at the local level• State Legislature and Executive Branch has to resolve it
– Extraction taxes go to the state– Problem is larger than Western ND
• Western part most severe
– Solution needs to be part of a system plan– Legislature’s have the responsibility to look after the entire
state and solve equity issues– Will need to viewed within the context of other major issues
such as water supply and flood control
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ExpectedLong Term Investments
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Summary
• Impact of oil development on roads• Additional factors• Long term implications• Political considerations• Potential solutions• Expected long-term investments
– Beneficial to the local communities, ND and U.S.– Logically one would presume that ND will deal with
this effectively and efficiently
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UGPTI Oil Impact Study• Agencies involved: ND Department of Commerce, ND Association of
Oil & Gas Producing Counties• Objectives
– Estimate the incremental needs for county and local roads due to oil development activity in ND
– Develop GIS/Cube based traffic flow model– Model inbound and outbound rig related movements and outbound oil and
saltwater– Assign movements to specific routes – Estimate the incremental maintenance and improvement needs
• Final Report Release: December 3, 2010• Contact:
– Alan Dybing: [email protected] 701.231.5988– www.ugpti.org