Sand mining frenzy and controversy hits small Minnesota town where farmers can become ‘sand millionaires’
Mark J. Perry
Carpe Diem
September 30, 2012, 10:52 am
Last July, I wrote about how a new sand boom in Wisconsin and Minnesota (America’s “sandbox”) is creating prosperity, shovel-ready jobs, and “sand millionaires,” but is also generating lots of controversy and community resistance to “frac sand.”
The sand boom and controversy is now moving to the small town of Saint Charles in southeastern Minnesota, where according to today’s StarTribune “Local investors have floated a $55 million to $70 million proposal — as large as any in the country — to build an industrial processing plant and rail depot that would convert St. Charles into a regional hub for the nation’s burgeoning frac sand industry and open southeastern Minnesota to what could be a sand mining frenzy.”
Here’s an excerpt from the article “Small town ponders future as sand mining takes off“:
Wisconsin and Minnesota contain vast holdings of the world’s most sought-after frac sand — the spherical, high-strength Northern White Sand that oil and gas drilling companies use in the process known as hydro-fracking.
Both states have so-called “legacy” producers who have supplied the ancient quartz to energy companies for generations. The industry was bumping along quietly until just a few years ago, when hydraulic drilling activity exploded in a rush to extract domestic oil and natural gas from vast underground shale deposits in Pennsylvania, Texas, North Dakota and elsewhere.
Those operations have driven global demand for sand and other “proppants” from 6.5 million tons in 2009 to roughly 30 million tons this year. In that time, Wisconsin counties approved more than 75 new mines and related facilities, while the number in Minnesota remains at less fewer than 10, including a mine in Woodbury.
Some crude economics help explain the industry’s force.
For the average farmer in either state who happens to sit on high-grade sand close to a processing plant, payments of $1 to $3 per ton for excavated material can reasonably add up to $200,000 to $800,000 per year in extra income.
MP: That last paragraph helps put the economics of frac sand into perspective and shows what’s at stake economically for farmers and landowners in the Midwest. It also explains why there are now “sand millionaires” in Wisconsin and Minnesota, who have reaped significant financial benefits from frac sand as a direct result of the shale revolution that has brought energy-based prosperity and jobs to North Dakota, Pennsylvania and Texas in recent years.
If the movie “The Graduate” were filmed today, perhaps this would be the dialogue from the famous scene (ranked #42 in American Film Institute’s list of the top 100 movie quotations):
Mr. McGuire: I want to say one word to you. Just one word.
Benjamin: Yes, sir.
Mr. McGuire: Are you listening?
Benjamin: Yes, I am.
Mr. McGuire: Sand.
Benjamin: Exactly how do you mean?
Mr. McGuire: There’s a great future in sand. Think about it. Will you think about it?
aei-ideas.org |
