Railroad yards indicator of Eagle Ford oil boom

San Antonio Express-News:

A few years ago, this was a cotton field distinguishable only for its location along a railroad track and a bucolic view of the Hill Country in the distance.

This year, an estimated 15,000 railcars will move through Hondo Railway LLC's 175-acre property — many of them carrying fracking sand bound for drilling operations in the Eagle Ford Shale formation.

All across South Texas, rail yards are adding track to service the shale drilling boom that's happening in a 20-county swath of the state, stretching from the border toward East Texas.

“We didn't know the Eagle Ford Shale was coming,” said Miles Lee, chief operating officer of Hondo Railway. “It just kind of fell in our lap.”

The company started as the South Texas Liquid Terminal in San Antonio in the late 1970s, specializing in transporting about 1,500 railcars a year filled with high fructose corn sweetener from the Midwest for soft drink bottlers throughout South Texas.

But about six years ago, the company lost its lease on Union Pacific land where it had been operating, and it had to quickly find another spot or shut down. It found acreage — the cotton field — at Hondo's South Texas Regional Airport, about 30 miles west of San Antonio off U.S. 90.

South Texas Liquid Terminal made the move and opened a new entity, Hondo Railway, with 13,000 feet of track and hopes of diversifying beyond corn sweetener. Now it has 80,000 feet of track and moves fracking sand, crude oil, ethanol, cornstarch and everything from lumber to power plant parts.

“We've gone from moving about 1,500 railcars a year when we were in San Antonio to probably moving 15,000 this year,” Lee said. “We've seen a little bit of an increase.”

And most of that increase has come from fracking sand. Each day, 40 to 50 railcars of sand moves through Hondo Railway. Baker Hughes already has built two storage domes for fracking sand there, and both the Lee family and the city of Hondo are negotiating with companies who want to build sites with rail access in the burgeoning industrial park.

It's not just Hondo Railway that's moving fracking sand.

“Not one site can handle it,” Lee said. “There's so much sand coming in.”

Thomas Tunstall, director of the Center for Community and Business Research at the University of Texas at San Antonio's Institute for Economic Development, said the growth in rail is part of a massive buildout of infrastructure, including pipelines and roads, related to hydraulic fracturing, or fracking, operations across South Texas.

“In some cases, it's like they were ghost towns until now,” Tunstall said.
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There is more.

Rail transport is still cheaper than trucking and one rail care can carry four truck loads.  This takes some of the pressure off the roads in the region, although the trucks are still needed to get the product to its final destination.  The railroads have been hiring people to meet the new demand.

It is an example of how the benefits of the Eagle Ford boom are spread beyond the fields where the rigs are located.  The anti energy left has tried to make the case that few jobs are created by increasing oil production.  They are just flat wrong.