In April I was stuck in two massive traffic jams – one in Manhattan and one outside Pecos, Texas. In Manhattan, I was in the back of a Yellow Cab stuck on 5th Avenue, surrounded by hundreds of Yellow Cabs, each filled with customers. Outside Pecos, I was surrounded by what seemed like hundreds of 80,000 pound trucks, each filled with 100 mesh sand. Gridlock is gridlock, no matter the cargo.
I think the solution to both problems is the same: Fewer vehicles, not more.
Consider the following graph showing the number of truck loads of sand per day in the Permian Basin:
Sand Truck Loads Per Day In The Permian Basin
In 2016, 1600 truck loads of sand per day got the job done in the world of hydraulic fracturing. Rising oil prices, increasing sand loading, and longer laterals all worked together to create the need for 5400 truck loads per day in 2018. That’s a growth of a little over 3 times.
But the limiting factor in West Texas isn’t trucks, is it? The problem is roads. It is the same limiting factor on the island of Manhattan. You can get only a certain number of trucks (or taxis) down the roads and through the intersections per hour. This is a very real limit.
In both New York and in Odessa the complaint is the same: “I can’t get a sand truck/I can’t get a taxi.” And the solution until now has been the same: Get more taxis/get more sand trucks. But the solution, rather than fixing the problem, exacerbates the problem because the limiting factor is not cars, it is roads.
In the Permian back in 2016, a sand truck could make 4 round trips each shift and a truck could be used on two shifts per day. This means that 200-300 sand trucks were operating in the Permian Basin each day in 2016. They could fly down the road, unload, rocket back, fill up, head out.
In 2017, demand was heating up, and the industry responded by putting a lot more sand trucks on the road. Congestion started happening and, as a result, a driver could make only 3 round trips per shift. Now we needed 600-800 sand trucks on the road each day… up 3x even though sand shipments were up 2.5x.
In 2018, every truck driver and truck is on the road, traffic jams are everywhere, and the new round trip per shift number is approaching 2. Now we need 1400-1700 trucks on the road each day. Compared with 2016, we’ve got 7x more trucks hauling 3x more sand!
What if a sand truck could still make 4 round trips per shift instead of 2? We’d need only half the trucks.
Same with New York taxis. Cut the number of taxis and Ubers in half, eliminate traffic jams, and now a taxi can carry 5 unique passengers per hour rather than 2. The objective of a taxi is not to have the customer in the car, it is to deliver the customer to a destination… the pay is the same if that is accomplished in 5 minutes or one hour. The objective of the sand truck is not to have the sand in the truck, it is to deliver the sand to the wellsite.
Want to make it easier to catch a taxi in New York? Cut the number of taxis in half. Want to get more sand out to the wellsite? Cut the number of sand trucks in half.
This solution will, of course, never happen, but we certainly feel better for having proposed it.