Wisconsin's 'sand rush' may be slowing – a bit
8/5/2013

Demand for so-called frac sand used mainly to extract natural gas has leveled off – at least temporarily – but permit applications for new, open-pit mines in western Wisconsin continue to roll in, says Deb Dix, the new state DNR liaison to the industry.

"Just because companies have permits doesn't mean they will open mines," said Dix, who has worked for the DNR for nearly a quarter century in various posts. "But it does mean they'll be ready."

However, if permit applications do slow down, that would give the DNR a chance to catch up on work that's built up after frac sand mining exploded.

In 2010, she said, the state had only five frac sand mines and five processing plants. Since then, the number has increased more than tenfold, with western Wisconsin now home to more than 120 mines and processing facilities.

That demand has slackened this year, according to industry representatives and reports from government agencies. A recent Associated Press story said some of the newly permitted mines in western Wisconsin and eastern Minnesota are idle and some facilities are stockpiling sand because supply is exceeding demand for now.

But that may not last. The Freedonia Group, a market research organization, forecasts that the annual demand for silica sand will increase by at least 4.8 percent every year at least until 2016.

Dix said the number of frac sand mines in the state could be even higher than 120. Citing the West Central Regional Planning Commission, she said statistics from June show the region has approximately 100 mines, 65 processing operations and 35 shipping locations that are either operating, in the permitting process or have applied for permits.

No exact figures are available, she said, because mine operators go through local municipalities first before the numbers are reported to regional and state officials.

While Wisconsin doesn't do oil or gas extraction, Dix said the state's silica sand is used in other parts of the continent with the technology called hydraulic fracturing, used to extract oil and gas from areas that were formerly inaccessible.

"That has increased the need for the particular grades of sand that we have available," she said. "We have high-quality deposits, and they are more easily accessible than some other areas. That's a result of the state's geology."

Dix said the so-called "sand rush" has meant some problems.

The biggest issues come from silica dust, stormwater runoff, groundwater extraction, chemical use, habitat destruction that hurts endangered species, noise, traffic and blasting. Environmentalists and people who live near the mines are also concerned about how the areas will be reclaimed or restored when the mines are shuttered.

She said different divisions in the DNR regulate separate different parts of the mining.

"Each program has a different review process in place for when permits are submitted so it will vary a bit from program to program when we are dealing with stormwater permits, wetlands, groundwater withdrawal or high-capacity wells.

"Each program has its own process, but each of them have criteria that they look at and follow, covering things such as environmental impacts, endangered resources and what needs to be done to protect those. All of that is taken into consideration prior to any permit approval."

But she said the size of a proposed mine doesn't trigger a more in-depth analysis before a permit is issued.

"Size isn't a factor," she said. "All of those things will be taken into consideration no matter what size. Of course if it is in proximity to a trout stream ... there is more specific criteria that they have to meet so we will probably look at it a little more in depth if those types of things are there. Or endangered species. We have to make sure it will be protective of those species."

Though critics have demanded tougher regulations for frac sand mines, Dix said no additional legislation is needed.

"We feel that we currently have the tools available ... but this could change in the future as the industry evolves and as further studies get completed," she said. "There is still work being done looking at the industry."

Though she didn't have numbers for total actions against frac sand mines, she said she has been involved with several high-profile cases in which operators were prosecuted for violations.

Dix also said she believes the DNR has enough staff to handle the frac sand mine boom. In the recent budget, two staff positions were funded, though critics said 10 were needed – mostly in the air pollution management program.

She said the workload has been absorbed into current positions.

"We already had the staff to do the permits," she said. "It's a self-funding program, so the rest of that has been absorbed within current staffing. It was also specific to the air management program."

She said the DNR has no plans to regulate silica dust separately as a hazardous air pollutant because it's a component of particulate matter that the DNR already regulates and monitors. She said the DNR requires mine operators to control dust at mines and processing plants.

She said companies are supposed to continuously water roadways to keep dust down and use spray bars where fine dust is coming out of the drying operations.

To mitigate and evaluate the cumulative effects of groundwater withdrawals in areas with high concentrations of frac sand mines, she said operators are required to report their use. Restrictions can also be imposed on operators' water withdrawals.

"High-capacity well applications take into consideration surrounding resources including geological formations in which the waters will be withdrawn, the location of other wells, surface water and things like that," she said.

"If there are areas where we have higher concerns, we have the ability to request that that information be submitted on a more frequent basis and we can require that they put in monitoring programs to continuously monitor the water level of the area," she said.

"We would have the ability to limit their flows and in some cases ... that is already happening. In the permit, they may have a specific requirement that they can only pump X amount within a specific time frame. And they must stay within those requirements."

Dix said Wisconsin's frac sand industry grew so fast over the past few years that even though regulations were in place, it was hard to keep up.

"Because of that, we ended up with issues we wouldn't normally see," she said.

"And those issues resulted in violations of things like large areas of surface being cleared and opened so that sediment moved more easily off the site. We saw things like failing to install proper equipment prior to startup, installation of different equipment than what they proposed (which) negates the criteria that the permit was issued on. Some of those things occurred because of the speed of growth, not necessarily because of the industry itself."

Dix also acknowledged that the public, in some cases, has been upset because the DNR is usually required to refer violations to the state Department of Justice and that prosecutions can take a long time.

"It can be a drawn-out process," she said. "And it often results in frustration because folks don't have the ability to see an immediate response. So it's not like in most cases we can go out and write a $5,000 citation to a facility. We just don't have that type of enforcement authority. We don't have it with any of the facilities.

"But we do have some limited citation authority for things like stormwater and we have used those. In those cases, we've seen pretty quick corrective action by the facilities. Even though it's not readily visible to the public, folks can be assured that we do have companies that are being referred to and going through the process at the DOJ, it just doesn't happen quickly."

Dix also said runoff from frac sand mines has damaged habitat and killed fish.

She said the DNR's endangered resources staff is involved with the industry to review potential danger to specific threatened species, such as the Karner Blue Butterfly.

And while it is the counties that oversee reclamation of mines, she said the DNR provides oversight to make sure local municipalities are following state law.

In the past, she said open pit mines have returned back to ponds or lakes and had developments built around them.

"Some are back to prairies and I've heard that some of them where the hillsides are being reduced are being returned to farm fields. They will have a lesser grade than what they previously had to make farming a little easier in those areas."

Dix said she believes most mining companies want to follow the law.

"I think in the long run, yes, they do.," she said.

"There is a lot of competition and everyone is trying to do everything quickly… but it's not always falling into place correctly."

-- By Brian E. Clark

For WisBusiness.com




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