Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.
Road Infrastructure to Support Oil Development
Gene Griffin
Upper Great Plains Transportation Institute
North Dakota State...
Points Covered
• Impact of oil development on roads
• Additional factors
• Long term implications
• Political consideratio...
Road Impacts
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...
Road Impacts
• An sample Bakken
horizontal well
requires 2,024 truck
trips during the
drilling phase
Rig Related Movements...
Impacts are Localized
Production by County (Barrels)
0
5000
10000
15000
20000
25000
30000
35000
Thousands
1999
2000
2001
2...
Road Impacts
• The number of outbound trucks during the
production phase depends on initial
production rate and pipeline a...
Existing Road Conditions
• Resurface vs. Reconstruction
– Roadway Width – practice of thin-lift overlays
maintains surface...
Improvement Responses to Impacts
• Gravel Roads
– Increase blading frequency (low impact)
– Increase gravel application fr...
Additional Factors
Agriculture
Changing Agriculture
• Farm Size Increasing
• Acres Increased by 2,000,000 Since 1997
• More Tons/Acre
• More Inputs (fert...
North Dakota Decade Average
Annual Crop Production (NASS)
North Dakota Wheat versus Corn
Bushels (NASS)
13
Decade Average Annual Corn
Production and Acres in North (NASS)
14
Irrigated Acres
15
Decade Annual Average Sugarbeet
Production (NASS)
16
Sugarbeet Production Tons and
Planted Acres (NASS)
0
50
100
150
200
250
300
0
1,000
2,000
3,000
4,000
5,000
6,000
1960s 19...
17.1 Billion Pounds
Source: National Agricultural Statistics Service
18
62.3 Billion Pounds
3.6 Times More Weight
19
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
3.0
4.0
5.0
6.0
7.0
8.0
9.0
VehicleMilesofTravel(VMT)
Trillions
PublicRoadMileage
Millions...
Long Term Implications
Several Factors
• Future of the carbon based economy
• Global growth of the middle class
– China, India, Brazil, and other...
Current Activity
• On 11/2 there were
154 rigs operating in
North Dakota
– (Source: ND Oil & Gas)
23
24
25
Duration of Impacts
• ND Oil & Gas
– Western North Dakota
• 1,450 to 2,940 wells/year
• 10 to 20 years in duration
– 21,25...
Ray - Tioga Area
Ray-Tioga Area
• 430 to 540 wells per year
• 3.5 million – 4.5 million gallons fracturing
water per day May through Decemb...
Williston Area
Williston Area
• 70 to 90 wells per year
• 0.9 million – 1.1 million gallons fracturing
water per year May through Decembe...
Alexander Area
Alexander Area
• 120 to 150 wells per year
• 1.4 million – 1.8 million gallons fracturing
water per day May through Decemb...
Watford City - Keene Area
Watford City - Keene Area
• 250 to 310 wells per year
• 2.0 million – 2.6 million gallons fracturing
water per day May thr...
Killdeer Area
Killdeer Area
• 235 to 290 wells per year
• 1.0 million – 1.2 million gallons fracturing
water per day May through Decembe...
Parshall Area
Parshall Area
• 375 to 470 wells per year
• 1.5 million – 2.0 million gallons fracturing
water per day May through Decembe...
Political Considerations
Small p
Federal Aid and Interstate Highway System
• Highway Trust Fund
• Donor/Donee system
– Historically, North Dakota received ...
0
0.01
0.02
0.03
0.04
0.05
0.06
0.07
New Jersey California Connecticut Airzona New York Kentucky Kansas Montana North Dako...
North Dakota Politics, small p
• Not dissimilar from Federal debate
• East versus West
• Agriculture versus Oil
• Water is...
National Issue
• The culture of free
– Santa Claus
– Easter Bunny
– Tooth Fairy
• Honest discussion
– What we want from go...
Potential Solutions
State Driven
• Not a Federal issue
• Can’t be solved at the local level
• State Legislature and Executive Branch has to re...
Expected
Long Term Investments
Summary
• Impact of oil development on roads
• Additional factors
• Long term implications
• Political considerations
• Po...
UGPTI Oil Impact Study
• Agencies involved: ND Department of Commerce, ND Association
of Oil & Gas Producing Counties
• Ob...
Upcoming SlideShare
Loading in …5
×

Road Infrastructure to Support Oil Development

692 views

Published on

Published in: Business
  • Be the first to comment

  • Be the first to like this

Road Infrastructure to Support Oil Development

  1. 1. Road Infrastructure to Support Oil Development Gene Griffin Upper Great Plains Transportation Institute North Dakota State University
  2. 2. Points Covered • Impact of oil development on roads • Additional factors • Long term implications • Political considerations • Potential solutions • Expected long-term investments 2
  3. 3. Road Impacts
  4. 4. 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 4
  5. 5. Road Impacts • An sample Bakken horizontal well requires 2,024 truck trips during the drilling phase Rig Related Movements Item Number of Trucks Inbound/Outbound Sand 80 Inbound Water (Fresh) 400 Inbound Water (Waste) 200 Outbound Frac Tanks 100 Inbound/Outbound Rig Equipment 50 Inbound/Outbound Drilling Mud 50 Inbound Chemical 4 Inbound Cement 15 Inbound Pipe 10 Inbound Scoria/Gravel 80 Inbound Fuel trucks 7 Inbound Frac/cement pumper trucks 15 Inbound Workover rigs 1 Inbound Total - One Direction 1012 Total Trucks 2024 5
  6. 6. Impacts are Localized Production by County (Barrels) 0 5000 10000 15000 20000 25000 30000 35000 Thousands 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 6
  7. 7. 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 7
  8. 8. 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? 8
  9. 9. 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 9
  10. 10. Additional Factors Agriculture
  11. 11. 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 11
  12. 12. North Dakota Decade Average Annual Crop Production (NASS)
  13. 13. North Dakota Wheat versus Corn Bushels (NASS) 13
  14. 14. Decade Average Annual Corn Production and Acres in North (NASS) 14
  15. 15. Irrigated Acres 15
  16. 16. Decade Annual Average Sugarbeet Production (NASS) 16
  17. 17. Sugarbeet Production Tons and Planted Acres (NASS) 0 50 100 150 200 250 300 0 1,000 2,000 3,000 4,000 5,000 6,000 1960s 1970s 1980s 1990s 2000s PlantedAcres Thousands ProductionTons Thousands Decade Average Production Tons Decade Average Acres Planted 17
  18. 18. 17.1 Billion Pounds Source: National Agricultural Statistics Service 18
  19. 19. 62.3 Billion Pounds 3.6 Times More Weight 19
  20. 20. 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 3.0 4.0 5.0 6.0 7.0 8.0 9.0 VehicleMilesofTravel(VMT) Trillions PublicRoadMileage Millions Year Public Road Mileage - VMT - Lane Miles 1920 – 2008 (FHWA) Public Road Mileage Vehicle Miles of Travel Lane Miles 20
  21. 21. Long Term Implications
  22. 22. 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 22
  23. 23. Current Activity • On 11/2 there were 154 rigs operating in North Dakota – (Source: ND Oil & Gas) 23
  24. 24. 24
  25. 25. 25
  26. 26. 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 26
  27. 27. Ray - Tioga Area
  28. 28. 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 28
  29. 29. Williston Area
  30. 30. 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 30
  31. 31. Alexander Area
  32. 32. 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 32
  33. 33. Watford City - Keene Area
  34. 34. 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 34
  35. 35. Killdeer Area
  36. 36. 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 36
  37. 37. Parshall Area
  38. 38. 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 38
  39. 39. Political Considerations Small p
  40. 40. 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 40
  41. 41. 0 0.01 0.02 0.03 0.04 0.05 0.06 0.07 New Jersey California Connecticut Airzona New York Kentucky Kansas Montana North Dakota Lane Miles/Capita Federal-Aid-Highway Lane Miles 41
  42. 42. North Dakota Politics, small p • Not dissimilar from Federal debate • East versus West • Agriculture versus Oil • Water issues • Flood issues – Devils Lake – Red River 42
  43. 43. 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 43
  44. 44. Potential Solutions
  45. 45. 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 45
  46. 46. Expected Long Term Investments
  47. 47. 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 47
  48. 48. 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: alan.dybing@ndsu.edu 701.231.5988 – www.ugpti.org 48

×