American Oil and Gas Reporter - December 2017 - 84

ConventionCoverage: Permian Basin Petroleum Association
surprise to anyone. Obviously, you cannot
prepare for a 50-inch rain, but there will
be another 50-inch rain with three droughts
in between."

Pausing after PBPA's infrastructure panel discussion are, from left, James Beauchamp
of the Midland-Odessa Transportation Alliance, Jeremy Goebel with Plains All-American
Pipeline, Jarl Pedersen of the Port of Corpus Christi and moderator Jacki Pick from the
Jacki Pick Show.

bers to attend the interim committee
meeting in Midland scheduled for Dec.
12. "We want to hear from you" about
industry concerns, he urged. "Those include the frac sand issue and some of the
challenges that are absolutely critical to
the production of oil and gas, including
transportation, water and environmental
issues."
Seliger praised PBPA as a mediator
and investigator for its involvement into
the implications for environmental issues
and endangered species. He also pointed
to the efficacy of voluntary industry measures in water sourcing and use. "If (sand
mining) is not done very carefully, it
invites regulation, which generally means
overregulation. We should shy away from
that," he held. "One perfectly viable example of that approach is how the oil
and gas industry is doing some tremendously innovative things to use produced
water in completions, and is doing so
with absolutely no legislative or regulatory
requirements. It is doing this very carefully
and thoughtfully. I think the sand mining
issue needs to follow the same path."
Senate Agriculture, Water and Rural
Affairs Committee Chairman Charles
Perry, R-Lubbock, emphasized that the
conditions were right for action. "We
have a friend in the Department of Interior-regarding the lizard and other critters-and in Comptroller Susan Combs,"
he assessed. "Carpe Diem. The next department may not be as friendly to the
industry."
84 THE AMERICAN OIL & GAS REPORTER

Floods, Droughts And Funds
According to Perry, Texas' rapid population growth made water issues paramount. With regard to brackish water use
and recycling, he suggested, "It is pretty
clear that landowners' have the right to
access and use it if they choose to. If you
want the water, pay for it."
As for the state's long-term trajectory,
he said vital water infrastructure projects
were being pushed to the margins by
other social spending, specifically Medicaid. "It is a budget issue," he maintained.
"During the next two or three sessions,
Texas will have to take a hard look at
how we spend and prioritize taxpayer
dollars."
Some of Hurricane Harvey's devastation resulted from Texas' lack of water
projects, Perry pointed out, as was the
fact that so little of the floodwater could
be diverted for future use. He indicated
proper investment already would have
built projects such as levees to channel
rainwater into aquifers or other resources
that allowed for future withdrawal.
"A state or federal government should
never face the decision whether to flood
one community to save another," he reflected. "Thirty-two trillion gallons of
freshwater destroyed communities and
our ecology systems. Had we put probably
$5 billion during the past 10 years into
developing a diversion system, we would
have been able to store much of that for
future recovery and move it to other dispersion points. This (hurricane) was no

Skewed Funding
Water projects were not the only prominent infrastructure topic at PBPA's convention. Landgraf also mentioned Permian
Basin highways, citing the example of
State Highway 302.
"Not only is that a tremendous corridor
for oil and gas activity, that also is where
most of the sand mining operations are
located, with hundreds of trucks carrying
multiton loads," he reported. "This differs
from conventional oil field traffic, because
they are going from the same mining site
to the same railhead or the same production
site. Unlike oil field traffic, which tends
to spread around, we are talking about
heavy trucks on the same roads back and
forth every day for many days at a time.
That repetition is going to have an even
more negative impact on transportation
infrastructure."
During PBPA's Texas Infrastructure
Panel, James Beauchamp, president of
the Midland-Odessa Transportation Alliance, warned that the metrics the Texas
Department of Transportation used to
measure freight traffic severely underestimated the heavy traffic on Permian
Basin highways.
"TxDOT does not even dispute that,"
he related. "But it is important to fix this,
because daily truck miles are a primary
factor in the funding formulae through
which we get our (highway) money."
One problem with the methodology,
he said, was that it tended to miss regionally generated freight deliveries. He
cited the example of Andrews County,
Tx., for which he said TxDOT estimated
53.1 million miles a year in truck traffic.
However, he said, his organization estimated water disposal traffic pushed that
number to at least 279.5 million miles
annually.
Pipelines And Ports
During his infrastructure panel remarks,
Jeremy Goebel, senior vice president of
acquisitions and strategic planning for
Plains All-American Pipeline, shared
some projections of Permian Basin production and its implications for pipeline
capacity. "It is all going to depend on
prices," he considered. "At $60 a barrel,
you would see some very big numbers."
However, he suggested, the Permian

American Oil and Gas Reporter - December 2017

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