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Wisconsin frac-sand mines sit dormant as competition grows

A truck dumps a load of silica sand Feb. 13, 2012, at Modern Transport Rail loading terminal in Winona, Minn. Minnesota is expected to release a draft set of model standards Friday to help communities struggling to regulate the boom in mining for silica sand, which oil and gas drillers use for hydraulic fracturing. (AP file photo by Andrew Link/The Winona Daily News)

A truck dumps a load of silica sand in February 2012 at Modern Transport Rail’s loading terminal in Winona, Minnesota. Sand minds in the Upper Midwest are struggling amid strong competition from rivals in Texas and Oklahoma. (AP file photo by Andrew Link/The Winona Daily News)

EAU CLAIRE, Wis. (AP) — Wisconsin’s frac-sand industry is grappling with several idled mines amid increased competition from rivals in Texas and Oklahoma.

Kent Syverson, a geology professor at the University of Wisconsin-Eau Claire, believes the region’s frac-sand development boom is over.

Parts of western and central Wisconsin saw heavy investment from 2011 to 2014, when sand mines, processing plants and rail-loading operations were being built at a rapid pace. Since then, Superior Silica Sands has idled three sand mines in Wisconsin, and Hi-Crush is halting production at its mine in Augusta.

Syverson told the Eau Claire Leader-Telegram that demand for sand remains strong, but energy companies have built mines closer to oilfields in Texas and Oklahoma. The production expansion has lowered prices and allowed oil drillers to purchase local sand for less than the cost of shipping it from Wisconsin, he said.

“The capital has already been invested in Wisconsin, so the real questions are how much of this sand will still be needed and how many of these higher-cost operations that are taken off line will never come back,” he said.

Syverson also argued that companies in the Permian Basin in West Texas and southeast New Mexico are moving toward finer grain sand. It’s lower quality but more plentiful than the northern white sand that can be mined in Wisconsin.

“Wisconsin sand is still the Cadillac of all sands, but these companies in the Permian Basin are saying they can make more money driving a Chevy than a Cadillac,” Syverson said. “It’s all a cost-benefit analysis.”

In the Upper Midwest, mines that can produce 18 million tons of frac sand a year have already been idled, said Ryan Carbrey of the Houston-based energy-research firm Rystad Energy.
Carbrey expects the number to increase to 30 million tons by the end of 2019.

The changes in the Permian Basin are important because the area accounts for half of the country’s shale-energy production, Carbrey added. But he said major shale -energy deposits in North Dakota and Pennsylvania still rely on northern white sand.

“In those regions, there’s not really much good local sand,” he said.

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