St Croix River Road Ramblings

Welcome to River Road Ramblings.

Friday, June 29, 2012

Frac Sand Developments Update

Some interesting updates can be found at the Barron County News-Shield newspaper site on the frac sand issues, a real issue in the Barron County area.

Sand Pipeline in Barron County Proposed    From the Barron Newpaper we see how pit to railroad might be done by 6 foot diameter miles long pipeline rather than trucks on the road.

Arland sand mine (a few miles SW of the city of Barron WI) frac sand mine update.  This is adjacent to the cemetery where my local relatives are buried  Saw it when I decorated their graves in May.

Railroad Improvements to move frac sand across WI

Barron County board frac sand processing problems

Mine near Grantsburg on the St Croix River info   Nice story from the Star Tribune and other details about the mine leak at Grantsburg

Property Tax from Frac Mines

CHIPPEWA FALLS, Wisconsin (WQOW) -  Chippewa Falls is receiving a boost in revenue thanks to frac sand mining. The city recently found out it would receive twice as much tax revenue from the EOG Sand Plant.  The city had valued the property at about $35 million, but the state recently said the actual value is closer to $65 million. This means-- instead of collecting $700,000 in tax revenue they will receive approximately $1.4 million.
According to Minnesota Public Radio

 Wisconsin is home to more than 63 frac sand mines and 37 processing plants. The state is experiencing a boom in mining for sand used in hydraulic fracturing used in boosting production from natural gas and oil wells.

Talk to your state representatives and tell them to 
    -- set up some state wide rules for these mines
    -- figure how to get state and local mining taxes for the sand shipped to oil country.  The oil producing states get money from each barrel of oil produced and most of them have no state income tax as a result.  They need our sand to produce it, so we should share in the revenue too!
   Texas, like most oil producing states has an oil production tax of 4.6% of the market value of oil.  Frac sand has an estimated market value of $100 per ton, not too different from a barrel of oil which has fluctuated from 80-120 a barrel in 2012.  If we look at the Grantsburg frac sand mine, in which the company website estimates to produce 300,000 tons per year valued at $30,000,000, a 4.6% sand production tax would bring in $s1,380,000 million dollars in tax revenue.  It is estimated that there may be 100 mines in Wisconsin in operation by the end of 2012, of which the Grantsburg mine is certainly one of the smallest ones.  Mine number estimates from the  WI DNR FRAC sand mining paper

Taxing the 100 Wisconsin frac sand mine production per ton at the Texas oil production rate would bring in nearly 1/2 billion dollar if it were in effect in 2012.  The production seems to be increasing rapidly so this is a minimum level.  In addition, states add taxes for oil well inspection and regulation and other fees to return the cost.