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Building a Frac Sand Economic Assessment



Economic factors are important to consider when planning or advocating for a community or region's future. Unfortunately, there is often a false dichotomy presented by industries about the environment versus the economy, and there is frequently the problematic assertion that an industry is always good for an economy. This sort of framing facilitates incomplete assessments of an industry's economic impact, often inflating the local economic benefits and dismissing the economic and cultural benefits of a healthy environment.

Resources about Frac Sand Economics

There are a number of people investigating and analyzing the economic impacts of the frac sand industry, who have published valuable resources on the topic. These articles, reports, and papers can be beneficial to people in Wisconsin who are involved with assessing or advocating about the frac sand industry, and people in other areas of the country who are facing extractive industries.

If you know of other relevant resources, please edit this wiki to add them!

Power, TM and Power, DS. 2013. The Economic Benefits and Costs of Frac-Sand Mining in West Central Wisconsin: Phase I of Study -- General Economic and Community Overview. Institute for Agriculture and Trade Policy: https://www.iatp.org/documents/the-economic-benefits-and-costs-of-frac-sand-mining-in-west-central-wisconsin

This report looks at a variety of economic factors in the frac sand industry and other mining activities in Wisconsin and has highlighted several key points, including:

  • Historically, economic depression often follows stretches of mining operations in WI

  • The frac sand industry and other mining industries usually leak out of the local economy, exacerbating the differences between who benefits from and who bears the burdens of an extractive industry.

  • Overall, the likely general impact on Wisconsin’s economy will be modest, but there will be effects of the boom-and-bust cycle locally.

In addition to these points and others highlighted throughout the report, Power and Power list important questions to ponder and ask of town and county authorities prior to allowing new or expanded frac sand mining in an area. These excellent questions can be found on pages 5 and 6 (or 52 and 53) of the report.

Deller, SC and Schreiber, A. 2012. Frac Sand Mining and Community Economic Development. UW-Madison Dept of Agriculture & Applied Economics: http://www.aae.wisc.edu/pubs/sps/pdf/stpap565.pdf.

This paper conducts an interesting assessment of economic indicators and community wellbeing indicators in mining areas. The paper warns that it is difficult to generalize impacts on a local level, as variables such as local or non-local mine ownership can significantly influence the mine’s local economic impacts. However, the authors found that active mining communities are often associated with lower levels of poverty, but also lower levels of community health and wellbeing. The authors also note that mining communities tend to have more negative impacts after the mines close than the positive economic impacts of the mines while they were in operation.

Haines, A et al. 2012. UW-Extension Buffalo County. http://buffalo.uwex.edu/land-owner-network/economic-stability-of-mining-fact-sheet/.

These are a series of fact sheets and guides for planning for and dealing with the frac sand industry in a local community.

Orr, I. 2016. Economic impacts on industrial silica sand (frac sand) mining. Pattison Sand Company blog: http://www.pattisonsand.com/v2newsviews/blogs/clayton-zoning-updates/57/economic-impacts-of-industrial-silica-sand-frac-sand-mining.

This blog has a more narrow economic analysis, and concludes that frac sand mining provides new, high-paying jobs. It is worthwhile to note that the author of the blog is a researcher at a conservative think tank, the Heartland Institute.

Compiling questions to build on economic assessment resources

The resources listed above, and references within them, provide excellent information and factors to consider in traditional and more comprehensive economic impact analyses. Most of the resources listed do not include data from the last five years, in which the frac sand industry has fluctuated substantially, and it may be important to update those findings.

Would it be possible to use the steering questions provided in the Power and Power report and the Deller and Schreiber paper to focus efforts for building more current analyses?

Would it be possible to collaboratively locate and compile data, and conduct a grassroots economic impact analysis of this industry?

Here is a list of questions started by community members in Chippewa, Dunn, and Jackson counties. Several other questions are included in the resources listed above that could be added to this list. What are other questions you have that would help build an economic assessment? Please edit this wiki to add them to the list!

Questions

  1. How many new local jobs are created versus personnel brought in from elsewhere?

  2. How long are the jobs expected to last?

  3. What is the average pay and pay range for jobs associated with the industry?

  4. Do these jobs build skills that can transfer to other industries?

  5. What would be the lost tourism revenue?

  6. What would be the lost agricultural production land (would it be large, or minimal since mostly hills?)

  7. What are the costs associated with erosion?

  8. What is the influence on fisheries and other river-related industries?

  9. What are anticipated reclamation costs?

  10. What are potential health insurance costs?

  11. What are the costs associated with lower property values, both for towns and individuals?

Finding data to answer questions

What are some sources for finding the data that would allow us to answer the questions above? What approaches would be useful to locate or create and analyze the necessary data? Please add ideas here!

For tourism data it may be possible to obtain relevant data from each state's Department of Tourism. The Wisconsin Department of Tourism has an open records requirement (as most states do), and the process for obtaining them is briefly described here: https://www.travelwisconsin.com/terms-of-use#openRecordsNotice. It is unlikely that specific increases or decreases in tourism revenue in any given county would be directly ascribed to frac sand mining, but correlations between mining activity and tourism revenue trends might be able to be elucidated.


wisconsin frac-sand

parent:frac-sand-advocacy-leverage-points