The threat of sand mining in Minnesota

Friday, August 10, 2012

Frac sand is valuable and Minnesota, including Hennepin County, has lots of it.

The sand is used for hydraulic fracturing, or fracking, which has transformed and increased oil and gas production in the U.S. in recent years. The procedure blasts sand, water and chemicals into underground rocks to enlarge natural fissures in rocks and to release otherwise unreachable deposits of oil and natural gas.

In Minnesota, Goodhue County adopted a sand mining moratorium in September in response to a 155-acre land purchase by a drilling company in Midland, Texas. Goodhue County is considering the impact of the mine on nearby woods, bluffs, a protected trout stream and a housing development.

Wabasha County is in the middle of a year-long ban on sand mines. Winona County passed a three-month ban in January and Houston and Fillmore Counties passed one-year moratoriums in March. The cities of Winona, Red Wing, Lake City, Hay Creek and Florence have also passed moratoriums.

Winona County, whose moratorium expired in May, is now issuing permits for sand frac mining permits. Winona County officials contend that they have had adequate time to develop criteria for environmental impact studies and draft a road-use agreement that requires mining companies to pay for road damages

The residents of Hennepin County could wind up in the same debate. According to the Minnesota Department of Natural Resources, there are six active silica mines in southeastern Minnesota. Most of the silica sand, part of the 500-million-year-old Jordan sandstone formation, lies close to the surface in southeastern Minnesota, in an arc from Dodge to Washington Counties. However, there are significant deposits along exposed river corridors in Ramsey, Hennepin, Carver, Scott, Sibley, Le Sueur, Nicollet and Blue Earth Counties.

Driving the land rush is the fact that frac sand is in short supply and typically sells for about $50 per ton although it fluctuates with the price of oil and gas and has sold for as much as $100 per ton, according to the U.S. Geological Survey. The amount of frac sand sold in 2010 was 12 million metric tons, nearly doubling the sales of the previous year.

Minnesota and Wisconsin has some of the best sand. Frac sand found near the surface throughout southeastern Minnesota and western Wisconsin is known as “Northern White” and can reportedly sell for $200 per ton. These perfectly round, inert, pure quartz silica sand grains can withstand the intense pressure needed to break apart rock and are therefore ideal for creating and preserving the fissures and maximizing the oil and gas flow.

The sand mining has raised two main issues: environmental and local government regulation.

Mining the sand requires removing the soil above a sandstone deposit and using large amounts of water to produce the fine grains.  The mining process may also generate considerable dust.

According to the U.S. Occupational Safety and Health Administration, the dust is a cause of silicosis and other respiratory diseases and a potential carcinogen (although current studies have focused on the effects of high concentrations of the dust in closed facilities rather than the effects to people outdoors).

Citizens concerned about the mining process object to the noise, heavy traffic and silica dust created by the mining process. In addition, many worry about the potential for erosion with resulting damage to nearby rivers and lakes and possible harm to underground aquifers as well as the blight created during and after the mining operation.

In fact, the Wisconsin Department of Justice is considering fines against two sand mining operations that had two large sand spills into the St. Croix River in the spring.

If a sand mining operation is proposed somewhere in Hennepin County, the Hennepin County Attorney’s Office may become involved in advising the county board on its ability to regulate the operations. Hennepin County’s involvement, however, is much more limited than that of other counties since it is the only county in Minnesota that does not have authority to conduct planning and zoning activities. Hennepin County, however, can charge the mining company a fee for expected wear and tear on county roads and can appoint a mining inspector to oversee the safe operation of the sand mine. The issue is now significant enough that the Minnesota County Attorneys Association presented a webinar in late June on the legal issues surrounding frac sand mining, using Winona County as the example.

Although there has not yet been significant litigation in Minnesota on sand mining, there has been substantial litigation concerning gravel deposits. Many of these lawsuits involved conditional use permits and the issue of whether a governing body’s decision to deny the permit was arbitrary. NBZ Enterprises, Inc. v. City of Shakopee, 489 N.W.2d 531 (Minn. App. 1992); Scott County Lumber Company, Inc. v. City of Shakopee, 417 N.W.2d 721 (Minn. App. 1988)

Another case concerned potential for significant environmental effects and the resulting need for an environmental impact study under Minnesota Rule 4410.1700. Citizens Advocating Responsible Development v. Kandiyohi County Board of Commissioners,
713 N.W.2d 817 (Minn. 2006)

The Minnesota Supreme Court reviewed a plaintiff’s appeal in a case where a plaintiff alleged that a mine’s operation caused dust and noise which thereby created a nuisance under Minnesota Statute §561.01. Hawkins v. Talbot, 80 N.W.2d 863 (Minn. 1957)

There has also been a significant amount of litigation regarding mineral rights and the right to subsurface gravel by a previous owner as allowed for by a warranty deed. Vang v. Mount, 220 N.W.2d 498 (Minn. 1974); Resler v. Rogers, 139 N.W.2d 379 (Minn. 1965).

Chuck Salter, who wrote this piece, is an attorney with the Hennepin County Attorneys Office’s Civil Division.