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Talking Freight - The Transportation Needs and Impacts of Fracking-Based Energy Extraction

September 18, 2013

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Jennifer Symoun
Good afternoon or good morning to those of you on the West and welcome to the Talking Freight Seminar Series. My name is Jennifer Symoun and I will be moderating today's seminar. Today's topic is the Transportation Based Needs and Impacts of Fracking-Based Energy Extraction.

Before I go any further, I do want to let those of you who are calling into the teleconference for the audio know that you need to mute your computer speakers or else you will be hearing your audio over the computer as well.

Today we'll have three presenters, Dr. Cesar Quiroga of the Texas A&M Transportation Institute; Mark Murawski of the Lycoming County (Pennsylvania) Planning Commission; and Coral Torres of the FHWA Office of Freight Management and Operations.

Mark Murawski has been the Transportation Planner for Lycoming County for the past 27 years. Mark administers the Williamsport Area Metropolitan Planning Organization transportation planning program. As part of Mark's duties, he is responsible for preparation and update of the Williamsport MPO Long Range Transportation Plan, Transportation Improvement Program and has conducted numerous special studies on a wide variety of transportation issues. Mark currently serves on 17 transportation committees at the state, regional and local levels, including Chairman of the Williamsport Municipal Airport Authority, Vice-Chairman of the Pennsylvania Aviation Advisory Committee and a member of the Lycoming County Natural Gas Exploration Task Force.

Cesar Quiroga is a Senior Research Engineer at the Texas A&M Transportation Institute (TTI). He is involved in a wide range of transportation research and technology transfer and implementation initiatives. Examples of focus areas include project development process optimization, utility relocation and permitting, and impact of energy developments on transportation systems. In particular, he has followed energy developments in Texas, including the Barnett Shale region and, more recently, the Eagle Ford Shale region.

Coral Torres is a Transportation Specialist with the FHWA Freight Management Office and manages several programs and projects such as the Peer to Peer Exchange program, the Off-Hour Delivery Study and the National Freight Network designation. Coral started her career working as highway designer and construction inspector for local and state agencies in Puerto Rico. She later became a Research and Teaching Assistant at the University of Puerto Rico and Rensselaer Polytechnic Institute where she worked on several key projects such as the Off-Peak Freight Deliveries to New York City project and Sustainable Freight Logistics: Oakland, CA Case Study. She later became one of the co-founders of the sustainable logistics company Green Guidance. Her career with the federal government started as a PDP Highway Engineer at the FHWA GA Division Office. Ms. Torres also served as the Highway Performance Monitoring System, Size and Weight Program Manager and temporary Every Day Counts coordinator in the State of Pennsylvania where she assisted in the development of the State Transportation Innovation Council which FHWA has instituted as exemplary for other states.

Today's seminar will last 90 minutes, with 60 minutes allocated for the speakers, and the final 30 minutes for audience Question and Answer. If during the presentations you think of a question, you can type it into the chat area on the right side of your screen. Please make sure you send your question to "Everyone" and indicate which presenter your question is for. Presenters will not be able to answer your questions during their presentations, but I will start off the Q & A session with the questions typed into the chat.

The PowerPoint presentations used during the seminar are available for download from the file download box in the lower right corner of your screen. The presentations will also be available online within the next few weeks, along with a recording and a transcript and I'll notify all attendees once these materials are posted online.

One final note: Talking Freight seminars are eligible for 1.5 certification maintenance credits for AICP members. In order to obtain credit for today's seminar, you must have logged in with your first and last name or if you are attending with a group of people, please have your name typed into the chat box. I have included more detailed instructions in the file share box on how to obtain your credits. Today's webinar is not yet available on the AICP web site, but I will send out a notice once it is. For those of you who are not AICP members, but would like to receive PDH credits for this webinar, please note that FHWA does not formally offer PDHs; however, it may be possible to receive PDHs for your participation in Talking Freight if you are able to self-certify. To possibly receive PDHs, please download the agenda from the file download box and submit this agenda to your respective licensing agency. Finally, I encourage everyone to please also download the evaluation form from the file share box and submit this form to me after you have filled it out. We'll now go ahead and get started with our first presenter, Dr. Cesar Quiroga of the Texas A&M Transportation Institute.

Dr. Cesar Quiroga
Thank you Jennifer I really appreciate it and welcome everybody to this webinar. As you can see the title of my presentation is Fracking-based Energy Development and Transportation Impacts and Needs and what I would like to do this afternoon is to first of all provide an answer to the question what is hydraulic fracturing or fracking. I will then talk about transportation impact and end my presentation with a discussion on current initiatives.

Let's try to define what is hydraulic fracturing. At a high-level hydraulic fracturing or fracking is really about fracturing rocks using high pressure. It usually involves using water mixed with sand and chemicals.

Fracturing process in combination with chemicals results in small fractures of the rock that enable gas, petroleum, and water to migrate to the well.

While fracking has been in the news the last few years the reality is that it is a combination of technologies, some of which have been around for quite a long time. Hydraulic fracturing for example has been around since the 1940s.

I should also mention that there have been several initiatives over the years including the Department of Energy Eastern Gas Shales Project or EGSP which was really about a set of demonstration projects that involved cost-sharing with industry.

That was one of the enabling technologies: hydraulic fracturing. The second enabling technology was horizontal drilling. Horizontal drilling was rarely used until the late 1980s when it began to be used in the Austin Chalk Formation in Texas. For those of you who are familiar with the Barnett Shale in Texas, the first time it was used there was in 1991. The third enabling technology is what is called slick water fracturing which is really about using chemicals in combination with water to increase the fluid flow.

This slick water technology was introduced in the 1996-1997 time frame and begun to be used to develop shale gas and shale formations at that point, primarily in combination with the Barnett Shale.

So really when we talk about fracking we're talking about several technologies: hydraulic fracturing, horizontal drilling, slick water fracturing, and a combination of these technologies have made the extraction of shale gas efficient and therefore useful.

Just to give an idea of what this looks like, this figure is from the Department of Energy website you can see that there is typically a vertical well that is reconfigured or changes course or direction. While the typical depth is between 5,000 and 10,000 feet you have to keep in mind that shale formations are usually only 200- 400 feet thick, but the horizontal lateral can be anywhere from 5000 to 6000 feet or even more. This is important to keep in mind when I talk about the use of the water for hydraulic fracturing because it is really the length of the horizontal well that makes the difference for what is needed for fracking.

Let me provide some perspective. In 2012 there were one million fracking jobs in the US. According to EIA estimates, crude oil will probably stay within the 6,000,000 to 10,000,000 barrels a day for the next 30 years but natural gas is quite likely to increase anywhere from the lower 20 to upwards of 30 trillion cubic feet per year depending on production.

The EIA is of course updating these estimates every year and they should give you an idea of what the Eagle Ford Shale formation is in Texas. This is a formation for which the discovery well was developed back in 2007-2008, it had 250 barrels a day, and by 2012, it had grown to 87,000 barrels a day this year, as of May it had grown to 564,000 barrels a day. So clearly this is a growth industry.

So that in terms of the first part, we're attempting to provide an answer to the question what is fracturing and fracking. Just to wrap it up remember that fracturing is a technology that is been around for decades in combination of horizontal drilling and the use of chemicals. It is really the combination of these technologies that has resulted in the massive use of what we now call shale fracking.

Now let me switch gears and talk about transportation impacts. To put things in perspective let me use the example of a gas well from the Barnett Shale in North Texas. It really requires a lot of truckloads. For example in this particular situation, there were almost 200 truckloads for pad site preparation, rig mobilization, drilling operations and the removal of the rig. Then you need close to one thousand trucks for fracking which corresponds to an assumption of almost four million gallons or 88,000 barrels of water for fracking and also salt water disposal. But that is not the end of the story because then you need a significant amount of truckloads every year for maintenance and you may need to do re-fracking.

The number of truckloads is really a function of a number of factors including well type, geology, and drilling technology and the water needed for fracking can vary substantially. In the literature, you may find anywhere from two to six million gallons of water. Keep in mind what really made the difference is the use of horizontal drills, horizontal wells. So for example in the Marcellus shale, I found a reference that there was a vertical well doing hydraulic fracturing, that you may need anywhere from 20,000 to 80,000 gallons for the Fracking operation whereas with if you were doing horizontal well fracking you may need 2 to 9 million gallons of water.

So now that we have an understanding of all of the truckloads you now the question is what the impact is. The impacts can be quite significant. We can look at these impacts from a variety of points of view and I'm just going to touch base on these: pavement impacts, roadside impacts, and operation and safety impact. Let me start with the pavement impact. We have and many of you may have seen pictures everywhere related to damage of the roadway so I'm just going to show you a couple of slides documenting the surface and this one was on Interstate 35 south of Dallas, south of Fort Worth, sorry.

This one is west of Fort Worth. I have a number of other pictures from West Texas, South Texas, and county roads. The question is how do we quantify that? Let me show you an example and the results of an analysis completed a couple of years ago in which we used GPR on a number of segments throughout West Texas or North Texas in the Barnett Shale.

Ignoring for a second there are two computer models here-it's just an indication that when we looked at the numbers that we look at fifty to sixty percent of the selected segments which were expected to have less than five years of remaining life. So that's quite significant. One of the things that we did then was to try to estimate the pavement life. We developed a couple of tools to be able to do this. For those of you familiar with the energy development industry you need to dispose of the saltwater using disposal facilities, typically injection wells.

Many of these injection wells are permitted by the number of the maximum barrels they can receive per day. If you look at any number, for example 20,000, you can translate that into the number of truckloads you receive per day or per year and if you are familiar with the design of the different types of facilities can be designed for different types of ESALs. If you assume a rural road and assuming that it is new, at this rate 20,000 barrels a day in the facility may not have more than four years of life assuming that it was new when the process started.

One other thing that we did as an example was the estimate of impact statewide. We produced a high level estimate for the state of about $1 billion per year on state roads. Taking into consideration that local and county roads account for a roughly the same amount of mileage, we came up with an estimate of about $2 billion a year which is quite significant.

There were some assumptions that we had to make regarding the buffer around which we had some impact within the facilities-we didn't include U.S. highways-- So if anything the impact would be higher than the number I just mentioned. Another important part to keep in mind is that you may have overweight loads.

Just to give you an idea how important the overweight factor is if you look at 80,000 pounds is the reference and if you look to increase the overload to 100,000 pounds, an increase in weight is only twenty percent, but the increase in the impact is 240% which is quite significant, and that is something we should not forget.

Let me switch gears quickly to other impacts. Let me talk for a second about roadside impact and there are many. We have issues related to right-of-way and permitting. Or related to the crossings, longitudinal installations, gathering lines, temporary lines, and easement issues and so forth.

Access and permitting is an important issue. And just to illustrate this point, this is the facility are access to saltwater facility; notice here, there is a the two-way roadway that has no shoulders and even though the turning radius is more than adequate notice the damage to the shoulder structure on the left and on the right notice the tire tracks and it is a significant issue. Notice in this case that the facility was paved which is not always the case. In this situation you have access to the energy development by using an existing farm driveway and notice that there was really no improvement or otherwise treatment done to it. So every time it rained this was what you end up with. There are many other impacts: operational and safety.

It has been documented for example here-I live in San Antonio very close to the Eagle Ford and when the increasing of truck traffic became evident, there were also increases in documented crashes and fatalities. You can document this using other commercial data, for example, commercial vehicle violations, but the impact that I mentioned regarding overweight. Well, it turns out that a significant number of violations pertained to exceeding the maximum tandem axle weight as in this case is that of 34,000 pounds and note that energy-related traffic is ranked higher than non-energy-related traffic.

Let me try to summarize some of these issues in terms of things that are happening right now. I think nationwide there is an increasing amount of awareness When you talk to stakeholders and the county officials, it kind of depends. Most of the focus is related to environmental and water issues. One of the needs that I see is to continue to increase awareness about the impact on transportation and infrastructure with the numbers I mentioned earlier.

There are a number of state and local efforts. Everywhere, we find fracking activities with Pennsylvania and Ohio and Texas; there is continuous reference to activities for example in the form of regional conferences and so on. Most of these efforts tend to be isolated and there is little on the national front in terms of national conferences. I could mention that at the TRB annual meeting this year, there were a couple of sessions and a workshop that mentioned impact of energy development on infrastructure. I could also mention the upcoming conference in 2014 that is sponsored by ASCE and will take place in Pittsburgh. Those of you interested in getting information about the conference please contact me at the end. We will find a way to add you to the program.

In terms of needs: There is a need for a national research agenda since most of the activities have taken place at the local and regional some state level, but there is very little at the national level in terms of setting a comprehensive robust research agenda such as this. There is an upcoming NCHRP project that we will attempt to look at some of these practices but again it is not as formal or otherwise a significant research project.

There is a need for documentation of case studies in a number of other areas including coordination with the industry. There is an increasing level of recognition that the earlier agencies begin coordinating with the industry the better everyone will be. Frequently officials will learn about an energy development when the request for a driveway permit comes in. By then it is too late. I think the time for coordination with the industry is at the beginning of the leasing efforts, drilling permits and so on.

There is a need to document best practices regarding pavement repair, rehabilitation, and reconstruction and look at what people are doing in terms of operations and safety, roadside management drilling permits, and take a look at the laws and regulatory framework because one may be working in one state may not necessarily work in another state because the laws and regulatory framework are different.

There are other needs for example in terms of transportation planning. The work has only started to scratch the surface in terms of what the supply chains are and what I'd like to highlight is that there is a need to document supply chains at different geographic levels depending on what type of analysis you are interested in. Not just supply chains at the state level but also at the regional or even local levels. There are implications regarding regional metropolitan planning and there is a need to document case studies and best practices.

And don't forget we are talking about multi-modal considerations, not just about truckloads, but it is also about rail. In many situations rail constitutes a significant component of energy development, ports, and waterways and of course international development. And I should not forget environmental issues. At the end of the day, emissions and air quality are a very strong driving force that drives the conversation on regional planning.

Let me just close this presentation by showing you a time lapse of the Barnett Shale and this is just to illustrate that assumptions of uniform growth rates per year, 2 or 3 percent per year, uniformly really do not apply.

And pay attention to the lower right corner of your screen here in Johnson County. This is the situation that was in 2001. Notice here in gray the location of the permits that existed up to that point. What you're going to do is start clicking and then you see how all of a sudden the number of permits, primarily dry gas, in Johnson County in the country increased.

So for this type of situation there's really no validity and the assumption of a uniform 2% to 3% growth per year.

That's about it. Here is my contact information. Feel free to contact me by e-mail or by telephone. Thank you.

Jennifer Symoun
Thank you and I do encourage it everyone to contact you if they have any further questions.

Our next presentation will be given by Mark Murawski of the Lycoming County planning commission. Please go ahead.

Mark Murawski
Okay thank you Jennifer. We're going to be talking today about our local experiences related to natural gas drilling in the Marcellus play. And we will be covering all modes of transportation in terms of what kind of impacts we are seeing here. Just as a bit of background, where we are situated. Lycoming County is one of 67 counties in the state of Pennsylvania.

We are about a three and half hour drive to the West would be Pittsburgh and another three in Southeast is Philadelphia. We are basically situated in north-central Pennsylvania and Williamsport is the county seat. But perhaps worldwide we are best known as the home of Little League baseball in which we annually host the Little League World Series each August. The other thing is that when Little League is not going on here traditionally we have been very sleepy town so those folks who remember the Andy Griffith Show and Mayberry RFD and that little town you can see that Williamsport was sort of like Mayberry RFD. That was into the Marcellus gas drilling activity started happening. Now we are the seventh fastest growing city in the United States because of Marcellus.

In terms of the discovery, Lycoming County officials became first aware of the potential of the Marcellus gas play in spring of 2008. How we found this out was purely by accident.

We had a call from our County Register Recorder's office to our Commissioner's office when one day saying that there was a sudden influx of customers who want to record land deed , and they had cowboy hats and boots on, they talked with a southern accent and they did not understand what was going on.

So our Commissioner started making inquiries as to why they were here at the base of that they were landmen who were coming up from the south and starting to process and assembling land leases to drill for natural gas as part of the Marcellus. So the commissioners knew at that point that there was something huge going on here and they needed to learn more about it.

The other thing about this once we started to get into it is that the Lycoming County commissioners had adopted a comprehensive plan and the local MPO here had a long-range transportation plan done with it in 2007. At that time there was really no mention of the Marcellus gas exploration or transportation impacts because really they were not known at that point. So once these plans which got a state award by the way, at that point were completed on adopted then the very next year with the gas drilling took root here they were already outdated.

So all this does is tells all of us in the planning world that when you're developing a plan you need to make sure that it is flexible so that you can adapt to changing circumstances that could be a huge transformation or a game-changer in your region. So we are now taking into account the Marcellus experience. The map on the screen shows the extent of the Marcellus play. As you will note that this gas play is the largest natural gas find in the United States right now and second largest globally. It stretches across a large portion of Pennsylvania, New York, West Virginia, Ohio and Maryland. And the U.S. Geological Survey estimates the formation's total area to be around 95,000 square miles. It ranges the depth of 4000-8000 feet containing more than 410 trillion cubic feet of natural gas that supplies the nation's energy needs. Under that you see the Utica shale which is another layer in the cake if you will of energy development which has promising oil reserves in it. So after the Marcellus play is well cultivated, the Utica is another opportunity that can come to light. Our boom here which was similar to the Gold Rush in 1849 in California, but our boom started in October of 2007- very small actually. Just a couple wells were drilled in the county and the first one was being in the Cogan House Township of October 2007. Now we have a rich history of energy development in Lycoming County, but are mainly attributed 100 years ago to the lumbering boom and also the development of coal.

Lycoming County is the largest county in Pennsylvania geographically speaking and we are actually bigger than the state of Rhode Island. Now with that kept in mind approximate 60% of the county's total land area is now currently under land lease for natural gas exploration which comprises over 691 square miles. So this is a very vast area we are talking about.

During the past six years natural gas drilling skyrocketed from just a few wells in 2007 where by 2012 we actually had the highest number of Marcellus horizontal wells drilled of any of the 40 counties in Pennsylvania where Marcellus exists.

So we are now the leader in Marcellus gas development. Because of this and also our neighbors to the north which include Bradford, Clinton, Sullivan, Tioga, and Potter Counties, we are now seeing several thousand wells drilled in the multi-county area and it is basically changing the everyday aspects of life throughout the entire region.

It is not just limited to the transportation impact - it covers housing and environmental and just a whole host of things. The Pennsylvania Department of Environmental Protection basically maintains an updated database on the names and locations of well sites and then our County Department of Public Safety also has a database where we address actually each of the wells for 911 emergency responses because a lot of the wells are situated in remote areas. Basically we have had 775 wells drilled to date. And we are looking at another permitted amount of 329 wells through DEP. These can be coming on line soon.

This map shows our county and the dots you see show where the well locations are at this point.

Williamsport is at the center of the map by the main highway systems converge and they also traverse the Susquehanna River.

The way the geology is an Lycoming County that are really no Marcellus wells being drilled South of the Susquehanna River and it is all North. This is really mountainous terrain and state forest land you in it is different than a lot of other gas places in the United States such as Barnett, Eagle Ford or the Bodkin in North Dakota.

We have a lot of mountainous terrain which is not flat so it also presents transportation challenges because these roads although they were not built to handle the heavy traffic -- they also have curvature and steep slopes that make truck traffic very difficult to navigate to this remote area.

This slide shows a compressor station.

We have 40 such compressor stations now built in Lycoming County and for those of you who don't know, what the stations do is compress the natural gas by pumping up the pressure and the provides the energy to move the gas to the next section of the pipeline network. So think of compressor station as an engine that powers the natural gas movement to a series of pipelines to market and a lot of our gas is going obviously to serve the northeastern United States.

This shows a gathering line that is being constructed on one the mountainous terrain that I spoke about earlier. These gathering lines these comprise the construction of hundreds of miles that connect the well sites to the main trunk lines that take the gas to market. This map shows the overall large pipeline system traversing Pennsylvania.

We are located on the Transco going through the redline of the center of the state so the well sites have the gathering line built to connect to the main Transco line. The line sort of in purple to the north of us in Tioga and Bradford is the Tennessee Valley line another main East-West line where some of the gathering lines are also connecting. We created a task force back in 2008 we were the first counties to do so in Pennsylvania.

Basically it was to try to gather issues related to natural gas drilling and we are not a regulatory body and this task force does not create laws or regulations over the gas industry. We have 18 members. You can see the different areas on the slide that we represent, try to be broad-based to cover all the major stakeholders in our community who are affected by this and we have seven separate subcommittees that look at specific areas of issue and that report back. The task force also back in 2008 decided to go to Texas and to learn about the Barnett Shale experience. The Cesar Quiroga spoke of earlier.

Now the basic requirements that Cesar Quiroga went over earlier of the Marcellus experience that were by the State Department transportation.

Each well pad typically uses 3 to 5 acres of land per well and 6-8 wells per pad and developed over 4 to 6 week period. We have 5000 tons of aggregate needed which generates 400 truck trips to do that. That there is actual drilling that occurs that requires more equipment, water and cement that generates another 150-200 truck trips over another 4 to 5 week period.

The third stage is the fracking we actually take the natural gas deposits that takes another 800 and 1000 truck trips transporting 3-6 million gallons of water and frack sand over another 1-2 week period. At the end of the day, per pad, you're looking 2-3 months of development of today 1250-1600 cumulative truck trips over roads that maybe had 100 or 200 vehicles a day on them previously.

So with the look at is two thirds of our road system and Lycoming County is locally owned by different municipalities and not the state of Pennsylvania. The other third is owned by the state. Again many of these roads were made to accommodate heavy hauling activity but the PA Motor vehicle code basically sets forward the process to establish weight limit and bonding requirements on these roads where the heavy hauler has to make financial improvements to upgrade the road to the road owner's specification. Now the county, since we don't really own the roads we work with Pennsylvania DOT and the local municipalities to educate them on the proper way of posting and bonding roads that it can be legally enforced for any violations. We do that through our local technical assistance training series (LTAP).

For the most part gas companies are doing a good job making necessary repairs to local roads. We have had some isolated issues, but they're not a very big concern.

Another concern we have is the accelerated deterioration to our lifecycle payments on roads that are not bonded. So who's going to pay that bill? In Pennsylvania basically the transportation funding is derived from the gas tax at the state level. And then there is an Act 13 fee that I will speak to later.

But we have no comprehensive database on the condition of local roads. We do on the state road system. This gives an example of some of the road damage we've seen in Tioga County to the north in the first year of drilling before they did winter maintenance plans.

So Lycoming County never saw this kind of damage, but we learn from our neighboring counties and got winter maintenance plans in place with the gas companies so that we keep our roads in a good state of repair.

Just mentioning that some roads went from 150 to an additional 700 trucks per day and that has been quite a challenge. This map shows all of the posted roads in the county on the state road system and we do not have a database of the local roads.

Each municipality handles that on their own, but about half of our state roads are what are posted. We have had impact on local bridges as well and we have about a total of 100 locally owned bridges over 20 feet long and 25% of the bridges are structurally deficient. Of another 100 locally owned bridges between 8 and 20 feet long and 35% of those are structurally deficient.

I should point out that the County is the only county in Pennsylvania that actually did a pilot where we identified locally owned bridges and are actually inspecting them.

No county in Pennsylvania has a similar inspection program on locally owned bridges 8 to 20 feet long, but the Feds to not require that and it is optional because gas traffic has been rising over these bridges and we want to keep them safe.

In terms briefly of some of the transportation modes, our transit provider is River Valley transit. They are in the process of converting their entire transit fleet to natural gas which is about 30 buses and they are developing a CNG fast fuel station at the transportation hub.

So this should be on line this fall and it shows that we are using local uses for the gas underneath our feet. At the airport similar things that we have seen, right now we only have US Airways serving the airport that provides three daily flights to Philadelphia International.

Since gas took effect we are now seeing 50% of all of our passenger traffic related to gas.

Our planes are full and about 60% of our corporate aviation traffic is Marcellus related as well. So we've seen a 44% increase in commercial passenger traffic since gas started and if you look at other airports across the northeastern United States during the same period, they are seeing their traffic fall.

As a result of this we really are trying to get more direct air service beyond Philadelphia and we are negotiating with airlines now for direct service to Washington D.C., Charlotte, Chicago, and Orlando to help to better address Marcellus customer needs since they are not too nuts about going to Philadelphia Airport. We're also the process of replacing our airport terminal building for 13.6 million dollars so that we can grow and expand to meet the Marcellus need. Our budget at the airport has definitely gone from red to black because we have a number of leases with gas tenants now to play the rents to the airports authority and have invested over $7 million to improve airport property.

The railroad impacts have been significant as well. Right not about twenty percent of their rail traffic is gas related and it helps take trucks off the road, but it's not a substitute but there still needs to be an interface point since the wells are in locations not served by rail, truck traffic still has to happen there. You see a lot of types of Marcellus gas commodities transported by rail such as frack sand and the pipe and other kind of equipment related to make the and they come from a large swath of the United States.

Our main transfer terminal point between rail and truck freight for Marcellus or for anything is the Newberry Rail Yard which is now operating at full capacity when there were substantial vacancies there before Marcellus. We just finished spending a $10 million TIGER II grant to upgrade our rail infrastructure for the Marcellus demand.

We use an impact fee that's approved by the state legislature that gives Lycoming County and its local municipalities about 10 million to address the drilling impacts, but all $10 million is not devoted just exclusively to transportation needs. It competes with other types of community impact needs like water and sewer and public safety, etc.

So it is a tool but not really enough to deal with all of the needs that we have. That is my presentation and I will turn it back over to Jennifer.

Jennifer Symoun
Thank you, Mark. The final presentation is given by Coral Torres of the FHWA Office of Freight Management and Operations.

Coral Torres
Thank you Jennifer and good afternoon everyone. I want to say thank you to Cesar and Mark for these good presentations. They are experts on the subject here-I did not want to take too much time go into detail about the subject.

I did want to talk about a meeting that we had during June this past summer in relationship to this topic. As a matter of fact Mark was one of the presenters that we had participate in these meetings. So as you can see Mark has really good information about the topic. I just wanted to talk about some of the most important takeaways that we had from the meeting and to talk also about the peer exchange program that we have here in the FHWA Office of Freight Management and Operations in case anyone is interested in taking advantage of the opportunity. So again my name is Coral Torres and I'm currently the program manager of the peer to peer program.

So as I was mentioning, the peer to peer program started about five years ago in our freight management office and the overall objective is to bring transportation professionals together with experts in the field and provide technical assistance in order to enhance overall freight skills and knowledge.

All public entities that have any freight related programs or any freight related activities are welcome to apply to get assistance through the programs were talking about the State Departments of Transportation and the Metropolitan Planning Organizations.

Who can participate? As I mentioned, any public entity that has a freight related program and has some sort of issue that they would like to discuss with experts at the national level, they're encouraged to apply and to participate in our program. What we have here is a list of our previous participants or requesting peers. For example we have the Maryland Department of Transportation and the Port of Seattle. We have had regional planning commissions such as the Delaware Valley Planning Commission and Puget Sound Regional Council and so forth.

Even though private entities are not allowed to apply we do encourage participation in terms of bringing feedback and important information to share with our applicants and the other stakeholders we have in our meetings.

Pretty much the areas of focus for the program are freight planning, operations, project development, and policy. For the past five years we have been able to develop a series of different meetings.

What you can see here is an example of some of the topics we have been able to develop based on those five main general topics that we usually cover.

So we have been able to develop and implement meetings in relationship to how to work with freight data, how to develop the TIP and STIPs , multijurisdictional planning efforts ,vehicle size and weight issues and permits and so on and so forth.

The last one like I mentioned was the one related to the impact of fracking at the state and local level. So we don't focus specifically on the list that we have here. Once the peer or the requesting peers submit their application, we just make sure that it complies with one of the topics on this list or that it is a good fit within the five main focus areas that we manage and assist them in developing an agenda within those five focus areas.

What do we provide with the program? We pretty much have three types of sessions that we can work with. We have the peer work sessions which are a combination of informational session and some sort of educational exercises. We bring peers together and have presentations with a Q&A session and then throughout the rest of the meeting we will have an educational exercise.

For example we had a meeting last year in which the Pennsylvania DOTs met with Texas DOTs and Oklahoma DOTs to talk about their permitting software. They were able to travel to the Texas and Oklahoma DOT facilities to get to know more about the software and the program and the modifications that they have to do according to the challenges within the region. And they were able to work with the staff and directly with the software. So they learned a lot and they were able bring those lessons back in order for them to update the system in Pennsylvania.

We also have the peer roundtables and workshops. This is more of an informational session in which we're going to have presentations and Q&A sessions specific to one topic.

One thing we try to do is to try to develop a very comprehensive agenda in which each of the presenters is an expert in one of the specific elements of that issue in particular.

So, for example, for the fracking peer exchange we had presenters from the Wisconsin DOT, the North Dakota DOT, Pennsylvania DOT, the Pennsylvania State Police, some of the MPOs and RPOs, and other regions in the country as well as New York. All of them were able to present a specific topic.

For example we had MPOs and RPOs from Pennsylvania talking about how to incorporate the impacts of fracking into the planning process. Then we had the state DOTs talk about permitting and administration. The state police talked about enforcement and so on and so forth. Last but not least we have the freight scan which usually involves observing freight operations firsthand allowing for greater understanding of operations and the possibility of implementing successful solutions elsewhere.

So, an example, which we were not able to do during the fracking peer exchange because we had a very packed agenda, but we were hoping to go to one of the fracking wells to look at the operations and get a better sense of what the level of truck traffic and the equipment that they use in the wells is in order to educate the requesting peers and also the peers that were presenting during the meeting as well.

Another example is we had a meeting in Memphis earlier this year in which the topic was multi-jurisdictional coordination and we could bring MPOs and state DOTs as well as some private entities like FedEx, BNSF, and Canada Rail together in order to talk about the issues of the region in terms of infrastructure and operational challenges.

We were able to take the tours of the FedEx hub at the Memphis airport, the BNSF terminal and facility in the Memphis area as well and that was very informative for everyone. We were able to take a look at the operations and the challenges in terms of infrastructure and operations surrounding the facilities.

Now I will talk briefly about some of the takeaways and the outcomes of the last meeting that we had which the title was Impacts of Fracking Operations on State and Local Roads. As I mentioned, we had the meeting in Pennsylvania and one of the MPOs in New York was the requesting peers and we were able to bring several stakeholders from around the nation to talk about different topics like I mentioned. We talked about the state perspective and MPO perspective on the impact of fracking on local and state roads, permitting and administration, enforcement, and also about coordination between all of the agencies.

From most of the state and local transportation agencies, the primary source of information relating to the fracking activities has been anecdotal.

This provided an opportunity to bring everyone together and actually hear from all of the public and private entities that have been directly affected by the natural gas and oil boom.

So it was a very informative exercise, and like I mentioned Mark was there. We had other similar presentations that were presenter during earlier activities and it was very informative to all of the parties involved.

Some of the takeaways I wanted to talk about where some of the other discussions that we had earlier. I did not want to cover too much information about what Mark presented but in terms of MPO and RPO perspective, it was very interesting when Mark and Amy Kessler, who works at the North Central region, one of the RPOs in the region presented. It was very interesting to hear how dynamic, in fact, this whole boom was for the region.

We're talking about some very rural areas where the RPOs have very limited staff because of what the Census has defined for them and what they get by formula funds by Census and other criteria and they get very limited funding because of this. So when this happened it changed drastically the elements they had to work with and it brought a lot of challenges to the planning and the staff that work at the planning organizations.

So a lot of what we heard was how much there was an increase in traffic volume and congestion. We are talking about an average commute of 15 to 20 min. to a commute that might take more than an hour, maybe two hours in a small region. So that was a challenge for the planners in terms of operations. Some of these regions don't even have traffic lights because there in very rural areas.

So how are they now going to deal with all of these issues with very limited funding? And how to take care of those issues in a very rapid manner. Wear and tear on the roads, you've seen it on the slides Mark presented earlier, but it is a very serious issue terms of safety and operations. Like I said, there is very limited funding for the MPOs to work with.

So one very interesting thing we've heard was that some of these companies do care about taking care of some of the roads that they are damaging. One very interesting story that we heard was that some of the companies do invest money and do create superhighways because they invest their own money so they decide to follow the standards.

Now the issue for some of the planning organizations and state DOTs is pretty much how to maintain a superhighway that has 2 to 3 times the thickness of what the usual pavement would have. That is a very high operational and maintenance budget that they have to deal with in the future to maintain such infrastructure like that.

Like I mentioned, they're very limited with the staff that they have so we are talking about some of these RPOs only having one staff person and this person is working part-time sometimes. So now they have a very high demand of issues that they have to deal with. So how can we fix this? This is a very serious and dynamic situation. All these are safety issues in terms of trucks traveling at high speeds on rural roads and inspection of local bridges because a lot of these vehicles are overweight and oversized. So we managed to see that some states have created records of some of the bridges and the roads and that they have been able to share that information with the state DOTs, but some of the local entities have come forward and started gathering information to share with the state DOT to see if they can work together in some sort of way to take care of the bridges that are in really bad shape. In terms of the permitting and administration, we have seen that there are a lot of these trucking companies that are not necessarily established in the state, but they come from other states. So there might be a misperception about the regulations because a lot of the oversize and overweight regulations do vary from state to state.

So there's a huge challenge for the state DOTs, and the local entities to educate the trucking companies that are transporting the machinery, chemicals and, water to the fracking wells.

Evaluate your resources. The state DOTs did mention that the demand of permits submitted was quite drastic. So they did seek assistance from the locals and the locals also provided the permits for the companies. That is the way in which we can see the collaboration because it is going to be very difficult for one entity alone to take care of or manage all of the issues involved with impact on the roads, permitting and enforcing.

So this is one way that we can see how the different entities are collaborating and they're also getting data about all the sizes of the different measures that they can that later be used to assess the situation. We happen to see how some of the DOTs simplified the application process by providing annual or blanket permits because a lot of the private companies-they saw pushback from them and that creates a lot of issues with citations and violations and breaking the law, and that is the last thing that you want to see out there. Because they are oversized and overweight, you also see pushback from them in terms of complying with getting permits as well.

So that is one way for them to keep track of the permits. And also, they were coordinating with the state DOT as well in terms of violations and citations because they want to keep track of how many companies are violating the permitting process of the oversize and the overweight regulations. This is one way to establish metrics in the areas that this is occurring or where we should have more enforcement. These are measures we can take for the companies that are recurrent violators.

So that is pretty much some of the main takeaways that we had from the meeting. Like I said, if anyone is interested to take advantage of the program, it's open to public entities.

We do have a list here of previous public and private entities that have participated and we usually share that with our applicants.

If they need assistance in terms of organizing the logistics of the meeting or getting contact information we provide all of that assistance to the requesting peers. One of the benefits of the program is that we do provide travel planning and reimbursement. We provide assistance with logistics in terms of coordinating all of the travel for the people that will be presenting. If they need lodging we can coordinate that as well. We do ask for the requesting peers to assist us in terms of finding a location to gather all of the participants and have the meeting. But overall, we do take care of most of the incidentals and most of the planning process of the meeting.

One thing that we do ask for is for all of the requesting peers to complete a final report and we usually keep those in our library. We also post that information in our website and we also develop flyers to share with our applicants and other peers that are interested on specific topics. You can find information as well on our website. So that is one of our requirements that we have for the program if you're interested in participating. Our contact information is here on this slide. The website has all of the information in terms of how to apply and the application form. Once you complete the application form you can submit it to That's all I have for today if anyone has any questions.

Questions & Answers

Jenifer Symoun
All right thank you Coral Torres. I will leave this slide up for a few minutes to so that everyone can get the information if they want it. Now, we will start with the questions that come in and if anyone thinks of additional questions, please feel free to type them in. Let me just go up to the top.

We have a question for Cesar Quiroga and possibly Mark as well. Can you explain the factors that have driven the dramatic increase of petroleum and natural gas extraction for since 2007-2008?

Cesar Quiroga
Sure. There are several factors. One of which I think is the most important one is the oil and gas prices. And the relationship between oil and gas prices as a matter-of-fact. I mentioned that there were several enabling technologies beginning with the hydraulic fracturing you just put around since the 1940s. Then we have the horizontal drilling since 1980 and then the three-quarter fracking 1996-1997. So that still does not explain the huge increase in production in the mid- to late-2000s. But if you look at the price of natural gas then you understand why. The price of natural gas increased dramatically by a factor of three to almost four and the low to mid-2000 and then perhaps because of the glut, it went down.

By comparison the price of crude oil remained very much low throughout the 90s and 2000s and only in the late 2000 began to increase. So right now the price of crude oil was maybe two or three times what it was back in the mid-2000s. This was interesting to see what happens with Barnett shale which saw a dramatic increase in production in the mid-2000s. Because at that point the price of gas, natural gas was high and Barnett was a dry gas formation. The price of gas then went down and if you notice the Eagle Ford shale formation is a combination-it had the dry gas and it also had oil. So what we have seen is a dramatic increase in the number of rigs that have actually been moved from North Texas to South Texas to address that and it is a combination of things.

This is also another question related to the type of technology. You have the technology that requires a lot of water which is hydraulic fracturing. But if you have other mechanisms to decrease the amount of water that is recycled and we are beginning to see the waterless fracking which will result in the lower impact. So you may still have the same level of production and a lower impact.

Jennifer Symoun
Mark, would you like to add anything?

Mark Murawski
Yes he got that right there. It's primarily the technological advances in hydro-fracking that we have seen. In our area, in the Marcellus we have dry gas. So that comes with certain types of uses that can be developed as opposed to wet gas.

The wet gas in the Marcellus is more concentrated in the Southwest part of Pennsylvania so the commodities can be developed better from wet gas and be more profitable. The drillers shift from the dry gas area to the wet gas area and then vice versa, and if commodity prices change they might move back. So it is a fluid process basically within place among place depending on the economics of it.

Jennifer Symoun
All right thank you. Mark the next question is for you have you experienced public concern over siting and public rail transportation safety? And if so, how have you addressed it?

Mark Murawski
Yes there has been public concern about this no doubt. I would say, at least on the rail transportation safety, not as much.

We have an excellent rail system here that has been fully upgraded so the condition of it is well and we know what is being transported on the railroad as far as hazardous materials and things like that. We have had no accidents with rails since Marcellus occurred. And so we have not really heard any concerns on that side of it.

But obviously the siting of the wells being in remote areas that are difficult to access and the trucks going to small communities that have an inadequate capacity to handle all of the sudden traffic at intersections-these have definitely raised public discontent. But our problem is as traffic ramps up and then it may come back down due to a changing economic situation with gas, then what to do about it? We're not in the position as an MPO to make large investments in upgrades in the capacity our transportation system to accommodate this sudden increase in traffic. And then on the ramp down period now we have tumbleweed blowing over those empty roads.

So we need to find a way to balance these investments and it is difficult. And the public oftentimes gets confused and they don't understand it. They just know they don't want to sit in traffic. Our area is different than Philadelphia for example.

If we have to sit through two cycles at a traffic signal of the intersection here then we get very mad. Where Philadelphia, they might love it. But again it is also public perceptions that we have to play with.

Jennifer Symoun
All right thank you Mark. Another question for you. How many trucks serving the wells require the overweight permit?

Mark Murawski
That's a difficult question to answer. I don't have the data about that but what I will tell you since PennDOT does most of the permitting, in Pennsylvania the legal loads without the permit are 40 tons. So if you are traveling with the truck that is 40 tons or less then you typically don't need a permit unless you come across a weight restricted road or bridge that would require one. In our county we are in pretty good shape in relation to other counties in terms of structurally deficient bridges.

To give you an example, we have 515 state owned bridges throughout our County and only five of them have a weight limit posted of less than 40 tons.

A lot of your frack sand trucks and water trucks try to stay within the limit so they don't need a permit but sometimes they do go over that and sometimes they go over so sometimes there also transporting not just overweight, but oversized vehicles to get equipment to the well sites. And in those cases on many of those routes they needed oversized vehicle permit as well.

Jennifer Symoun
All right another question for you is can you address the traffic safety issues related to the growth in traffic volumes and also the concerns with highway-rail grade crossings on the routes to/from the sites?

Mark Murawski
Yes this is a good question. What we did for traffic safety - we wanted to compare the accident statistics along a roadway system pre-Marcellus and post and what we found was that there is a small increase in the accident rate. However, it was not out of line with the amount of new traffic or additional traffic using the roads. So you would expect the accident rate to go up somewhat with the higher level of traffic involved at these locations. I did not see a definite cause-and-effect there.

What we have done though is some of these tracks they may even drive the posted speed limit. But because of the types of trucks and what they're hauling and the weather conditions up here sometimes, we worked with the gas companies to say even if you are within the speed limit, you may want to slow down more to add an extra margin of safety. That gives the rest of the drivers on the road a better comfort level because they are not used to seeing this amount of heavy truck traffic.

The highway rail grade crossings--even before Marcellus hit, we had a very comprehensive upgrade of our railway crossing program already put in place and we already spent a premium as an MPO to do that. So the locations that we are talking about have pretty much been addressed and we had gates and the signals and all of your upgraded railway safety stuff in place.

So the crossings again, they're mainly in the urban areas and not really out in the areas where the wells are. Once you get out past the urban area where the truck- rail transfer occurs when you're not really dealing with rail crossings at that point.

Cesar Quiroga
Can I add something to what you said? In Texas, in relation to the safety issues, in relation to truck traffic volumes, when we conducted the research a couple years ago we focused on North Texas and West Texas and we noticed, just like Mark said, a relatively small increase in crash rates-nothing significant that led us to conclude early that the impact was not that significant. But interestingly enough in South Texas you have a combination of relatively low density and humongous increases in truck traffic. The result of that has been a significant increase in the number of crashes and fatalities. So it also depends on the geography, the road network and the relative amount of traffic compared to what was there before.

Jennifer Symoun
All right thank you. And I should mention that I think most of these questions were directed to Mark, but Cesar feel free to jump in if you have any thoughts as well. The next question for you is do environmental concerns outweigh transportation concerns? Tell us about what you hear most from the local public?

Mark Murawski
I would say that the environmental concerns are there. There is a particular group or couple of groups in our county that do constantly issued news releases and hold rallies and things about fracking and all of that. Sometimes they bring in folks from other parts of the country to help them on this to make the case. So the environmental concerns are there, but I would not characterize them is widespread among the general public here.

Another reason for that is that our State Department of Environmental Protection which oversees the environmental aspects of drilling operations is one of the toughest environmental agencies of the United States as a state government agency.

So they do go through a very rigorous permitting process and to look at the environmental impact on the well by well basis. So not that things can happen or not that there cannot be a spill, but when that occurs, they are very quick to fine the company or cite them or even shut them down if they're doing improper things.

So I think an adequate level of safeguard. Is there room for improvement? Certainly.

But I cannot say that one overweighs the other at this point.

In fact one of the big problems I have had so far as the shortage of housing because we did not have a lot of housing before Marcellus kicked in and then we all these people wanted to move in with housing so our rental units skyrocketed. A lot of the local citizens that were renters were very upset that the rents were doubling or tripling overnight and they did not have a good gas-paying job but rather had their old job. So that was certainly something that we hear a lot about is housing.

Jennifer Symoun
When is and at what level is fracking-related traffic projected to level off in Lycoming County? Will you consider this level of activity the "new normal?"

Mark Murawski
Well, Elaine's question is really a great question. Although it is a crystal ball type of answer unfortunately. You have fracking as we mentioned is related to the economics of gas and its profitability and now that the natural gas prices are trading very low, we have seen this leveling off of activity.

But I will look at into the future is if the national economy stays poor and you have an abundance of natural gas supply on the market and not cultivating enough demand, the price is likely to stay depressed for a while. If some of the basic factors change the prices go up the profitability will be there and they will be back in full force. But the notion though that people say they will be gone, and that will be the end of this, I don't buy that. These gas companies have made a significant investment in our communities to build this pipeline infrastructure in place.

For example, we knew we were for real with Halliburton sited a regional headquarters here.

So they will not make these investments if they think this is a simply a quick boom and bust kind of situation.

Is that the new normal? It's hard to say. What I will say is that period of time a year or two ago when we were really going gangbusters here, It was hard to keep up with that, transportation needs perspective. So the fact that it has leveled off is sort of a good thing in our minds.

As we are better able to systematically address some of these impacts in a way that is as knee jerky or urgent as it was when there was a bonanza going on.

Jennifer Symoun
Thank you I think you have to the question about the buts that will eventually, but the follow-on question that will pose to Cesar Quiroga first are what are the activities that could reduce curtail fracking-related activities?

Cesar Quiroga
Yes I think we addressed those already to a large degree that it is a combination of oil and gas prices and also technology.

I mentioned briefly the industry is attempting to find ways to use less water and I've heard of them recycling water by using pipes and other mechanisms and I've have heard of otherwise we are attempting to use waterless fracking.

So these are all factors that will probably result not necessarily less fracking per se, but less impact to infrastructure.

Jennifer Symoun
Mark anything to add onto that?

Mark Murawski
Just something I forgot to mention that I probably should. That we are now seeing the development of extensive water line distribution facilities that are connecting our water bodies with the well sites and by doing the water line distribution it reduces the amount of truck traffic that has to haul the water between the rivers and the creeks and the well sites. So that has been a good thing that that infrastructure is getting online now.

Jennifer Symoun
All right thank you. Mark another question for you. Is there planning and zoning in Lycoming County?

Mark Murawski
Yes absolutely. All of the Lycoming County is all zoned, but we have 52 different municipalities and the way the whole zoning program is set up is that the local municipalities basically has the right of first refusal to do zoning on their own. If they do zoning on their own and they do their own ordinance and make their own zoning decisions.

If they choose not to do the zoning on their own they come under the County Zoning Ordinance and about 17 of the 50 municipalities in our county are under the County Zoning.

There has been a court case pending in Pennsylvania regarding trying to limit zoning enforcement and zoning related to natural gas extraction. We have not supported any limitations for zoning on that and we think it is very important to keep our communities viable and ensure that zoning is in place.

In terms of comprehensive planning, like I said, we have a County Comprehensive Plan and also have six multi-municipal comprehensive plans throughout are growth areas.

So we are fully planned and zoned here in Lycoming County to respond to this.

Jennifer Symoun
Thank you. I don't see any other questions typed in at this point. I don't believe I missed anything. So before we close out I just want to give our presenters one last opportunity if anybody else has anything that they would like to add before we close out today?

Mark Murawski
I can start on that. All I would say is that for those folks out that are across the United States that may be near a community you are either currently experiencing the natural gas development or maybe you are about to experience with the new play.

All I can tell you is to try to arm yourself with as many facts and research information as you can about this and to do some lessons learned with those who have come before you.

I will give an open invitation to anybody if you want to see what is going on here in the Marcellus you can certainly get a hold of me. If you want to make the trip and have your people come over and visit the area and see what has happened here few years that we would be happy to arrange for that.

We probably will not travel to your area because we don't really have time to make these long trips. But we have hosted communities all of the United States. And in fact even in the world.

And Europe and Africa we have had delegations come over because they are seeing gas play development in their areas as well. So that is a standing invitation for anybody. Either get a hold of us or visit us and we can give you some information through old-fashioned technology. Thanks a lot.

Jennifer Symoun
Thank you. Cesar, anything you would like to add?

Cesar Quiroga
No I would mention in closing that we are planning an ASCE conference on energy infrastructure and transportation. So if anyone is interested in presenting please contact me. My contact information is on the screen.

Coral Torres
I just wanted to mention that we do have a report for all of the meetings that we complete.

So we are in the process of redoing the final report of the last peer exchange that we had in relation to this topic so stay tuned if you're interested in getting a copy we will upload the report into the website that I provided earlier in the presentation.

Jennifer Symoun
All right thank you. So I don't see any other questions I think we will go ahead and close over today although a few minutes early.

I want to thank all of our presenters and also thank everybody for attending today's webinar.

The recording of presentations will be available online in the next few weeks on the Talking Freight website and I will send out an e-mail once they are available.

The next seminar will be October 16 and more information about the topic and a link to register will be available soon. I will send a notice through the freight planning listserv once the registration is available for that seminar.

The listserv is the way that we do advertise for all talking freight seminars. It's also a great way to share freight related information and I believe we have over 1000 members so if you have not already joined the web address of your screen you can go to join is up there.

Again I would remind everyone that if you're applying AICP CM credits for today's webinar that today's webinar is not yet on the AICP calendar, but I will send out a notice once it is available. So with that we will go ahead and end for today. Thank you everybody and enjoy the rest of your day.

Updated: 10/31/2013
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