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A bird's eye view of the Downing Quarry. High quality frac sand can be seen in the lower center of the photo. The ridge on the left in the distance has been reclaimed per St. Croix County ordinance.

Frac sand: The magic mineral

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Frac sand: The magic mineral
New Richmond Wisconsin 127 South Knowles Avenue 54017

Rural Wisconsin is a mix of woods and water, farmscape and small towns -- a landscape that is central to why so many choose to live here.

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Frac sand mining is changing the face of this landscape physically, economically, politically and permanently.

You cannot have a discussion about frac sand mining without first talking about the increasingly important topic of home grown energy and, more specifically, the method of obtaining natural gas and oil from layers of shale found deep beneath the earth's crust known as hydraulic fracturing or "fracking."

Fracking has been around since the 1930s but did not become economically viable until the 1980s when the Energy Act of 1980 offered tax incentives for private research and development. That led to rapid improvements in the technology of horizontal drilling.

The process

Fracking involves the use of a drill pipe and bit to drill hundreds or thousands of feet through the aquifer (the underground water-bearing layer) into the layer of shale harboring the natural gas or oil.

After reaching the shale, fracturing fluid, consisting mostly of water and frac sand, is pumped under high pressure into the shale opening tiny fractures in the shale. Eventually oil and gas flow back into the well and to the surface.

The geologic shale rock formations that contain natural gas are called plays.

The five largest shale plays are Marcellus Shale located in Pennsylvania, Ohio, New York and West Virginia; Haynesville Shale located in parts of Louisiana, Texas and Arkansas; Fayetteville Shale located in Arkansas; Woodford Shale located in Oklahoma; and Barnett Shale located in Texas.

Meeting demand

Technology alone would not explain the exponential growth of hydraulic fracturing, but in conjunction with the steeply rising cost of crude oil and a patriotic appeal for energy independence, the timing for natural gas is now.

The following statistics illustrate the scope and money at stake in the "great shale gas rush," a rush that depends on sand -- the kind of sand abundantly available in Wisconsin.

According to the U.S. government's Energy Information Administration, the U.S. possesses 2,543 trillion cubic feet (Tcf) of potential natural gas resources. At the 2010 rate of U.S. consumption of natural gas, roughly 24.1 Tcf per year, that's enough gas to supply the U.S. for better than 100 years.

Also according to the EIA, gas from shale plays accounted for only 1 percent of the U.S. natural gas production in 2000. By 2035, they predict it will be closer to 50 percent.

In a February 2012 press release, Pricewaterhouse Coopers LLP reported there were 17 shale-related deals in the fourth quarter of 2011 with a total deal value of $57 billion. The total value of all shale deals in 2011 jumped 55 percent to $107 billion, up from $68.9 billion in 2010.

The industry is a major job producer, with an estimated 600,000 jobs supported nationwide in 2010. Experts predict job numbers will grow to 870,000 by 2015 and 1.6 million by 2035.

Sand rush

In a May 2012 article in Petroleum News, Ray Tyson reported U.S. frac sand production totaled 13 million tons with an average well requiring up to 5,000 tons of sand. Spears & Associates, an oilfield market research firm, estimated the demand for frac sand at 22 million tons for 2011.

Another report predicts the worldwide frac sand market will grow roughly 30 percent in 2012 to nearly 29 million tons.

Wisconsin's sand is so valuable to the frac industry because of its uniform shape, crystalline strength and easy accessibility. Silica sand, also known as frac sand, is nearly pure quartz making it very strong and clean. It contains few impurities making it easier to wash and sort.

Sand is the essential ingredient that makes fracing possible and it's what connects the "great shale gas rush" to small towns and communities throughout northwestern Wisconsin.

Silica sand was deposited along a swath that runs diagonally from Burnett County to Columbia County by the shallow seas that covered the area. The sand settled into two primary geologic formations.

Easy to find

The money associated with this magic mineral has proved intoxicating to landowners and small communities all over Wisconsin.

Years of erosion have left only a relatively thin veil of topsoil covering the sand, which makes up many of the picturesque hills and valleys so distinctive to central and northwestern Wisconsin. The ease of access to these deposits has made them highly desirable to mining companies in the business of providing frac sand.

Equally as desirable is the lack of zoning regulations in many of the counties and townships that are home to these prized deposits. This combination has resulted in an explosive increase in mining and processing operations around the state in the last couple of years, along with headlines and heated public debate over the merits and drawbacks of this opportunistic industry.

Dave Clausen, chairman of the Wisconsin Natural Resources Board says, "Not having frac sand mining is not an option. Frac sand mining will occur. The challenge for us is to see that it occurs in a way that minimizes the long-term effect on both the human population and the environment."

Mines

Wisconsin has about 60 mining operations, according to the Wisconsin Department of Natural Resources, and about 30 processing facilities that are operating or being constructed.

About 20 new mining operations are being proposed.

"The idea that Wisconsin is a direct part of the American gas and oil industry would have struck everybody as laughable a couple years ago," said Jim Laskin an involved citizen and owner of The Cafe in Glenwood City. "But that is exactly what we are. The economic interests that are pushing this represent huge money."

According to Alex Blackburn, zoning specialist for St. Croix County in charge of nonmetallic mining permits, the county currently has two mines mining frac sand, both in the Town of Springfield and both operated by Milestone Materials, a division of Mathy Construction Co.

The Downing Quarry amended its permit to include frac sand in 2011. The Downing site is unique because it spans two counties crossing the border into Dunn County.

A second site, the Wilson Quarry, is located south of the Downing site and east of the Town of Wilson. According to Blackburn, Milestone is currently in the process of amending this permit to allow them to mine below the ground water level. The permit was submitted Oct. 1 and is due for review by the BOA at its Nov. 29 meeting.

A third and controversial frac sand mine, Vista Sands, was previously proposed near Glenwood City.

"The mine was to be located between our farm and Glenwood City," Laskin said. "This would have been a mining and processing facility within 1,500 feet of a 650-person school and the nursing home. The Vista Sand representatives put on one medicine show after another like they were selling snake oil."

Had the mine gone through, Laskin claimed, the community would have been devastated.

"If we wake up and we've got mines on three sides of us, why are we here? You have to leave town," Laskin said. "I'm one of those people who can afford to leave. Some of my neighbors are not in such a position and heaven help them."

The Dunn County Planning, Resources and Development Committee eventually denied a request to accommodate a rail spur near Knapp.

As a result of the Dunn County outcome, Vista subsequently withdrew its application in St. Croix County for a 564-acre mining operation south of Glenwood City.

County prepared

The speed at which the frac sand scramble hit Wisconsin caught many counties and townships by surprise. With the exception of St. Croix and Marathon counties, the rest of Wisconsin was left to figure out on the fly how best to deal with a number of well-financed, out-of-state corporations pressing for quick decisions on zoning changes, conditional use permits and special exception permits.

According to Kevin Grabau, code administrator for St. Croix County, because this county experienced rapid development throughout the 1980s, elected officials had nonmetallic mining ordinances in place even before there were state requirements.

St. Croix adopted an initial nonmetallic mining ordinance in 1989, amending it most recently in July of 2007.

St. Croix County has one of the most restrictive nonmetallic mining ordinances in the state. Counties can be more restrictive regarding the operational activities, hours of operation, size and area of open mining and mining into groundwater.

St. Croix County also has a relative lack of the requisite sandstone formations compared to neighboring counties like Dunn and Pierce, making this county a less hospitable environment for sand mining interests.

One of the primary shortcomings of existing regulations, according to some residents and advocacy groups, is a failure to address the cumulative effects of mining on people, infrastructure and the environment.

"This is mining on a much larger scale than what the rules had anticipated," Clausen said. "Do we need something different (new rules) to look at this? I don't know, but it may be a possibility."

History

Wisconsin's been home to nonmetallic mining for more than 70 years. Tom Woletz, a senior manager and frac sand specialist with the Wisconsin DNR, said there are more than 2,500 nonmetallic mines in the state that includes everything from hard rock, gravel and river rock to sand mines.

"There are some big ones, but they averaged about 20 acres in size," he said. "And now, a lot of these new mines are coming in at 1,200 acres with mining plans that might be out 50 to 75 years."

Until frac sand became a hot commodity, Wisconsin's nonmetallic mines focused on mining gravel and sand for a variety of other purposes including glass making, foundry molding, road construction and abrasive applications. These mines tended to be small and located away from populated communities.

Although those mines generated dust, noise and truck traffic, they rarely approached the volume associated with the 24/7 operation of a frac sand mine.

Issues

There are a number of well-publicized issues associated with frac sand mining.

The repetitive nature of truck traffic can result in damage and excessive wear to local roads. Twenty-four-hour-a-day operations can mean light and noise pollution for people living close to the mine. If blasting is not regulated, annoyance is likely and damage is possible. Public safety concerns can result from the volume of truck traffic.

Frac sand consists of tiny particles of crystalline silica. In the process of mining, blasting, processing and transporting this sand, tiny crystalline silica particles of breathable size can be released in the form of dust into the air. If this dust is not captured by control devices, it is called fugitive dust. Workers who breathe the dust may be at risk for lung cancer and silicosis, in which scar tissue forms in the lungs, reducing their ability to absorb oxygen.

"What happens when you have silica dust from three or four mines or you have the effect on water quality from mining right down to the water table in multiple locations that are all right next to each other?" Laskin asked.

Woletz said there haven't been any issues with the air quality from a particulate standpoint, but there are no federal standards established for crystalline silica in the air either.

Processing frac sand is also a water-intensive operation in which sand is washed and often times converted to slurry. Communities need to address the amount of water used in relation to the health of the aquifer.

Some mines also operate below the level of groundwater, an issue that needs to be addressed in the permitting process either locally or by the DNR. Wastewater and storm water runoff must be addressed in the permitting and planning process as well.

The industry

Rich Budinger is the regional operations manager for Wisconsin Industrial Sand Co. owned by Fairmount Minerals, and president of the newly formed Wisconsin Industrial Sand Association.

Currently the association has four members; Fairmount Minerals headquartered in Ohio; U.S. Silica headquartered in Maryland; Badger Mining headquartered in Wisconsin; and Unimin headquartered in Connecticut.

According to Budinger, all members subscribe to a lengthy Code of Conduct. The first guiding principle of the code encourages members, "To lead in ethical ways that benefit society, the environment and the economy - People, Planet and Prosperity."

"Our goal is to promote a fact-based discussion and establish a gold standard within Wisconsin for safe and environmentally responsible mining operations that people can identify with when it comes to industrial sand mining," he said. "If we adhere to good operating policies, stewardship of a natural resource, prosperity will be a by-product of those initiatives."

Members pay between $5,000 and $15,000 in annual dues based on how much volume they are producing in Wisconsin. One of the services you are entitled to as a member is representation by Capitol Consultants, a lobbying firm located in Madison.

"Lack of information is one of the big problems within our industry right now," Budinger said. "People become fearful when it comes to industrial sand mining if they don't know the facts and it gets worse if they have misinformation."

The impact

The financial benefit of mines starts with the landowners. Companies have been known to pay millions for land and mineral rights.

At the community level, a new mine promises new jobs, tax revenue and more business for ancillary businesses in town.

According to the Wisconsin Economic Development Corp., the average processing plant will require an investment of between $20-$40 million dollars for equipment, buildings and infrastructure and up to $100 million for a processing facility that includes resin coating.

An average processing facility can create 50 to 80 new jobs and an average mine will create roughly 10 new jobs. Additional secondary jobs will be created by the need to transport sand.

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