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Frac-Sand Mining's Promise of Economic Prosperity Fails to Materialize

Energy

Institute for Agriculture and Trade Policy

The true economic impact of frac-sand mining on rural Wisconsin communities may fall short of industry claims promising sustained prosperity and economic opportunity, says a first-of-its-kind expert report, released today. By using currently available economic data, The Economic Benefits and Costs of Frac-Sand Mining in West Central Wisconsin offers a full, unbiased analysis of costs and benefits for communities affected by frac-sand mining. The report concludes by offering a list of questions to be considered that can help rural towns effectively evaluate benefits and costs of frac-sand mining for their community.

When drilling for oil or natural gas is impractical due to geological factors, hydraulic fracking is an increasingly popular alternative for oil and gas companies. Fracking involves injecting materials—often sand—into rock formations, opening them and allowing resources to be extracted. Wisconsin has substantial deposits of sand with the perfect properties for fracking—also known as frac-sand. As oil and gas companies increasingly turn to fracking, the demand for frac-sand has boomed as well—especially throughout rural Wisconsin.

“Local communities are under growing pressure to approve frac-sand mining operations, but often they don’t have all the data they need to make decisions based on their own economic interest," said Tom Quinn, executive director of the Wisconsin Farmers Union. "This study helps to provide that data and offers a template for better informed community discussions.”

Frac-sand mining’s tendency to disturb land and cause air and water pollution, as well as other environmental problems, is often omitted in industry studies promising economic prosperity in the form of additional jobs, payrolls and taxes for the community. According to the report, however, these promises—usually backed by industry-produced economic impact analyses—are often unsubstantiated. In fact, the jobs associated with frac-sand mining will likely make up only a very small fraction of one percent of total employment in west central Wisconsin.

The report suggests a list of questions local communities should consider when evaluating a potential mining operation in their towns. The framework focuses both on benefits, such as jobs and tax revenues, and on costs that are often overlooked: environmental and health impacts, infrastructure costs and negative effects on property values, other local businesses and industry.

“The economic analysis with which west central Wisconsin has thus far been provided is more public relations than facts—industry reports often leave out the short and long term costs while focusing exclusively on purported benefits,” said Dr. Thomas Power, principle author of the study. “This report is designed to help communities make more scientifically informed decisions.”

Dr. Thomas Power is professor emeritus in the Economics Department at the University of Montana and a nationally recognized economist with a long history of research on the economics of the mining industry. The report was commissioned by the Wisconsin Towns Association, Wisconsin Farmers Union and the Institute for Agriculture and Trade Policy.

Visit EcoWatch’s FRACKING page for more related news on this topic.

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