Economic Impacts of Industrial Silica Sand (Frac Sand) Mining

Published June 1, 2015

Second in a series

#137 (May 2015) Environmental Impacs of Industrial Silica Sand (Frac Sand) Mining

Hydraulic fracturing for oil and natural gas production has dramatically increased the demand for industrial silica sand, known as “frac sand,” available in great abundance in the Upper Midwest. As new sand mines and processing facilities are proposed, the policymakers and citizens of counties with frac sand resources are being asked to evaluate the potential economic benefits and costs of industrial sand mining.

In this Policy Study, the second in a series addressing frac sand mining topics, Heartland Institute Research Fellow Isaac Orr and geologist Mark Krumenacher address the key issues with which local policymakers and their constituents must contend:

  • the benefits of silica sand mining, including high-paying opportunities for employment, increasing regional economic activity, generating tax revenues for state and local governments, and improving economic diversity in rural communities that rely heavily on agriculture for household income.
  • and the costs, including asserted negative effects on tourism and agriculture, and whether mining might result in “boom or bust” economic cycles and may thus not be a sound foundation for long-term economic prosperity.

The authors focus their analysis on Wisconsin, the largest producer of industrial silica sand in the nation, accounting for approximately two-thirds of U.S. frac sand production. They note the state “has strong agricultural and tourism sectors and therefore provides valuable insight into claims industrial sand mining could negatively affect these industries.” They conclude:

Industrial sand mining has been a significant driver of economic growth across the Upper Midwest. If done in an environmentally responsible manner, it can be an important source of employment and earnings for decades to come.