EAU CLAIRE — Market demand and immediate rail access will determine whether sand mining companies will stay in business, a Wisconsin Department of Transportation official said Monday.
“You may see mines come and go,” said Tom Beekman, the DOT Northwest Region Systems planning chief. He was among the panelists at a forum sponsored by websites Wispolitics.com and Wisbusiness.com at Florian Gardens in Eau Claire.
“We’ve seen a dropoff in the number of permit applications,” Beekman said.
“There’s a lot of people applying for permits just to get it done,” he added, saying many of the large proposals have done nothing.
In Chippewa County, there are 11 active or proposed frac and industrial sand mining sites.
Beekman said throughout western Wisconsin there are 18 “active” sand processing plants.
Eau Claire Attorney John Behling said: “You do see a slowdown in some areas of mining.” Among the clients Behling represents is EOG Resources, which has two mines in Chippewa County and a sand processing plant in Chippewa Falls, which has been called the largest one in the country.
Many of the existing plants have immediate access to a railroad line, eliminating one trip shipping the sand. Behling said mining and shipping on site is a trend in the industry, so mining companies don’t have to worry about the cost of trucking or having to resurface roads because of truck traffic.
Beekman said indications are that, over the next five years, what he called a “reasonable” market demand for frac sand is between 40 and 60 million tons.
“The question is whether the market demand will be met by the players that are already running,” he said, adding the sand market is confined to North America.
“This will be the shakeout,” said state Rep. Chris Danou (D-Trempealeau). “I would be willing to bet it will be who has the rail access (that survives).”
The industry has had a fast rise, said Dennis Rasmussen, chairman of the Dunn County Board.
The first mine in Dunn County, Fairmont Minerals, started in 2007 and the county has since gotten a second mine.
“We know that sand mining will exist in Dunn County. It will always be a balance of competing interests,” Rasmussen said.
The county passed a moratorium on new sand mines in January so it could update its ordinances.
State Rep. Scott Suder (R-Abbotsford), the Assembly’s majority leader, said a moratorium should be a last resort for counties.
Suder said as long as environmental protections for air and water are in place and the market conditions are good, companies should be able to build more mines.
But he said decisions should be made on a local level, and the process should involve all the stakeholders, including the residents in the area.
Whether a mine is built should not be up to an un-elected bureaucrat, Suder said.
His 69th District currently includes Boyd and Stanley in eastern Chippewa County. That changes with redistricting when the village and city switch to the 68th Assembly District.