Supply and demand, rail availability key to sand companies fortunes

2012-10-23T09:00:00Z 2012-10-23T10:51:28Z Supply and demand, rail availability key to sand companies fortunesBy ROD STETZER | Chippewa Herald
October 23, 2012 9:00 am  • 

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 and 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.

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(4) Comments

  1. Interested Party
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    Interested Party - October 23, 2012 4:29 pm
    Sand companies in Chippewa county agreed to pay for upkeep on roads they damaged because while the roads were built for milk haulers and the usual heavy loads they weren't built to handle the constant pounding of heavy trucks hauling sand. The companies have already paid Chippewa county millions; they themselves recognize they're damaging the roads. This is an exceptional situation and is very justified.
  2. duke of earl
    Report Abuse
    duke of earl - October 23, 2012 2:35 pm
    How much tax dollars , state and federal are taken from a gallon of gas or diesel. I always thought that that tax was for fixing the roads???? Is this another deal of the government robbing from peter to pay paul.

    I think a long time ago I had heard that when taxes got to be 50% We would have a revolution. I think that it is in the 40's at the present time.
  3. I Love Chippewa
    Report Abuse
    I Love Chippewa - October 23, 2012 1:48 pm
    If you support taxing sand haulers then be prepared to tax everyone who drives. Milk haulers, trucking companies, farmers, construction equipment, everyone and anyone who drives will have to be taxed that way to make it fair. My guess is that this is the plan for the future to pay for new roads. Everyone will be taxed on the amount they drive.
  4. Interested Party
    Report Abuse
    Interested Party - October 23, 2012 11:03 am
    Suder says he believes decisions should be made on a local level but when Wood County wanted to tax the sand haulers for repairing the roads they were tearing up both he and Terry Moulton interceded on behalf of the mining companies in opposition to the road fees. Something's not quite right here.
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