The Impact of Fracking on Freight Distribution Patterns CFIRE 09-15 CFIRE November 2016 National Center for Freight & Infrastructure Research & Education Department of Civil and Environmental Engineering College of Engineering University of Wisconsin–Madison Author: Mark Abkowitz Vanderbilt University Principal Investigator: Mark Abkowitz Vanderbilt University This page intentionally left blank. Technical Report Documentation 1. Report No. CFIRE 09-15 2. Government Accession No. 3. Recipient’s Catalog No. CFDA 20.701 4. Title and Subtitle 5. Report Date November 2016 The Impact of Fracking on Freight Distribution Pattern 6. Performing Organization Code 7. Author/s 8. Performing Organization Report No. Mark Abkowitz CFIRE 09-15 9. Performing Organization Name and Address 10. Work Unit No. (TRAIS) Vanderbilt University 400 24th Avenue, South 11. Contract or Grant No. T002688 Nashville, TN 37235 United States 12. Sponsoring Organization Name and Address 13. Type of Report and Period Covered Department of Transportation Final Report 8/1/2014–11/30/2016 Office of the Assistant Secretary for Research and Technology 1200 New Jersey Avenue, SE 14. Sponsoring Agency Code Washington, DC 20590 United States 15. Supplementary Notes 16. Abstract The increasing production of domestic energy through the use of fracking will likely alter local/regional/national economies and corresponding freight distribution patterns (highway, rail, marine, pipeline) in the United States. The proposed project will assess the impact of fracking on freight transportation demand and corresponding distribution patterns, for the purpose of identifying where the system is or will become overly stressed (in addition to identifying where excess capacity has been created due to shifts in freight transportation patterns). This will be achieved by deploying a methodology in which multiple future scenarios are defined in terms of fracking activity and energy consumption, each scenario is analyzed according to the resulting freight distribution across modal networks using a routing tool developed under a prior National Center for Freight & Infrastructure Research & Education (CFIRE) initiative, and the results evaluated according to specific performance measures. 17. Key Words 18. Distribution Statement Energy consumption; Energy resources; No restrictions. This report is available through the Transportation Research Freight transportation; Impacts; Routing; Information Services of the National Transportation Library. Travel patterns; Energy; Freight Transportation; Planning and Forecasting 19. Security Classification (of this report) 20. Security Classification (of this 21. No. of Pages 22. Price page) Unclassified 50 -0- Unclassified Form DOT F 1700.7 (8-72) Reproduction of form and completed page is authorized. DISCLAIMER This research was funded by the National Center for Freight and Infrastructure Research and Education. The contents of this report reflect the views of the authors, who are responsible for the facts and the accuracy of the information presented herein. This document is disseminated under the sponsorship of the US Department of Transportation, University Transportation Centers Program, in the interest of information exchange. The US Government assumes no liability for the contents or use thereof. The contents do not necessarily reflect the official views of the National Center for Freight and Infrastructure Research and Education, the University of Wisconsin– Madison, or the US DOT’s RITA at the time of publication. The United States Government assumes no liability for its contents or use thereof. This report does not constitute a standard, specification, or regulation. The United States Government does not endorse products or manufacturers. Trade and manufacturers names appear in this report only because they are considered essential to the object of the document. The Impact of Fracking on Highway Infrastructure FINAL REPORT Prepared by: Vanderbilt University Prepared for: National Center for Freight and Infrastructure Research & Education (CFIRE) Project No. CFIRE 09-15 November, 2016 Page 1 1. Introduction The increasing production of domestic oil and gas production through the use of fracking (also known as “fracing”) places additional freight traffic on our nation’s highway system, oftentimes using roadways that were not originally designed for these volumes and associated loads. Consequently, concern has been expressed as to the damage to highway infrastructure that can be caused by fracking activity, as well as who should be responsible for roadway maintenance and repair. This is a particularly acute problem in rural communities, where the majority of fracking activity is taking place, roadways are not typically built to heavy haul standards, and jurisdictions are often manpower and financially constrained in overseeing management of the process. The objective of this project was to investigate this consideration by reviewing logistical, safety and infrastructure challenges associated with evaluating the impact of domestic oil and gas production in the U.S.; and identifying data sources available to profile the level of past, current and anticipated fracking activity in various geographical regions. Utilizing this information, a methodology to assess the impacts to highway infrastructure was developed and applied in a case study using the Tuscaloosa Marine Shale Oil Play in Mississippi. The project was led by Vanderbilt University, in collaboration with the University of Southern Mississippi and the University of Alabama at Huntsville. The authors would like to acknowledge financial support from the National Center for Freight & Infrastructure Research and Education (CFIRE), a consortium of University Transportation Centers funded in part by the U.S. Department of Transportation (USDOT), as well as the participation of the many individuals whose feedback was solicited through the conduct of interviews and surveys. The views expressed in this paper are solely those of the authors and do not reflect the opinions or conclusions of CFIRE, USDOT, Vanderbilt University, the University of Southern Mississippi or the University of Alabama at Huntsville. The remainder of this report is divided into three sections, corresponding to topical areas related to the overall project objective, and which were the subject of focused research investigation and development. The narrative in each case is in the form of a white paper, which can be extracted for use in a stand-alone capacity. Page 2 2. Evaluating the Impact of Domestic Oil and Gas Development on the U.S. Transportation Sector: A Review of the Logistical, Safety and Infrastructure Challenges Introduction Since approximately 2005, the U.S. has experienced an unprecedented boom in domestic oil and gas production. In 2014 the U.S. averaged 8,721,000 barrels of crude oil per day, nearly reaching the historical peak production of 9,637,000 per day in 1970 (USEIA, 2015a) and representing the largest annual growth rate ever (USEIA 2015d). Also in 2014, the U.S. natural gas marketed production (which excludes gas that is flared or vented) exceeded 27 trillion cubic feet, surpassing the 1973 record of approximately 22.6 trillion cubic feet (USEIA 2015b). This increase in domestic gas production has caused net imports of natural gas to fall from around 3.7 trillion cubic feet in 2007 to record lows of less than 1.3 trillion cubic feet in 2014 (USEIA 2015e). This peak production has since waned, but is expected to be achieved again if oil prices rebound to above $80 per barrel (Bellamy, 2015). These dramatic changes in oil and gas production have been driven by advances in two old technologies: 1) hydraulic fracturing and 2) horizontal drilling. Together, advances in these technologies have made it economical to produce oil or gas from ‘tight’ formations (where the oil or gas is trapped in impermeable rock layers), where previously it could not be profitably extracted. Consequently, domestic production of shale/tight oil has expanded from 0.34 million barrels per day in 2007 to 4.2 million barrels per day in 2014, and is now estimated to constitute 49% of total domestic crude oil production (USEIA, 2015c). Shale gas experienced a nearly six fold growth from 2 trillion cubic feet in 2007 to 11.4 trillion cubic feet in 2014 (see Figure 1) and is responsible for the sharp decline in imports noted above. Indeed, it is the technological advances associated with fracing and horizontal drilling that reversed the generally downward trend of domestic oil and gas production that had been in place since the peak of the 1970s production. Tight oil (million barrels per day) Shale gas (trillion cubic feet) 4 15 3 10 2 1 5 0 0 2007 2008 2009 2010 2011 2012 2013 2007 2008 2009 2010 2011 2012 2013 Figure 1. Increased Oil and Gas Production from Hydraulic Fracturing Source: Energy Information Administration (EIA). According to EIA, tight oil is oil found within low permeability reservoirs and includes, though not limited to, shale oil. However, EIA data with regards to shale oil is provided as aggregate of tight oil. Page 3 This rapid increase in production places substantial demands on the nation’s transportation infrastructure. Gas and oil wells are often located in rural areas, and supplies to drill, construct, and hydraulically fracture the well must ultimately be trucked to the site, even if other modes of transportation are available to move these materials closer to the well site from their origin, which can often