ECONOMIC IMPACTS OF INDUSTRIAL SAND MINING IN WISCONSIN

Silica sand mining has grown exponentially in the Upper Midwest in response to demand for high-quality quartz sands for hydraulic fracturing. In Wisconsin, the rapid growth of industrial sand mining has prompted several efforts to assess the economic impact of sand mining in the state, each with its own strengths and weaknesses. This presentation will evaluate the merits of these different studies and discuss the economic costs and benefits of industrial sand mining in the state.

Frac sand mining has resulted in significant gains in regional economic activity and employment in the industrial sand mining industry. Data from the federal Bureau of Labor Statistics (BLS) indicate industrial sand mining employed 189 people in Wisconsin in 2002. The Wisconsin Economic Development Corporation estimates this number will grow to 2,780 once existing and proposed mines become fully operational, representing nearly a fifteen-fold increase in employment within the industry.

Countywide reports, such as those conducted by Wood County, seek to quantify the economic impact of sand mining by projecting additional jobs numbers, payrolls, and additional tax revenue for county and local governments. Such reports have been criticized for examining only the benefits of industrial sand mining on local communities without assessing potential costs.

Other reports suggest industrial sand mining will have a minimal impact on regional employment; contend land-based economic activities are not the primary basis for local economic vitality in rural Wisconsin communities; and point to the “boom-bust cycle” experienced in mining-dependent communities across the nation as evidence industrial sand mining could be detrimental to the long-term growth of local economies by dissuading other investments in mining communities.

Although industrial sand production is unlikely to be a large contributor to the overall statewide employment numbers in Wisconsin, jobs in this sector tend to have higher-than-average compensation plans that may serve as a valuable source of economic diversity in an area of the state heavily dependent upon agriculture.