Frac Sands 2014: The frack fight

By Kasia Patel
Published: Thursday, 02 October 2014

At IM’s 2nd Frac Sands Conference in Minneapolis there was no doubt that demand for frac sand is growing due to increased activity in the oil and gas industry. However, the question was how to manage this growth and how the industry can work together with those opposing increased frac sand mining and fracking for the good of local communities.

Delegates at IM’s 2nd Frac Sands Conference in Minneapolis last week were broadly excited about the growth in the silica (frac) sand industry, but this optimism was tempered with concern regarding activism and regulation, which many believe are holding back growth in the sector.

With demand for frac sand expected to grow threefold by 2019 owing to increased activity in hydraulic fracturing (fracking) activity, both those involved in the industry and protesters outside the conference stressed the importance of evaluating the costs and benefits of increased frac sand mining for the future.

Shale oil and gas is extracted by fracking, which involves pumping water and minerals like frac sand, barite (barytes) and bentonite into shale rock at high pressure. Increased activity in fracking would mean higher demand for these minerals.

Mark Kruminacher, Principal and senior vice president of GZA GeoEnvironmental – which provides environmental and construction consulting services – addressed the conference by discussing the economic benefits and the apparent negligible costs of frac sand mining to meet increasing demand.

“The number one concern that’s raised with any industrial sand mine, or indeed any non-metallic mine, is that the mine will decrease property values,” he said. “That’s always the number one issue – but you can’t find a study that backs this up and that’s quite simply because it doesn’t exist.”

Kruminacher argued that many of the reports used in arguments against frac sand mining cite studies on mining communities that are not comparable to the situations in Wisconsin or Minnesota.

“The reality is that the communities used in these studies are not relying on that mine – they are benefitting from it – but they are relatively small and campaigners are making the wrong comparisons and using intellectual dishonesty,” he said.

Kruminacher also expressed frustration that many anti frac sand mining lobbies accuse mining companies promising the benefits and jobs created by mining, without addressing the costs to the community or to the environment, while failing to address economic costs of not allowing mining to go ahead.

“The real cost is when some townships ban mining, and if the geology is the same across borders, then the opportunity goes elsewhere,” he explained.

“What you can quantify is the loss in the township that just banned it. There’s always also the risk of lawsuits where citizens then sue the government for making that decision.”

Another cost of delaying mining, Kruminacher said, is the demand for moratoria.

“By forcing a moratorium they force the community to study the issues, so they have to convene and bring in experts. But they have to pay them for their time to study the issue and conclude that mining is not a problem and then they lift the moratorium,” he argued.

Misguided moratoria?

Moratoria on fracking have also been imposed in various states around the country including in Minnesota, New York and Colorado.

However, while some bans on frac sand mining have since been lifted, many remain in place as various states study the health and environmental risks of mining and fracking.

Houston in south eastern Minnesota is one county that extended its moratorium on frac sand mining in February and it could now run until 5 March 2015.

In response, several industry bodies are now working on crystalline silica classification, and earlier this year, OSHA proposed updated crystalline silica safety standards aimed at reducing the risks of working in an environment where silica particles are present.

Inhalation of respirable crystalline silica particles can lead to the lung disease silicosis, and OSHA recommended a new permitted exposure level (PEL) for respirable crystalline silica as well as new provisions for measuring how much silica workers are exposed to.

Economic benefits

Among the benefits which Kruminacher claimed are ignored by anti-mining campaigners are the jobs created both directly and indirectly by the mining community.

According to a 2012 study by IHS Global Insights, funded by the petroleum industry, Wisconsin firms employed 20,000 people supporting the unconventional oil and gas business, which was expected to rise to more than 33,000 by the end of 2020.

However, only around 10% or 2,200 of those jobs, are directly tied to the fracking industry, with the rest accounting for spinoff jobs such as at restaurants and bars that have benefitted from increased sand-mine activity in local communities.

Other measurable benefits from increased frac sand mining include income taxes, property taxes and investment into plants and processing facilities, as well as additional investment into infrastructure.

“In Wisconsin there are 65 active mines and 45 active processing facilities – if you assume that 30 out of those have a wash plant and a dry plant, its reasonable to assume the cost of that would be around $50m to build,” Krumincher calculated.

“That’s $1.5bn spent on plants in Wisconsin in the last few years. That’s a huge economic impact and you won’t read this in the opponents’ analyses. They act as if it might boom then bust, then that’s a reason not to do it,” he added.

Not in my back yard

According to Krumincher, the opposition and alternatives proposed by the anti-frac sand mining campaigners boils down to one thing: NIMBYism.

“The bottom line basis is truly ‘not in my back yard’,” he explained. “There can be a lot of emotions, a lot of grassroots organisations against one mine and they claim all this save the world and you’re going to destroy the environment but if another mine is built five or 10 miles away, that group doesn’t necessarily go there because that’s not their back yard.”

He added that alternative industries proposed by groups have been a bigger focus on tourism – something that can be adversely impacted by sand mining activity.

“They say you’re going to destroy tourism, there’s going to be more trucks on the road, we don’t want that, we want tourism (...) They say they want the tourism but if somebody tries to open a business like that they can shut down just as hard,” Krumincher said.

Many campaigners are concerned regarding the implications of relying on shale gas as an energy source and one movement which is certainly more than a NIMBY response to fracking is that of Greenpeace, which is pushing for a shift to clean, renewable energy sources.

“According to international experts, we need to keep two-thirds of known fossil fuel in the ground to avoid ‘runaway climate change’ – the point at which global warming becomes irreversible,” the organisation said as part of its anti-fracking campaign.

“Rather than scraping the bottom of the fossil fuels barrel and building up costly infrastructure that will lock us into a high-carbon future for decades to come, we need strong government investment in clean, renewable energy,” it added.

Fracking concerns

Aside from concerns regarding the mining of frac sand, a major worry for locations considering fracking is additional water pressure and contamination of groundwater, which can occur through various pathways such as surface spills, well integrity failure – such as leaks or poor construction – the fracking process itself and natural geology faults.

As a result, New York’s highest court ruled in July that towns can use zoning ordinances to ban fracking, which enables towns to rule whether or not to frack in different parts of the state, as well as upholding the current state-wide moratorium on fracking.

Fracking policies have also been debated across Europe, with the environment agency in Germany recommending that that countrywide moratorium imposed in 2012 be maintained while its environmental risks are assessed.

The decision, which could limit the fracking process to rare cases rather than implementing a national policy, comes as a blow to business leaders in the country who have lobbied to lift the moratorium on fracking all together.

France has also imposed a moratorium on the process owing to environmental concerns.

Increasing dialogue