The Permian Basin Petroleum Association has been on a years-long crusade to bring not just attention but real remedies to what might be the Permian Basin’s biggest need: adequate highway and road infrastructure. Michael Lozano, manager of Community and Legislative Affairs for PBPA, spoke to this magazine recently about the long road they have traveled, and the prospects that lie ahead.
According to Lozano, the Texas Legislature in 2014 passed a Constitutional amendment that allowed, for the first time, the transfer of funds from the Economic Stabilization Fund (also known as the “Rainy Day Fund”) directly to the State Highway Fund. Fifty percent of the ESF could go straight to road infrastructure.
The ESF itself is entirely funded through proceeds raised by severance taxes, which are levied on oil and natural gas production. “Predominantly, over the last decade at least, those have come from the Permian Basin. While there is activity across the state, there’s no question that the most prolific region in the state, for severance tax collections, has been the Permian. That’s still the case. The amendment brought a big change for what had been the two biggest issues in the state—funding and planning.
“Planning is easy to do,” Lozano said, “but without the funding you really can’t move forward with those transportation goals. So the Legislature really took big steps there. “We’re talking about billions of dollars each year now moving into transportation. That was a big first step.”
Lozano cited the help of some key legislators in this push. Rep. Tryon Lewis was one, as was Speaker Tom Craddick, Rep. Pete Florez, Rep. Drew Darby, Rep. Four Price, Rep. Brooks Landgraf, and Rep. John Frullo, as well as (on the Senate side) Sen. Kel Seliger and Sen. Charles Perry. There were others as well.
“So the funds started being collected in 2015 [into the Highway Fund] and we really didn’t start seeing that funding generate great value [for planning purposes] until later on,” Lozano said. “Then this last session, the Legislature was able to take some of those dollars that were being created or generated through energy regions and was able to put them into different plannings. While the focus historically has been has been on highways like I-10 into Houston or I-35 or I-20 into the Dallas/Fort Worth area, getting the Legislature to focus more on energy-producing areas has been really important. And that has happened. One of those ways in which PBPA was really active was in testifying before House Appropriations and before the Senate Finance Committee and before House and Senate Transportation—especially testifying for House Bill 4280 by Rep. Geanie Morrison.”
The House bill Morrison put forward was drafted with assistance and input from PBPA. “We also testified in support of it and drafted a lot of letters of support within the House and the Senate to move the bill forward,” he said. “The goal was statewide. There is a program at TxDOT called the County Transportation Infrastructure Fund [CTIF]. CTIF was created to help return dollars to county roads in areas where there’s energy production. In the state, historically, there really haven’t been a lot of state dollars going to these roads, and so the state has focused on state highways, which are obviously very important, and the interstates, with some federal dollars, but there really has never been a way of driving dollars back towards the counties where a lot of the wear and tear is felt.”
Morrison, from Victoria, saw the “county roads” issue in much the way that people in the Eagle Ford region see it—as of paramount importance. “And we [PBPA] knew it was important to lead with someone who wasn’t necessarily right out of our own [Permian] region. It’s important to find coalition if you want to get a bill passed. It’s important to show that your support comes from more than just your own region. I think there are 13 members of the House who are from west of I-35 if you don’t include El Paso. And there’s about 30 in downtown Houston. So you’ve got to find ways to build a coalition. Rep. Morrison authored the bill in the House and we worked with her on it. We also worked with Sen. Pete Florez, who represents a lot of the new Delaware Basin activity. His district stretches all the way from Loving County to San Antonio and along the border. It’s a large district. But he has seen the energy activity from Eagle Ford, and Pleasanton, all the way to the Permian Basin. So he was a great supporter on this as well.”
Lozano said the coalition was able to focus the program to drive dollars to those counties that are most impacted by energy production and its demands.
“The program has just opened up,” he said. “Hopefully in the next few months we’ll see who’s applied for the grant program and who’s eligible and how much they’re eligible for.”
Lozano emphasized that PBPA has done a great deal to advocate, not just with these affected counties, but also with MOTRAN [see mainbar] and with the legislators.
“In the last session we were able to work through the Unified Transportation Plan [UTP],” he said. “Also, back in 2019 and going back into 2018, we supported several BUILD grants.” BUILD stands for Better Utilizing Investments to Leverage Development. The U.S. Dept. of Transportation handles the issuing of BUILD grants, which are investments made into regions where industry stands a good chance of generating economic activity. Said Lozano: “There’s no doubt if you put a little bit of money in the Permian, it will come back tenfold.”
He said PBPA has sent letters for “almost every” BUILD grant application for TxDOT for at least the last ten years, and probably even longer.
Lozano summed it all up succinctly: “Whether its working on the local level, the state level, or the federal level, PBPA has been a really aggressive advocate for transportation funding in Texas.”
—Jesse Mullins