Local officials should ask in-depth questions about costs and benefits when they consider whether to permit a frac sand mine, according to findings in a report released Wednesday by the Minneapolis-based Institute of Agriculture and Trade Policy.
The study, conducted by Thomas Power, a retired University of Montana economist and an expert on the economics of mining, concluded that the economic effects of silica sand production used in mining is likely to be quite small.
Drawing from data collected by the federal government and the state of Wisconsin, production could create about 2,300 jobs, but that's less than one percent of total employment statewide. The frac sand region creates about the same number of jobs in all categories every two months, Power said.
Power cites the following as reasons for mining's poor performance in creating healthy economies:
• Fluctuations in demand • Increasing mechanization • Mines depleted more quickly • Workers commute long distances, families live elsewhere • Small local economies can't supply mines • Impacts on the environment make the region a less attractive place to live and visit • Can discourage other businesses by paying high wages and degrading the environment
Mining companies will leave the sand in the ground if it's not profitable to mine, Power said, and governments should take the same practical approach.
"Let's be as business-like in the public decisions we make as the mining companies are when they decide to take the top off of a hill," he said.
He said officials should ask about the pay scales of promised jobs, whether the industry will be stable and whether it will harm existing businesses such as tourism-oriented firms.
The report was commissioned by the Wisconsin Towns Association, the Wisconsin Farmers Union, and the Minneapolis-based Institute for Agriculture and Trade Policy.