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A front-end loader moves sand from the rock face through the 1,696-acre mine at the Wisconsin Industrial Sand Company's Maiden Rock facility on August 15, 2013. (Ariana Lindquist)
A front-end loader moves sand from the rock face through the 1,696-acre mine at the Wisconsin Industrial Sand Company's Maiden Rock facility on August 15, 2013. (Ariana Lindquist)

Sand bandits: Fracking boom drives new gold rush Add to ...

Even the name sounds strangely illicit: Northern White.

It’s not a narcotic. It’s sand – a very particular kind of sand mined in Wisconsin and elsewhere in the Midwest. It’s prized in large part because it can stand the pressure of being rammed deep into the earth – an invaluable part of fracking, one of the world’s most lucrative industries.

For years, sand has been one of the world’s most sought-after commodities. A decades-long construction boom in many of the world’s mega-cities has created insatiable demand. As a result, sand is quickly being siphoned away from beaches and other areas around the globe – from Jamaica to Morocco, India to Mexico.

But in recent years, another industry has ignited a frenzy of new demand for the ancient commodity. Hydraulic fracking, the process of extracting natural gas by injecting millions of gallons of chemicals into the ground, relies on sand as a vital component. As a result, the kinds of sand that can withstand the immense pressure of the fracking process have become valuable. In all, oil-and-gas industry needs drive roughly three-quarters of the $4.5-billion (U.S.) sand market.

As with every gold rush, there are repercussions. Across the U.S. and in many other parts of the world, environmental groups and sand miners are caught in bitter battles over everything from the health effects of rampant sand extraction to the effect of beach erosion on coastal shorelines. Small farm towns have morphed to million-dollar mining sites seemingly overnight. In some places, sand bandits have become this millennium’s version of copper-pipe thieves.

For years, sand has been a vital fuel for the world’s construction industry. And where regulation is lax, illicit mining often flourishes on every scale – from impoverished miners on the beaches of Morocco to massive, unregulated and sometimes Mafia-run operations across India. In Israel, one of the country’s most notorious gangsters got his start stealing sand from public beaches. In 2008, an entire beach in Jamaica – about 500 truckloads of sand – went missing. The culprits have never been found.

Despite much more well-enforced regulations, the U.S. has not been immune to sand-related foul play. In 2003, the state of California fined the British construction materials firm Hanson PLC $200-million for a case of alleged sand theft involving roughly $100-million worth of the commodity from San Francisco Bay – a place that today, according to Ian Wren, a staff scientist with the conservation group San Francisco Baykeeper, is seeing sand erode at a faster rate than anywhere else in the state.

“The U.S. Geological Survey indicated that’s probably due to sand mining,” he said. “There’s a large highway at risk, there’s sewage infrastructure that might have to be relocated, at a cost of hundreds of millions of dollars to San Francisco taxpayers.”

But fracking has radically altered how the commodity is mined, sold and used.

Just five years ago, there were about 10 sand mines in Wisconsin, the new epicentre of Northern White production. Today, the number is more than 100. During the same period, the price of silica has soared from about $35 (U.S.) per metric tonne to more than $56.

“The industry has taken off like mad,” says Keith Schaefer, publisher of the Oil and Gas Investment Bulletin. He points to the summer of 2013 as a turning point – it was then that a couple of major fracking companies reported that injecting more sand into the ground was having a significant, positive impact on how much energy was coming out. All of a sudden, oil and gas producers who were using perhaps a million pounds of sand in a single well started using upwards of seven million pounds.

“Volumes have gone ballistic,” says Mr. Schaefer.

But with explosive growth comes myriad problems. Instead of the wholesale theft common in many other parts of the world, American authorities have had to contend with an environment akin to the Wild West, with dozens of (sometimes tiny, unlicensed) operations popping up seemingly overnight across the Midwest.

Late last year, authorities in Wisconsin had to shut down a fracking-sand operation that was running without permits and dumping wastewater into a nearby pond. Late last year, a report by the Land Stewardship Project found that about 40 per cent of the frack-sand companies in the state had seriously violated natural resources regulations.

The industry contends that many of the violations are the doing of small, inexperienced players. But part of the problem faced by regulators is the sheer speed at which new operations are starting up. Across the Midwest, sand mining concerns are sprouting where once there was farmland, as landowners realize that the the sand can be more lucrative than the crops. Some counties have placed moratoriums on sand mining until they can better study the industry, while others have specifically eased regulations to attract sand-mining companies and the jobs and revenue that come with them. As a result, there exist few, if any, overarching regulations.

“Those mines [in Wisconsin] were sleepy little mines for years,” says Mr. Schaefer.

“And then all of a sudden, it’s like getting hit in the head with a sledge hammer, but it’s a sledge hammer full of money.”

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