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Frac Sand and the Rockdale, Sandow & Southern Railroad

The Rockdale, Sandow & Southern Railroad (RSS) has historically provided a variety of services to customers, including interplant switching, track maintenance, car inspections and cleaning and traffic coordination. The railroad is located in Sandow, Texas, which is on the southern edge of the East Texas Basin, the largest oil field in the United States outside Alaska. Importantly, Sandow happens to sit on the Basin’s Woodbine Formation, a hydrocarbon-rich area of sandstone, formed approximately 100 million years ago when East Texas was a shallow sea.

Historically, extricating the oil and gas from the sandstone in the Woodbine Formation proved difficult. However, over time, independent oil companies have perfected the art of horizontal drilling and hydraulic fracturing, or fracking as it is commonly known, enabling them to capture the oil and gas deposits that previously have been so difficult to access. This has resulted in an oil boom in the Sandow area, with industry experts anticipating that many million barrels of oil can ultimately be recovered from the Woodbine Formation.

After G&W teams assessed the hydraulic fracturing industry in the East Texas Basin, it was obvious to us that the market there needed more cost-effective ways to haul frac sand, a critical ingredient in fracking, to the drilling wells in the Woodbine area. It was also obvious that RSS was a viable solution to this problem because it could deliver the frac sand more efficiently and effectively than trucks, and it had the only railroad-owned and -operated terminal in the area.

In addition to choosing the right transloading partner, it became apparent that growing the RSS business would require an investment of approximately $250,000 to create a truck road adjacent to the track to allow transloading and to upgrade the track to accommodate the new business. From start to finish, the work was done in less than three months.

The return on that investment has been eimpressive. Once an underutilized asset, the upgraded RSS has increased its frac sand business fivefold. And there may be even more business growth on the horizon for RSS. There is the potential to haul other transload products associated with drilling for oil and gas, such as pipe. Another potential opportunity lies in developing the RSS terminal location into a unit train sand destination, filling a void that exists today.