August 11, 2017
The current frac sand boom in west Texas could be a problem for Wisconsin mines, as 11 new sand mining operations are being developed in Texas near some of the busiest oil fields in the United States, Wisconsin Public Radio reports. Some estimates indicate that the new Texas mines could produce 45 million tons of sand per year and transport it at a much lower cost than sand coming from Wisconsin.
“The bad news is that the supply closer to Texas obviously takes away market share from the guys who have to rail it and then transload it, etc.,” Samir Nangia, a Houston-based oil field services analyst, tells the news agency, adding that the surge of southern sand will impact Wisconsin. “It’s very hard for a Wisconsin mine to compete with a mine here.”
Wisconsin mines have been busy because the demand for frac sand is greater than the supply. Wisconsin frac sand is exceptionally round and hard, which makes it better at unlocking oil from deeper deposits of rock.
However, Nangia says some energy companies have been getting increased production using larger volumes of the cheaper Texas sand. “Some of the people will be willing to accept some of this lower-quality sand. So, it’s definitely going to displace the Wisconsin sand, but the impacts of that will not be felt until 2018, 2019,” Nangia tells the news agency.
Kent Syverson, chair of the University of Wisconsin-Eau Claire’s geology department and consultant for the frac sand industry, calls the investments in Texas a seismic shift in infrastructure development, but says there will likely be challenges on the ground with that much growth. “Probably the greatest challenge would be the trucking logistics, because many of these mines are highly clustered, and they would be feeding the same or similar roads to kind of get the sand out to the mines, and then when they go to these fracking sites, they will be kind of funneled into similar roadways as well,” Syverson says, according to the news agency.