A $225 million fund Texas lawmakers approved this year for counties impacted by the state’s oil and gas boom could end up being dispersed statewide, even in areas far away from any drilling. That's good news for those who didn't expect any funding, but other counties that have seen the bulk of road damage from energy exploration say they deserve more money.
Nearly every Texas county qualifies for at least some of the financial assistance under the funding formula included in Senate Bill 1747, according to estimates released last week by the Texas Department of Transportation. The formula prioritizes funding to counties that are seeing high levels of oil and gas production but also considers other factors, including whether counties take in drilling-related waste and whether they see more overweight trucks on their roads — even if those trucks are not involved in energy development.
"We’re not as impacted as other counties, but I will take whatever we can get because we are impacted in many other ways," said El Paso County Judge Veronica Escobar. The county could get around $100,000 in state funding, but is not near any oil and gas development in Texas. Counties must apply for the funding from TxDOT, and Escobar said she wasn't sure yet if her office would pursue it. But she said more money is badly needed in her county because of a transportation boom along the U.S.-Mexico border.
Officials in counties with heavy drilling activity worry that the money is being dispersed too broadly.
“We’re pleased that we have received as much as we have,” said Daryl Fowler, county judge for DeWitt County, one of the top oil and gas producers in the booming Eagle Ford Shale in South Texas. But, Fowler added, the $4.5 million his county is expected to be eligible to receive “does not go anywhere near solving the infrastructure problems for DeWitt County that have been created by the oil and gas traffic.”
While the increased oil and gas production, especially in West and South Texas, has led to the state collecting billions of dollars more in taxes from energy companies, county governments have not seen parallel increases for their coffers. The increased traffic has impacted both roads maintained by the Texas Department of Transportation and those that are the responsibility of the individual counties.
During the legislative session, lawmakers allocated $450 million to the problem, split evenly between state and county roads. The funding formula drew complaints, including from counties upset that the bill gave preference to areas with oil and gas production, rather than waste disposal.
The bill’s author, State Sen. Carlos Uresti, D-San Antonio, said he worked throughout the session to get funding for all the counties that are seeing their roads torn up by activities related to energy production.
“There are so many different stakeholders at the table that wanted input,” Uresti said. “It’s not as simple as us saying we're going to give one particular county a greater preference." He added that some counties were opposed to the legislation altogether. He also said there were some stakeholders involved in the negotiations that didn’t want the bill to allocate any money for counties such as Frio County, which are taking in more waste from energy production than they are producing oil and gas.
“I had to make the argument that they don't have production but they're suffering the consequences of the production,” Uresti said. “It was very difficult to get buy-in from 100 percent of stakeholders to give that any weight.”
DeWitt County produces far more oil and gas than it takes in waste, but other counties are not so lucky. Frio County, which TxDOT estimates could get just over $1 million in assistance, considers itself to be in the opposite category. It paid just $23 million in severance taxes to the state for oil and gas production in the 2013 fiscal year — less than a tenth of what DeWitt paid — but takes in more than twice the amount of waste.
Frio County Judge Carlos Garcia said more than a dozen disposal wells operate within his South Texas county's borders, and that number will double next year, with more newly approved wells not yet active. Damage to roads from truck traffic has been staggering, he said, and the county isn’t prepared to respond to emergencies that might arise.
“In case something happens, what is Frio County going to do?” he asked. “Are we just going to be left alone?” He argues that the oil and gas industry should contribute to a fund for county road repairs and emergencies. Most industry taxes go to state coffers instead of counties.
Nearby Guadalupe County is one of the top areas for taking in waste from oil and gas production, receiving close to 400 million barrels in the last fiscal year but only logging about $5 million in severance taxes from production. Still, County Judge Larry Jones said he was pleasantly surprised that TxDOT estimates at least $1.5 million could go to Guadalupe County, a much higher number than he had anticipated.
“I get complaints from my constituents all the time about these trucks that they didn’t used to see,” Jones said. The county sheriff’s office now works with the state Department of Public Safety to increase police presence on the truck routes throughout the county, to monitor the extra trucks on the road.
The formula’s use of weight tolerance permits — to account for the number of overweight trucks on the road — helped boost the funding allocation for many counties, like El Paso County, that do not produce any oil and gas or take in any related waste.
“We’ve got to find a way, probably in the next Legislature, to tweak the formula a little bit,” said Fowler, of DeWitt County. He said lawmakers need to “make it more applicable to the ones that are really suffering through this.”
Applications for the funds are due in February.