Economics

The economic impacts of frac-sand mining entail both positive and negative dimensions, raising complicated questions for citizens and decision-makers concerned about public well-being and planning for long-term, sustainable development. The discussion about economic impacts is further clouded by the lack of independent, reliable data on non-metallic mining in this part of the country. Assessing economic impacts is very complex, and the impacts will vary from context to context depending on numerous factors. The discussion is further hampered by passionate but narrow claims about "job creation," claims which often entail inflated promises of jobs and economic growth.

Below are some resources which address the economics of frac-sand mining in Wisconsin and Minnesota. Some research publications addressing the wider socio-economic dimensions of mining, hydrofracking, and energy production are listed in the bibliographies section of this blog.

As with anything, it's important to evaluate the sources of information. Many economic reports are commissioned by industry groups or by organizations that advocate particular social and political agendas. Promoting a mission or set of principles is not inherently suspect, but we need to be especially careful to evaluate the conclusions drawn by paid consultants. Who paid for the research and why? Who or what interests are represented by the organization that paid for the research? Does the organization represent the public interest? Or does it promote the interests of private, for-profit companies? Such questions are important to ask when looking at an economic impact report.

UW-Extension Fact Sheets on the Economics of Frac Sand Mining 
*These papers have been prepared by UW-Extension to aid decision-makers in understanding the social and economic impacts of mining operations. 
  • Economic Multipliers - Do economic benefits associated with mining have a ripple effect throughout the local economy? Under what circumstances does money "escape" or "leak" out of the economy? 
  • Stability of Mining as an Industry - Economic activity generated around natural resource extraction is notoriously unstable. How does this relate to frac sand mining and long-term economic development?
  • Who takes the jobs? - Where do the employees for added jobs come from? Is there an adequate labor pool? Will workers commute from other locations to the frac sand operation? Will they relocate and live near the operation? How does this affect the ability of a local economy to capture and retain economic benefits? 
  • What does the research indicate? - What does existing research on the impacts of mining on local communities tell us? 
UW-Extension Papers 
*These papers are independent but not peer-reviewed. 
Commissioned Economic Impact Reports
*These papers have been prepared by paid consultants. 
  • EMSI. The Economic Impact of Frac Sand Mining: A Look at Jobs and Earnings in Wood County, Wisconsin. Economic Modeling Specialists, Inc. 
    • No date is indicated on this report, though I believe it was produced in 2011. The authors acknowledge funding from CENTERGY, Inc., an economic development corporation representing central Wisconsin. The report is posted, among other places, on the website of the Heartland Institute, a think-tank that promotes free-market or anti-regulation policy approaches that are very favorable to the oil and gas industry. 
  • Parker, Dominic and Daniel Phaneuf. 2013 (May). The Potential Impacts of Frac Sand Transport and Mining on Tourism and Property Values in Lake Pepin Communities. Department of Agricultural and Applied Economics, University of Wisconsin-Madison. 
    • The authors of this report were retained by Lake Pepin Partners in Preservation (LPPP), a non-profit organization that helped prepare and promote a Preservation Zoning Ordinance that bans frac sand operations in Pepin County in and near the communities of Stockholm and Pepin along Highway 35, also known as the Great River Road, a National Scenic Byway. The Pepin County Board approved the ban in June of 2013. This report is posted, among other places, on the SandPoint Times, a website managed by the Houston County Protectors, which opposes frac-sand mining. 
  • Power, Thomas Michael and Donovan S. Power. 2013 (May). The Economic Benefits and Costs of Frac-Sand Mining in West Central Wisconsin. Power Consulting, Inc. 
    • This report is the first of a series of studies to be conducted by Power Consulting, Inc., commissioned by the WI Farmers Union, the WI Towns Association, and the Institute for Agriculture and Trade Policy. This report has been embraced by mining opponents and dismissed by industry
News Reports
2014
2013
2012
Business or Industry News

To generate support for their operations, frac sand companies have distributed t-shirts.
Photo by the Wisconsin Center for Investigative Journalism,
June 14, 2012, Buffalo County Board Meeting.



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