Vulnerable lizards could hamper Texas frac sand boom

Published: Saturday, 26 August 2017

Texas miners worried as growing sand interest threatens endangered lizard.

A small lizard threatens to be a large headache in the rush for Permian Basin frac sand development, US miner Smart Sand warned.

Speaking to investors in August, Smart Sand CEO Charles Young warned that mine development in Texas would be hampered by a number of issues, in particular the need to preserve the habitat of one contentious reptile - the dunes sagebrush lizard - whose presence in the region nearly derailed the Permian fracking boom altogether back in 2011.

"We believe Texas mine opportunities won’t come without its obstacles, including the following, access to wire, roads, electricity, trucking and labour and potential serious environmental issues and questions relating to the sagebrush lizard and its habitat," Young said.

"This is why we feel the capacity announcements and resulting investor sentiment has been overdone.

"We don’t believe it’s possible for all those capacity to come online at the levels nor in the timeframe currently being anticipated by the market," he said.

"Our estimate is at 15m to 20m short tons will come online over the next 12 to 18 months. That would not meet the demand in the Permian basin as currently foreseen."

Texas drilling boom spurs interest in regional sand

More than two-thirds of the cost of delivered frac sand from Wisconsin, the traditional heartland of sand production, to a Texas wellhead consists in freight cost.

With fracking activity surging in the Permian basin, many miners are turning their sights away from their existing facilities in Wisconsin, in favour of developing resources closer to the action.

"Like our peers, we’re evaluating the Permian mine opportunities," Young told investors. "We have two options in place [and] we’re working on a few more."

But he said that, in developing resources, the company had to be careful to avoid encroaching in the habitat of the dunes sagebrush lizard.

Texas land-owners have agreed to limit infrastructure development in certain areas, in order to preserve the habitat of the sagebrush lizard.

The small lizard, which is found in Texas and New Mexico, was considered for inclusion on the endangered species list back in 2011, a move which would have left frackers vulnerable to stringent federal conservation laws.

A deal was struck whereby the lizard was kept off the endangered list, after landowners agreed to the voluntary restrictions on development, meaning in basin fracsand mines must be careful to avoid intruding onto sagebrush lizard habitats.

If those standards are not kept to, there is a possibility that the dune sagebrush lizard will once again be considered for classification as endangered, a move which would hit many frackers and sand miners across the basin.