A small lizard threatens to be a large headache in the rush
for Permian Basin frac sand development, US miner Smart Sand
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
"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
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
But he said that, in developing resources, the company had
to be careful to avoid encroaching in the habitat of the dunes
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
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.