Greeley truck company owner works to secure trucking jobs amid statewide call to curtail traffic
February 18, 2017
Read the report
To read the report on reducing truck traffic in Colorado, go to the Colorado Oil and Gas Conservation Commission website.
Two years ago, Rod Steely's trucking operation in Greeley was running at full speed.
Steely, owner of Colorado Crude Carriers, was running about 42 trucks and about 44 trailers. Last February, he had to lay off 13 drivers and sell several trucks. Now, he can only run 21 trucks — and 10 are parked.
"I'm an optimist," Steely said. "I keep telling everyone I'm feeling good that things are going to come back this year."
While the oil and gas downturn is chiefly responsible for that blow to his bottom line — and the market is starting to pick back up — a continued movement to get more trucks off the road by piping crude oil out of Weld County could harm the trucking business even further. A report released by the Colorado Oil and Gas Conservation Commission, commissioned by the Governor's Task Force on Oil and Gas in 2015, identifies some of the impacts truck traffic has on Colorado communities and outlines a host of recommendations to reduce the volumes.
"I think one of the biggest benefits of this report is it's a compilation of a lot of different ideas and examples that different governments and different operators have tried, and I think it will help local governments who are trying to figure out how to respond to citizen concerns about truck traffic," says Kathleen Staks, spokeswoman for the Department of Natural Resources who was a facilitator for the report's three-day working group.
The report is not a regulatory action by any means, but more a list of recommendations, reminds Staks.
Between fall 2014 and February 2015, the task force held statewide meetings to hear concerns from people who were for and against oil and gas development as well as those in the middle. The task force came up with many items to discuss and then voted for nine to be investigated further, such as truck traffic.
Major impacts identified by the working group include speeding trucks, trucks near schools or bus routes, noise pollution, environmental issues such as emissions and dust, not using haul routes, truck traffic during peak times and density of traffic, truck safety and wildlife restrictions. For each impact, the report provides actions government and operators can take to mitigate impacts.
Installing temporary and permanent pipelines as well as centralized facilities seems to be an end-all solution for most drilling and midstream operations. For example, permanent and temporary pipelines can be installed to feed a site with sand and water to be used for completion operations. Getting the crude to market can also be done with pipelines. Weld's two largest operators, Anadarko Petroleum and Noble Energy, both have expansive underground operations.
However, some truck traffic will always be necessary, such as when pipelines are not feasible.
Adam Bedard, CEO of ARB Midstream, which has built a rail hub south of Evans, points out that the initial drilling and extraction operations happen over a month or even a few weeks and then they are gone. However, a site can provide resources for years, which means truck traffic for years. A house sitting on a truck route could see 40 trucks a day hauling crude.
Bedard recognizes the need for truck hauling as "critical to energy infrastructure development," especially at the beginning of a site when it may not warrant a pipeline. ARB Midstream's focus is on getting crude to market via pipelines where it's most economical, and on rail for other items involved in the oil and gas drilling.
"That was part of the premise behind the site, is when crude oil is moving by rail, let's reduce the distance the trucks need to haul it," he said. Bedard likens the pipeline to a tree, where small pipes from various wells feed into bigger pipelines and eventually a main vein, rail or centralized facility.
Bedard says his pipeline is big enough to take 800 trucks off the road every day. It spans 42 miles to get to the Grand Mesa pipeline in Windsor.
Economics, cost, reliability, safety and social impact are all factors that play into switching to a pipeline. Bedard's pipeline can run 170,000 barrels a day at around $1.35 a barrel. Truck hauling could cost double or triple that, he said. Also, trucks are not nearly effective in adverse weather conditions, can run into safety issues, and cause wear and tear on the roads as well as increased emissions.
"I think almost any producer wants their oil on a pipeline rather than on a truck. A lot plays into it — economics, one of those, certainly safety and social awareness are big things. There's value for them to get trucks off the road," says Bedard.
On the other hand, longtime truck haulers such as Steely of Colorado Crude Carriers, 20739 Colo. 392, Greeley, want things to slow down because people's jobs are at stake.
"I understand to a degree why they had to cut down, because it did get rather hectic at times with some of the programs they had going," says Steely, who was involved in the truck traffic working group.
He's felt the ebb and flow of trucking over the past few years as he saw out-of-state carriers move to his territory in northeast Greeley and set up shop. Many have left, Steely said, and even he has had to cut down on his workforce as more crude is being piped instead of trucked.
"I understood where they were coming from and what they were hoping to accomplish and do, but I also reminded them that we don't want to get too far out there because there's a lot of jobs at stake," said Steely.
He says a sluggish market and the elections have kept things quiet, so when he hears talk about reducing the impacts of truck traffic, Steely is a little concerned. Today, he's running at 45 percent of what he was two years ago.
He's keeping positive though, and maintaining relationships with producers while focusing on producers who can't rely on rail or pipelines to get their crude to market.
Overall, however, it looks as if the market may be heading toward using fewer trucks.
"Over the past several years we have seen the following operational changes be adopted by the industry, which have resulted in traffic reduction: Fresh water for completions is now almost universally being transported via temporary surface or semi-permanent pipelines from the source to the point of use," says Troy Swain, an oil and gas liaison for Weld County, in an email.
Swain has also seen crude sent to production facilities more and more by pipelines.
Staks said she is confident the latest report will be a solid tool in continuing the trend of minimizing the impacts of truck traffic on Colorado communities: "I think it will help operators as they think about ways to reduce the impacts from truck traffic and hopefully incentivize stronger relationships between local governments and operators to work together and explore different issues."
Steely plans to keep running, and hopes to finally tell some of those laid off employees to come on back.