Mining Success

By Mike Nichols
April 2013 (Volume 22, No. 1)

Josh and Greg Clements grew up in Bloomer atop the seemingly bottomless troves of sand that everyone knew were underfoot but never gave a second thought.

“Played in it my whole life,” says 38-year-old Greg, sitting in a conference room beside the brand new, $50-million Superior Silica Sands processing plant he manages just outside Barron in northwestern Wisconsin. For as long as anyone can remember, it was just plain old sand, the same stuff kids shoveled into buckets in their sandboxes and farmers used as bedding for their cows.

“Anywhere up here, where there is a hill, there is sand in it,” says Josh, Greg’s 32-year-old brother and the manager of an only slightly older Superior Silica Sands plant in New Auburn, about 25 miles away.

It’s always been easy to take for granted. Little rounded beads of unusually hard quartz, Wisconsin silica sand is literally older than the hills. University of Wisconsin geologists surmise that, starting about 500 million years ago, gargantuan mounds of it were pushed and shaped by ancient seas that once covered the entire state.

Silica sandstone formations are really just “coalescing beaches” and offshore sandbars deposited on an uneven sea floor long, long ago, according to a 1971 paper by then-associate state geologist Meredith Ostrom. Often buried beneath a thin veneer of what the excavators call “overburden” — topsoil or subsoil composed of silt, loam or clay — it is easily reached. And, it turns out, it is perfect for use in hydrofracking — the process of pumping silica sand, water and small amounts of chemicals under extreme pressure into fissures in the earth, and propping the fissures open to help release so-called “tight” deposits of oil and natural gas.

People like Josh and Greg Clements have come to realize that the stuff they tromped around in as kids is now worth as much as $200 a ton in places like Ohio, North Dakota and Texas. Suddenly, the primordial bounty left by long-ago tides has metamorphosed into thousands of Wisconsin jobs, hundreds of millions of dollars in tax revenue and more than a billion dollars in state income in 2012 alone.
While Wisconsin remains mired in a long fight over an iron mine that could create 700 jobs, the sand industry has already directly produced three times that number — and with what proponents convincingly argue is relatively minimal environmental cost.

Indeed, while critics raise concerns about the impact of the frac sand industry on the air and water, and even raise the specter of cancer, proponents have repeatedly convinced local boards such fears are either overstated or downright false — and more than a little myopic. As old “ghost towns” slowly come back to life alongside rebuilt rails, there is increasing evidence that the sands — or, more accurately, the revolutionary hydrofracking they make possible — aren’t just helping the economy.

Hydrofracking may be helping the global environment as well.

Wisconsin silica sand has been used for hydrofracking for more than 40 years. However, it wasn’t until recently that technological advances in horizontal drilling and seismic imaging made it feasible to use the process to extract previously unreachable reserves of natural gas and oil.

Nowhere else in the world is frac sand both so abundant and so accessible as it is in Wisconsin. The state once known as America’s toolbox is now recognized as its sandbox.

And considering how long the Legislature debated even the possibility of approving a new iron mine, the emergence of an entire frac sand industry has been both astonishingly rapid and a testament to local decision-making.

So many frac sand mines and processing plants are suddenly operating in western Wisconsin that even the state Department of Natural Resources has a hard time keeping track of the exact number.

There are at least 40 active plants and 75 mines that have DNR permits, according to Thomas Woletz, a senior manager in the DNR’s Water Division. But an unknown number of older industrial sand-mining operations, which have long unearthed silica sand for mortar, concrete and glass, have also quietly started selling to the frac sand market. All told, there may be more than 100 mines supplying frac sand to much of North America.
“To put the growth in perspective,” wrote Woletz in an e-mail to Wisconsin Interest, “two and a half years ago we had five frac sand mines and five processing plants.”

The economic impact of hydrofracking is impressive. By 2012, the so-called unconventional oil and gas industry produced 19,760 jobs in Wisconsin — a number that will grow to more than 33,000 jobs by 2020, according to an IHS Global Insight study supported partly by the petroleum and natural gas industry.

About 2,000 of the existing jobs are in the frac sand business, according to Mohsen Bonakdarpour, an official with IHS. Other jobs are in the supply chain for the hydrofracking industry or are so-called “expenditure-induced” jobs made possible by the spending of people with new incomes. The increase in Wisconsin income hit $1.2 billion in 2012, according to IHS. In turn, the new wealth generated significant amounts of new government revenue: approximately $590 million in added personal and corporate taxes.

Though not without significant opposition.

No one can deny that the sand mines have an impact on the Wisconsin landscape beyond the appearance of the processing plants that dry and sift the sand.

“I have lived in the area for 37 years and moved here specifically because we love the hills,” says Nancy Weise, a resident of the Barron County Township of Dallas, where a mine was briefly considered. “So when we find out our neighbor is going to mine 160 acres away, it breaks our heart. It is essentially like strip mining.”

The mine Weise feared never came to fruition, but it prompted her to help found an opposition group named Hills Angels.

Weise concedes an essential argument in favor of letting the miners buy up property from farmers and others who need the money or just want to live a better life.

“The people who are for [the mines] say, ‘People own their own land, and they can do whatever they want with their land,’” says Weise. But, she adds, “I don’t think there is enough evidence to show the mines are safe for surrounding families. I think the impact of silica dust could be very much like asbestos.”

There is, to be sure, a need for oversight. Fifteen companies have been issued notices of violation of regulations, according to the DNR. Most appear to be relatively minor violations regarding storm water permits, although at least two have been referred to the Department of Justice.

The Wisconsin Center for Investigative Journalism recently reported that “nearly a fifth” of 70 active mines were cited for environmental violations in 2012, including a handful that resulted in fines and nine that did not involve fines because the violations “were largely either paperwork problems or other easily corrected issues” The WCIJ story also noted that Gov. Scott Walker proposed adding two new DNR positions in the budget to help monitor the sand industry.

Allen Ferber, who lives up a long driveway across Highway 8 from the Town of Clinton processing plant, has his own concerns. Ferber has lived in his home for decades and is upset with both Superior Silica and the local Town Board. He says the Town Board was supposed to have a moratorium in place, like some other communities do. He worries about air quality and the environment, and he complains that trains carrying the sand run late into the night.

“They lied through their teeth about so many things they don’t know which one they told first,” he says of the company and town officials.

Others see it quite differently.

Mining and processing plants, to be sure, bring train whistles and noisy trucks to long-quiet country roads, and more than one view of the bucolic countryside has been lost at least until the mines are closed and the land is restored to what might be a somewhat flatter tableau. But those same quiet roads have also long been a way out for rural and small-town Wisconsinites who can’t find jobs.

“All these little towns are almost ghost towns,” says Larry Peterson, a Town of Clinton supervisor. “People need jobs,” and the ones in the sand industry are good jobs that often pay more than $17 an hour plus benefits.

When Superior Silica held a job fair at Barron High School last summer, a local newspaper reported that more than 700 people showed up. The Superior Silica Sands processing plant has already created 27 jobs and is expected to add a lot more — and that’s just in the plant. Canadian National, which now prefers to be called CN, just sunk $35 million into rebuilding a local rail line that hadn’t seen a train for years. Local gas stations and restaurants are benefitting as well, and pretty soon, hopes Peterson, some of those well-paid Superior Sands workers might just start buying land and building houses.

Yes, there was talk of a mining moratorium at one point, says Peterson, but that was before the Town Board did its research and wrung economic concessions out of the company — including a promise to pay local homeowners for any loss in value that they might suffer over the next five years.

Even the staunchest proponents concede — given the amount of sand being processed — a need for stringent safeguards and monitoring. After all, the cavernous, 500-foot-long Superior Silica Sands plant that opened last fall outside Barron is capable of drying, sifting and shipping more than 2 million tons of sand per year all by itself.

But, they argue, those regulations and safeguards are in place partly because of the admonitions of members of local government boards who want to make sure their own families and neighbors are safe and protected.

The facility is essentially a wide-open, 500-foot-long warehouse of sorts with huge piles of sand at one end, an enormous “drier” in the middle and myriad sifting machines at the other. In addition, it has a computerized operations room and a quality control lab.

Among the safeguards for air quality: a 12-by-25-by-35-foot steel “bag house” with 784 air filters connected to the drier that heats and dries the sand, and another similar bag house connected to the plant’s dust collection system. Superior Silica employees stress that the air is tested and monitored regularly, just like groundwater near the mines themselves that the DNR keeps a close eye on.

Perhaps the most formidable critic of the facility was Midwest Environmental Advocates (MEA), which is based in Madison. In a five-page critique, the environmental group criticized everything from plans for monitoring or containment of emissions to potential impacts on health and quality of life. MEA argued that the DNR should have conducted either an environmental assessment or impact statement — both are lengthy, potentially costly analyses — to evaluate the impact of both the Town of Clinton facility and “cumulative impacts from other frac sand mines in the area.”

In essence, they and other critics complain that there needs to be more regulation, more deliberation and more assessment of negative impacts.

The DNR — an agency that lots of folks in rural Wisconsin say already stands for “Damn Near Russia” for its sometimes big-brotherish oversight — demurs in this case.

The agency has concluded that it is not necessary to regulate silica as a hazardous air pollutant, and that “very little conclusive information exists regarding sources, controls or levels of silica present in ambient air.” In its response to the environmental group regarding the Superior Silica plant, the agency also said that Superior Silica Sands is meeting all monitoring and emissions requirements and, under Wisconsin law, there is no need for an environmental assessment or impact statement, a response that in no way placates MEA.

The group’s attorney, Sarah Williams, said in an e-mail long after the processing plant opened that “many of our concerns still remain” and noted that there are at least 12 other frac sand mines or processing facilities in Barron County, “all of which contribute to air pollution.”

Superior Silica managers simply disagree.

“There is no danger,” says Duane Wilke, Superior Silica Sands’ environmental health and safety manager. Emissions “are well below the EPA standards. Nobody is going to get silicosis from these processing plants. I just can’t say enough about how safe it is.”
Critics, says Wilke, “are just not going to listen.”

To be sure, there is a committed opposition that will never be placated, and some hearken back to an age-old complaint that the people who profit most aren’t Wisconsinites; they’re outsiders like the Texas private equity company that owns Superior Silica.

But that is a simplistic argument that conveniently overlooks the good-paying jobs created for local people like Josh Clements. He was an electrician who helped build one of the Superior plants before he was hired to run it. And the outsiders-are-profiting argument also ignores the creation of local businesses like Midwest Frac, a mining company that processes its sand through the Superior Silica Sands plant in Barron.

Matt Torgerson, owner of Midwest Frac, employs up to 40 people in the Town of Arland. He cites the economic boost that mining provides other Barron County businesses, from electrical firms to sand-blasting companies. “You look at their sales ... and it has just been amazing,” he told the Barron County Board last November. Pointing to the county’s growing tax base, he said, “There are only positives that we see moving forward.”
For their part, local government leaders see the sand — and the rebuilt railroad — connecting them to the promise of a broader world. That closed rail line that CN bought from Wisconsin Central in 2001 now connects Barron County with the CN network leading to ports in New Orleans in the south, Vancouver to the west and Nova Scotia to the east — and, from there, to the rest of the globe.

Economic impacts of the larger hydrofracking industry, of course, extend well beyond Wisconsin, and the politicians have already positioned themselves to take credit. President Obama has promised to help create 600,000 natural-gas-related jobs in the next decade. Some commentators saw this as the president’s embrace of the industry as an economic driver as well as his acceptance of the argument that fracking can be done responsibly.

The benefits of dramatically cheaper natural gas, in fact, aren’t just economic. They’re also environmental.

The Environmental Protection Agency reported in February that emissions of greenhouse gases from U.S. power plants decreased 4.6 percent from 2010 to 2011. And U.S. energy-related carbon dioxide emissions in the first quarter of 2012 — during the high-demand winter months — were the lowest since 1992, a time when there were nearly 60 million fewer Americans using energy, according to the U.S. Energy Information Administration.
The reduction is due at least partly to the abundance of relatively clean natural gas and to utilities consequently burning far less coal.

David Victor, a professor at the University of California-San Diego and author of Global Warming Gridlock, estimates that the shift from coal to natural gas has reduced carbon dioxide emissions by 400 to 500 megatons per year — a “ballpark estimate” that he confirmed to Wisconsin Interest is twice the total reductions of the Kyoto Protocol throughout the rest of the world.

Victor believes that the jury is still out on whether the reduction in carbon emissions is enough to slow climate change, and he cautions that the United States needs to be vigilant about environmental impacts of fracking. But “if best practices are used, then fracking looks very safe,” the graduate of Harvard and the Massachusetts Institute of Technology wrote in an e-mail. He added that “questions surrounding methane leakage still need careful monitoring.”

Victor’s bottom line: Natural gas can be a bridge to a future with lower carbon emissions.

Such statements lend credence to the arguments of fracking proponents that the relatively low risks are worth taking given the potential rewards of energy self-sufficiency, economic growth and even cleaner air.

“As the [Obama] administration and EPA has made clear, natural gas has a central role to play in our energy future, and this important domestic fuel source has extensive economic, energy security and environmental benefits,” the EPA said in December.

Even some environmentalists, acknowledging the benefits of natural gas, have come out in support of fracking. In September, Mark Brownstein, the Environmental Defense Funds’ chief counsel, explained the group’s support for fracking of natural gas, when properly regulated, as a way to help America wean itself from coal.

“Natural gas production can never be made entirely safe; like any intensive industrial activity, it involves risks,” he wrote. “But having studied the issue closely, we are convinced that if tough rules, oversight and penalties for noncompliance are put in place, these risks become manageable.”

Local governing boards have largely welcomed the new industry. Not only did the Town of Clinton Board give Superior Silica Sands the green light, the Barron County Board voted overwhelmingly to approve the zoning change that made the plant possible as well.

In the end, they’ve decided that farmers have a right to get rich by selling their land, and the younger generation should at least have a shot at sticking around and getting a job — especially since health concerns are overstated.

This is sand, after all. Not nuclear waste.

“When your children were young, did you go get an old tire and fill it with sand for a sandbox? There’s no difference,” says Peterson. “Sand is sand.”

Sure, there are concerns about the risks that come with any big life-changing endeavor. But the critics, who bicker over minutia or don’t like the look of a processing facility or the sound of a train passing by at night, fail to see a larger picture, at least in the minds of the folks who sit on the all-important local boards.

In the end, the local boards are the ones with the power — so much so that people like Weise have come to realize the importance of who sits on them.

Local races in the towns of Vance Creek, Sumner and Dallas, where she lives, all focused on the frac sand issue in April, with mixed results. In Sumner, for instance, a town chair who voted against a mine proposal was re-elected — but so were incumbents on the other side. In Dallas, Weise herself ran and, like other mine opponents in the county in the past, lost.
Support for mining on the Barron County Board itself, meanwhile, remains almost unanimous. And overall, there remains strong sentiment at the local level that the area needs to do what it can to be part of an industry of the future.

Some warn that the natural gas boom has already played itself out. But there is substantial evidence to the contrary. There are enough recoverable natural gas resources in the continental United States and Canada to supply current rates of consumption for another 100 years, according to IHS, and plenty of reasons to use them.

“This plant will be here for 100 years, as long as they keep fracking,” says Josh Clements.
And after fracking runs its course? Maybe, some think, the engineers and scientists will discover another use for the common old silica sand that people around here still see as a cheap way to make their kids happy — now and down the albeit slightly noisier road.

Mike Nichols is a freelance writer and a senior fellow at the Wisconsin Policy Research Institute.