Slowing demand for frac sand changes the landscape in southeast Minnesota

The Nisbit sand mine
An excavator moves dirt at the Nisbit mining site in Saratoga township Thursday, Nov. 7, 2013. Developer Tom Rowekamp and his partner, Ivie Popplewell, began work at the 19-acre mine in mid-October after committing to numerous county environmental reviews and spending money to meet local and state regulations.
Alex Kolyer for MPR

In the middle of a farm in Saratoga township, there's a 150-foot-tall hill, one of the highest points in Winona County.

That's where 60-year-old Tom Rowekamp, of Stewartville, recently climbed into a backhoe to move thick, muddy dirt to build a road along the side of the hill.

"This whole hill is surrounded by cropland," Rowekamp said. "When we lower it, it'll still be higher than what the cropland is and we'll turn it back into prairie again."

Rowekamp chipped away at the hill, exposing a few inches of dirt, a dozen feet of rock and clay, and then layers upon layers of fine, yellow sand that he estimated at about 1 million tons.

Photos: The Nisbit mining site in Saratoga township
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The 19-acre mine where Rowekamp is working with the landowner to extract the sand is the only one approved in the region since the debate over silica sand mining began a few years ago.

Sand is the crucial ingredient in the oil and natural gas extraction process known as fracking, and there are large deposits of it in the steep bluffs along the Mississippi River. But demand for sand has dropped.

Critics have fought the mine, located about 40 miles south of Rochester, since it was proposed. They say it should undergo a stricter environmental review, similar to a study being conducted on several proposed mines nearby.

Ivie Popplewell
Ivie Popplewell points to where a road will be built on the Nisbit in Saratoga township Thursday, Nov. 7, 2013. Popplewell and his partner, Tom Rowekamp, began work at the 19-acre mine in mid-October after committing to numerous county environmental reviews and spending money to meet local and state regulations.
Alex Kolyer for MPR

Winona County required an environmental assessment worksheet for the mine, but not a more detailed environmental impact statement because of the mine's size. When that happened, some local residents appealed the decision to the state Court of Appeals, on the grounds that the county failed to look at possible cumulative effects of other proposed mines.

"They are clumped together," said Margaret Walsh, a Winona resident calling for the appeal. "They're in the same geographic area and that's basically what we're saying is cumulative impact -- the truck traffic, the air pollution, the noise, all those things come into play."

A ruling is expected on the appeal sometime in the spring.

Nationwide, an abundance of frac sand has kept demand down recently, so Rowekamp and his partner Ivie Popplewell, of Winona, have turned to an old market for their product. They're selling the sand to farmers, who use it as bedding for cows. The bedding sand sells for $3.25 a ton -- significantly less than when it's used in fracking.

At the height of the sand boom a couple years ago, frac sand in Wisconsin was selling for as much as $200 a ton.

"We've got to make sure that we're doing everything exactly the way it's supposed to go," Rowekamp said. "Because of the controversy with this, there is probably a number of people that if we don't do something that wasn't right, they're going to be right there saying 'I told you so.'"

The county approved the mine with 40 conditions, including requirements to control dust, noise, erosion and protect water quality. But as long as the men haul the sand to farmers, most of those conditions don't kick in.

The Nisbit mining site in Saratoga Township.
An excavator moves dirt at the Nisbit mining site in Saratoga township Thursday, Nov. 7, 2013.
Alex Kolyer for MPR

Rowekamp hopes demand picks up soon. If it does, he estimates they might exhaust the sand deposit in five years.

"If we're going to do anything with the oil and gas industry, that could be possible," he said. "But if it's just sand for Winona County and surrounding counties, I don't know if we'll get it cleared off in five years."

Despite the slowdown in the emerging industry, Minnesota has new laws that require companies hoping to mine frac sand near trout streams in southeast Minnesota to apply for a permit from the Department of Natural Resources.

State Sen. Matt Schmit, DFL-Red Wing, who pushed for tougher state regulation this year, said there's no need for an all-out ban on silica sand mining right now.

"The timing is great for us to do what we're doing. You don't see a permit request coming in left and right. Really anywhere, and certainly not in Minnesota right now," Schmit said. "And that's good. It allows us just naturally without having to pass a moratorium for instance, to take advantage of the slower pace, to be thoughtful about this and that's so important."

Around the region, local governments are also in a wait-and-see mode. Most local silica sand mining moratoriums have expired. Only Houston and Goodhue counties still have temporary bans, as do the city of Wabasha and Featherstone Township.

Will Seuffert, executive director of the state Environmental Quality Board, said it is working on more specific rules to protect communities and the environment. The agency will have draft standards by mid-December.

"I think we're hearing loud and clear that we need to understand and reflect in our document that there are fundamental differences between projects that are being proposed in different regions and geography and environmental concerns that are in different regions and community concerns, too," Seuffert said.

For Rowekamp and Popplewell, the slowdown has hit their bottom line in a big way. They've invested about $100,000 on the project and haven't turned a profit yet -- even with sales to dairy farmers.

"People have said that big oil is coming in and they're going to take everything," Rowekamp said. "I'm waiting for that big oil guy to show up. But he hasn't yet."

The sand rush has slowed, but industry analysts expect an eventual return in demand. Rowekamp and Popplewell say they want to be ready when that happens.

EDITOR'S NOTE: An earlier version of this story erroneously stated that a new state law prohibited companies from mining within a mile of trout streams in certain parts of the state. Companies must now apply for a permit from the Department of Natural Resources.

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