Frac sand boom creates thousands of jobs

Lukas Keapproth/WCIJ

From bottom right, a conveyor carries sand from the crushing area to a wash plant tower to be washed and sorted by grain size at the Preferred Sands plant in Blair, Wis., on June 20, 2012.

Opponents fear sand rush threatens rural qualify of life

Wisconsin’s Sand Rush

Interactive Map

View locations of sand deposits and frac sand mining and processing operations. Click the image below to open a larger version.

SIDEBARS: Sand economics

What makes a sand mine site profitable?

Several of Wisconsin’s sandstone formations produce marketable sand, but geologist Mark Zdunczyk explains why some sand costs more to mine than others. Read more here.
Sand pile

Future of frac sand unclear

What will the sand mining industry look like in Wisconsin in 30 years? Will the high demand for sand and rapid growth continue? Read more here.

A sand plant by the numbers

The EOG Resources sand processing facility is currently the largest sand plant in the nation. We break it down by the numbers here.

BLAIR — Moses Wengerd wears a safety vest as he sits below a giant flat screen, monitoring every phase of the sand processing operation. He can remotely adjust temperatures in the drying plant or slow the speed of sand sliding down conveyors to the rail-loading station.

For the past year, Wengerd has been working right down the road from his home at Preferred Sands. He used to be a construction contractor until the boom in sand mining hit west-central Wisconsin.

“I helped to build it (the plant) last year and now I’m running it,” Wengerd said, grinning.

Wengerd is one of 53 people working full time at Preferred Sands’ facility in Blair, a community of 1,300 midway between La Crosse and Eau Claire. According to the company’s regional manager, Todd Murchison, entry level wages range from $15 to $20 an hour. Preferred Sands also hires local contractors when possible.

“Mines always say, ‘We create jobs’ and we like to stick to that,” Murchison said.

Currently, there are no official employment numbers for the state’s rapidly expanding frac sand industry. But the Wisconsin Center for Investigative Journalism, using job-site estimates developed by the Wisconsin Economic Development Corporation, found that when existing mines and those being built are fully operating, the industry will employ about 2,780 people — a sizeable number given the state’s overall luckluster job picture.

LISTEN: Wisconsin Public Radio’s Rich Kremer, host of The West Side, interviews Center editor Dee J. Hall during an hour-long show on frac sand, Aug. 16, 2012.

Asked to comment on the Center’s estimate, WEDC spokesman Tom Thieding said the number appears reasonable, adding, “That’s a pretty significant number for growth from one sector.”

Across west-central Wisconsin, sand mine operators are promising jobs, taxes and new economic life for rural communities. With oil and gas drillers willing to pay nearly $200 a ton for Wisconsin’s sand, plenty of people — from private landowners to international energy corporations — expect to make serious money from sand mining.

Wisconsin is the nation’s largest producer of the round silica sand used in oil and gas wells to hold open fractures in the rock so that the fossil fuels can flow out. The natural gas drilling process that uses the sand, known as hydraulic fracturing, or fracking, faces growing scrutiny as lawmakers and regulators consider increased restrictions because of environmental concerns.

Fracking has been linked to or suspected of drinking water contamination in Wyoming, Pennsylvania and other locations. Minor earthquakes in Texas, Ohio and elsewhere also have been linked to the controversial process. There are no fracking operations in Wisconsin, but more regulations could make drilling less profitable and reduce the demand for Wisconsin’s sand.

Despite the recent rush for mining permits in Wisconsin — the Center found the number of permitted and proposed facilities has doubled to 106 in just the past year — sand is not instant money. It’s expensive to transport, and local officials are increasing costs in some areas by charging sand companies for wear and tear on local roads.

If mine growth continues as predicted, the state Department of Transportation estimates frac sand mines could generate nearly 20,000 truck trips a day to and from processing facilities. Those trucks are projected to fill more than 2,000 rail cars daily headed for drill sites outside of Wisconsin.

Moses Wengard monitors the processing operation at the Preferred Sands plant in Blair, Wis., on June 20, 2012.

Moses Wengard monitors the processing operation at the Preferred Sands plant in Blair, Wis., on June 20, 2012.

Not everyone is thrilled with the sand rush. Some residents are concerned that sand mining endangers air quality, uses too much water, generates noise, puts heavy trucks on small roads and threatens tourism. In some communities, opponents protest. In others, they have taken stronger action.

A Buffalo County resident is suing the Board of Adjustment for issuing what he alleges is an illegal mining permit that violates the county’s zoning code and current mining moratorium.

Opponents recently succeeded in blocking a permit for a frac sand processing plant next door to the Cochrane-Fountain City School, a grade K-12 school in Buffalo County.

And opposition to frac sand mining sparked a recall of a board member in the town of Sumner, in Barron County. Sumner board member Jim Crotteau topped a field of three candidates Tuesday with 135 votes. Coming in second was Ed Werts with 131 votes. Since neither got more than 50 percent of the vote, they are expected to square off in a final recall election Sept. 11.

Sand = jobs

A yard sign declares support for the sand mining industry in Mondovi, Wis. Several mines are in development in this small town in northern Buffalo County. June 14, 2012.

A yard sign declares support for the sand mining industry in Mondovi, Wis. Several mines are in development in this small town in northern Buffalo County. June 14, 2012.

In Chippewa County, the emerging industry already is being described as an economic success story. Mining companies hire local miners and local trucking firms to move the sand from mines to processing and loading facilities along the rail line, said Charlie Walker, president of the Chippewa County Economic Development Corporation.

“The biggest impact we’ve seen is the job creation,” Walker said. “There were 150 unemployed truck drivers in Chippewa County coming out of the great recession. Now, we have a shortage.”

In January, EOG Resources opened its sand plant, the largest in the nation, in Chippewa Falls. EOG employs about 70 people at its processing plant and 30 at the mine sites. The company also contracts with about 100 truck drivers, bringing the direct job total to about 200, Walker said.

In addition to creating jobs, sand mining operations contribute to the local tax base. According to Walker, last year EOG paid $1.4 million in property taxes to the city of Chippewa Falls.

Job creation and property taxes vary widely by facility size. The smallest active mine operates on 11 acres in Barron County. At small sites like this, a few workers with construction equipment can excavate the sand and then haul it off site to be processed.

On the other end of the scale, Badger Mining owns a 2,625-acre property in Jackson County where the company has produced sand for the oil and gas industry since 1979. Large companies, including Badger, invest millions to construct a fully integrated site with mining, processing and rail loading operations.

Preferred Sands' employees install a safety fence around the crushing area of the mine in Blair, WI, June 20, 2012.

Preferred Sands' employees install a safety fence around the crushing area of the mine in Blair, WI, June 20, 2012.

The U.S. Bureau of Labor Statistics tracks all industrial sand mines together because the production process is the same. Frac sand is included with mines that supply foundries and the glass-making industry. According to the BLS, Wisconsin had 276 jobs at eight facilities in 2008, the most recent year available. That’s up from 189 in 2002.

As of July 1, the Center found 86 mining, processing and rail loading facilities operating or in development in the state, plus an additional 20 in the proposal stage. WEDC estimates 10 jobs per frac sand mine and 50 to 80 jobs for every processing facility or combined operation.

Using the lower end estimates, these 86 facilities could employ 2,780 people, about 2,500 more than in 2008.

Investment ripple effects

When sand mining and processing come to a community, the economic impacts go beyond direct job creation.

In Marshfield, three new sand processing plants are expected to add 150 jobs and about $360,000 a year in tax revenue for the community, according to Marshfield city planner Jason Angell. To determine how the impact of these new businesses would reverberate throughout Wood County, the city hired an economic modeling firm.

That economic impact report showed that in 2013, as construction concludes and production begins, 100 direct jobs would be created in sand processing. The report projected that Wood County would gain 434 additional jobs, including 227 temporary construction jobs building the new facilities, 60 jobs mining and hauling sand and about 150 miscellaneous jobs in areas including health care, education, government and more.

“This is investment income that is new to the region. This brings external money into Wood County,” said Tim Nadreau, the economist who prepared the report. “Think about it on a household level. I’m a construction worker, and I get a new salary. I go buy groceries. The clerk at the grocery story goes and pays tuition. When I inject money in one sector, it has ripple effects.”

Opponents of frac sand mining argue that such economic analyses only consider the benefits of the growing industry, not the negatives.

Pilar Gerasimo, a journalist and anti-mining activist in Dunn County, worries about potential losses of tourism and residential development if the mining operations detract from the quiet and peaceful scenery that draw people to west-central Wisconsin.

“In 30 years when they leave, and they’ve devastated a quaint rural environment, how will that impact economic development?” Gerasimo said.

By road …

Another concern residents have is that heavy frac sand trucks will create traffic hazards and damage Wisconsin’s roads — costs that could be passed on to taxpayers.

Several counties, including Chippewa and Wood, have programs to shift the burden of road upgrades and maintenance to the frac sand companies, with differing success. In Chippewa, new businesses go through a traffic impact assessment (TIA) and pay the county up front for needed road improvements.

“We utilize the TIA for any traffic generating facility that comes in, be it a Walmart Supercenter or a frac sand mine,” said Bruce Stelzner, the Chippewa County highway commissioner.

Because frac sand trucks are tough on roads, Chippewa County also charges companies for exceptional maintenance, work that goes beyond what the public normally pays for, such as increased snow plowing or more frequent pavement repairs. According to Stelzner, the large mining companies quickly agreed to incorporate road improvements and maintenance into the cost of doing business, but some of the smaller mines were more resistant.

Covered semi-trucks carry sand from mines in Wisconsin to Winona, Minn. for processing and shipping along the Mississippi River, June 21, 2012.

Covered semi-trucks carry sand from mines in Wisconsin to Winona, Minn. for processing and shipping along the Mississippi River, June 21, 2012.

“EOG, Superior, Preferred — they’ve all been very good stewards of the public roads, recognizing the impacts that they have. They want to maintain safe highways for the county residents and for their truck drivers,” Stelzner said.

Wood County has a controversial fee-per-mile plan that calls for charging the frac sand processing companies located in Marshfield millions for transportation infrastructure upgrades. Different roads would have different fees, based on the condition of the roads — the more maintenance the road requires, the higher the fee.

Implementation of the fees has been delayed as the companies and the city of Marshfield challenge the right of the Wood County highway commissioner to impose it. While not commenting specifically on Wood County’s fee, Tom Beekman, the state Department of Transportation’s regional planning engineer for western Wisconsin, said local governments have the legal right to impose traffic impact fees as long as they apply equally to all businesses.

Said Marshfield Mayor Chris Meyer: “In a nutshell, I think it’s an unfair and illegal tax on just one industry.”

Increased truck traffic is a safety concern for many rural residents as well. In historically low-traffic areas, such as along Highway 88 in Buffalo County, several new sand mines could more than double the number of vehicles on the roads, Beekman said.

When communities are concerned about safety, the DOT uses computer modeling to project increases in vehicle traffic and recommends fixes to maintain safety, such as wider shoulders or reducing speed through bends.

“The truck drivers are not our concern,” Beekman said. “They are hiring professional fleet services with strict safety rules. These guys are going to be the safest drivers on the road.”

… and by rail

Sand mining also is generating additional rail traffic, adding jobs to that sector as well.

“Frac sand has become good business for rail,” Beekman said.

If mine growth continues as predicted, the DOT estimates that about 60 average-sized mines could produce enough sand to fill 2,250 train cars every day, or about 50 million tons of sand a year. That’s enough to fill the nation’s tallest building, formerly known as the Sears Tower, 21 times.

The frequency of rail cars blocking roads and noise from the increase in train traffic has led to public complaints. But the local operator Progressive Rail has added jobs and invested hundreds of thousands of dollars into rail line improvements to accommodate the sand industry in the Chippewa County area.

The frequency of rail cars blocking roads and noise from the increase in train traffic has led to public complaints. But the local operator Progressive Rail has added jobs and invested hundreds of thousands of dollars into rail line improvements to accommodate the sand industry in the Chippewa County area.

Demand for frac sand saved a rail line in Chippewa and Barron counties that was scheduled to be abandoned by Progressive Rail. Now, the railroad is increasing service and hiring more employees to meet the new demand.

The industry has grown so fast that some companies can’t buy enough covered rail cars needed to ship their finished frac sand. According to the Minnesota DOT, there are 30,000 covered cars on order across the industry.

“The railroads have been putting in huge capital investment,” Walker said. “It’s providing that infrastructure for other companies. It’s very beneficial.”

More train traffic also means busier rail crossings. In New Auburn, residents have been frustrated with long waits when trains block streets. Long-dormant crossings are busy again, creating a need for new signage and increased awareness.

“The mine-opposing people are looking to us as some higher authority to have a huge trump card, they are looking for a safety issue to stop a mine. The mining companies are looking for a blessing,” the DOT’s Beekman said.

“We just keep watching the middle line. People ask me, ‘Do you think frac sand mining is a good thing?’ That’s not our job.”

6 thoughts on “Frac sand boom creates thousands of jobs

  1. It is troubling that the author cites the Wisconsin Economic Development Corporation as if this were a credible source. A caveat should include the fact that the WEDC is a Walker created corporate entity. Cronyism is implicit in this creation. As has been noted in the past, there is often a financial insentive to pad the numbers. The Bureau of Labor Statistics is certainly a much more credible source but receives less attention as a credible source. I think the thing that those of use who live with this invasion and devastation would note – is that it seems to be a very common industry practice to “pad the numbers. In general, this industry scrupulously avoids long term numbers. Jobs = Sand is the industry advertizing slogan. It is the same slogan that is used with Mountain Top removal, Fracking and other destructive dirty energy efforts. It is Wisconsin’s best interest, nor even the U.S. to ignore the long term consequences.

  2. As regards the recall of politicians – another common practice of dirty energy is to move in quietly and corrupt our decision makers. It is hardly unusual for Zoning Board, County Board and Land Management officials to already be sold on silica mining – long before these decisions reach the public arena. It is the same practice as can be observed with the mining battle in the Penokees, Mountain Top removal and Fracking. Far too often corruption is the name of the game. I am surprised that we have not seen more recalls of local officials.
    Too often it seems like our government is for sale.

  3. This was a lopsided article. The sand mining industry is bringing some good paying but temporary jobs to Wisconsin. However, strip mining will leave scars on the land until whenever the next glaciers come through. Each acre of land strip mined will subsequently produce less crops or forest products for the next 15,000 years or so. The author should have weighed the value of hundreds of temporary jobs versus thousands of years of reduced agriculture and forestry production involving jobs too.

    Another oversight was not asking where the short time profits go. Most of these are probably out of state companies employing local help as available. The profit goes elsewhere. West Virginia has had a long history of out of state companies stripping off mountain tops and profit. The author should have explained how modeling western Wisconsin development after West Virginia’s is exemplary.

    What of local non-sand mining real estate market and real estate taxes? Are retirees still going to want to locate homes, thus adding to local tax revenue, near strip mines? Land taken out of production will erode local farm supply stores and sawmills’ profits… forever. Will tourists enjoy following sand trucks and be coming to hike past strip mines? What happens to local economies when the sand companies get what they want and leave. Clues can be found in West Virginia.

    This is almost an ecological joke. The DNR makes huge issues out of building a little farm pond but is AWOL when big money wants to build dozens of strip mines. There is a big fuss about mining ore in northern Wisconsin but the Sierra Club and all its friend in Madison choose to ignore this wider spread desolation.

  4. Finally there is the issue of water. These mines use a tremendous amount of water. If one does an overlay of the silica and Wisconsin’s auquifers – the result is astounding. Western Wisconsin’s silica laden bluffs and abundant wetlands are essential parts of our clean water supply. As the rain falls and soaks through the sand – it is filtered and cleaned. In the absence of sand and a lesser ability of the land to capture and filter rainfail – the region is expected to become drier. Lesser sand is also predicted to increase erosion rates.

    If one places this issue into the larger context of increasing temperatures and increasing population – it is troubling. However, far more troubling is energy procurement as a whole. According to Gasland we have 350 to 400 thousand fracking wells in the U.S. It takes 1 to 8 million gallons of water per fracked. If every well were fracked once for an average number of 4.5 million gallons – the usage would be almost 2,000,000,000,000 gallons. A portion of this water is never returned to the water cycle. Water scarcity is increasing globally.

    One might note that Walker has now formed another entity to help study and market water from the Great Lakes region. After all, the Lakes Region holds 90% of the U.S. fresh water supply. This issue far surpasses questionable local job creation. Corporations have kept trillions of dollars offshore instead of investing in America. It seems that the only real investment being made – involves a trade off of health and water supply. We can no longer afford to bury our heads in the sand.

  5. I passed one of these new mines near Chippewa Falls in July.

    I was stunned by how extensive and devastated the site was, especially when I saw nothing but farmland and woodlots when I passed last year.

    It was huge and horrifying. A desert of bare sand, created in just one year. I hate to think what 10 years will bring.

    Have people lost all common sense and perspective when it comes to “creating jobs?” Anyone looking at that site knows those jobs won’t last more than a few years. They can’t last. We won’t WANT them to last, given that rate of destruction.

    How can thousands of Wisconsin acres of permanent devastation and blight be worth just a few thousand temporary jobs?

    Why should 5,700,000+ Wisconsin residents, and millions of seasonal vacationers, make such a huge sacrifice for so little gain?

    Why should our great-grandchildren be cheated of enjoying Wisconsin’s natural beauty and productive farmland, and gain nothing at all?

  6. I agree with all the comments posted here. This article presents a facade of even-handedness through false equivalences. A few thousand jobs, sure, but at what cost? The things destroyed can never be replaced. In the not-too-distant future water will be more valuable than gasoline, and we will have given it all away.