Slackening demand for frac sand has some mines biding time

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Since the oil and gas industries turned up the demand for frac sand, the supply seems to have grown even faster. That means a silica sand mining boom in Minnesota is not taking shape -- although it may still happen down the road.

MPR pays a visit to a Winona County mine that has reverted to selling sand to local dairy farmers as animal bedding. The network reports that use commands a price of $3.25 per ton of sand -- a far cry from up to $200 a ton the oil industry has paid to use the sand in an extraction process known as hydraulic fracturing.

MPR reports regulatory uncertainties also seem to be a factor in holding back sand mine growth. Critics concerned about dust from the sand, noise, and truck traffic are asking an appeals court to order a more exhaustive environmental review of that Winona County mine. In addition, the Environmental Quality Board - under orders from the Legislature - is developing new regulations and should have a draft ready next month.

Alberta Oil Magazine reported recently that the skyrocketing demand for silica sand was quickly followed by a supply glut, as more companies jumped into the business and more mines opened. Alberta Oil says in the current price range, many Canadian oil operations will continue to haul in sand from western Wisconsin mines by rail because the St. Peter sandstone formation is considered to be a superior quality for fracking. But the magazine goes on to say that if the price structure shifts, there are sand sources in Canada that could be tapped.

A panel discussion in Mahtomedi recently looked at whether silica sand deposits in Washington County might make that area ripe for mining. One geologist told the Star Tribune it's not likely that those deposits would justify the regulatory hurdles companies would have to clear to mine them.

MinnPost reports DNR Commissioner Tom Landwehr said three factors will determine whether that sand is mined: the demand for the sand, how accessible it is geologically, and state regulations governing the mining.

Back in Winona County, one of the owners of the mine MPR visited says he and his partner are waiting to recover what they've invested in their operation. Tom Rowecamp tells the network "I'm waiting for that big oil guy to show up. But he hasn't yet."

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