Winona County, MN, frac sand ban

Even with the recent lull in the regional frac sand market, Winona County, in Minnesota, recently adopted an ordinance that bans further development of industrial sand mining operations.

• Karen Zamora and Josephine Marcotty, "Winona County passes frac sand ban, first in the state to take such a stand," StarTribune, November 22, 2016. 

Frac sand mining has been a contentious issue in Winona for several years and the ban represents an assertion of local control. Members of the Land Stewardship Project (LSP), a Minnesota-based non-profit, had pushed for the ban since June of 2015. According to a statement by the LSP:

"The County Board passed the ban by a 3-2 vote in the form of an amendment to Winona County’s existing zoning ordinance. It prohibits any new operations for the production of industrial minerals, including the silica sand used in hydraulic fracturing."

The ban comes amid signs that frac sand mining may begin to intensify once again following a two-year downturn.

Sand Mines Reopening

Here's another report from last week on the expected rebound of demand for frac sand. According to the article, "Wisconsin frac sand producers say they are poised for another sand boom after an agonizing two-year lull." Some industry folk anticipate returning to 2014 production levels next year.

However, not all observers are so optimistic.

"Oil industry analytical firm IHS is a little more guarded in its predictions for the frac sand market in 2017. Managing Director Samir Nangia expects demand to grow by 15 percent per year. The most recent IHS ProppantIQ report states there are around 20 idled sand mines in the U.S., most of them in Wisconsin, accounting for 26 million tons of idled frac sand production capacity."

See the full article: Rich Kremer, "Wisconsin Frac Sand Producers Bullish About Market Rebound," WPR, December 1, 2016.

Signs of a come back?

Stock for frac sand companies appears to have risen in value following indications that OPEC intends to cut production, thereby triggering increased demand for U.S. fracking. Is this the dawn of a new phase of frac sand mining development in Wisconsin?

As one observer notes, "Frack sand could be a very interesting industry as we head into 2017 and beyond. Many of the advances in shale drilling in recent years -- drilling longer horizontal portions of wells, doing more fracking stages per linear foot of horizontal well, and using more sand per individual fracking stage -- all point to sand volumes growing at a pace much faster than overall drilling activity."

For the full discussion, see:

• Tyler Crowe, "Shares of Frack Sand Suppliers Explode After Today's OPEC Announcement," The Motley Fool, November 30, 2016.