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    Getting Along: Wisconsin’s Frac Sandbox

    Given the large scale and rapid growth of frac sand mining operations in Wisconsin, some conflict between mines and their neighbors probably is unavoidable, but mine owners can promote good relationships by adhering to existing health and environmental laws and regulations.

    Joseph Michael Russell

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    large trucksThe oil and gas industry loves Wisconsin sand. Millions of tons of the state’s silica – ideally suited because of its shape, hardness, and size – are being used to help fracture shale formations throughout the country, from the Bakken formation in North Dakota to the Marcellus formation in Pennsylvania. Because of the high demand for Wisconsin’s sand, The Wall Street Journal has dubbed Wisconsin “the Saudi Arabia of the American sand market”;1 even Saudi Arabia is reported to be importing Wisconsin sand.2 This means that Wisconsin, although it has no oil or natural gas reserves, will play a major role in America’s energy independence for years to come as the nation’s top frac sand source – that is, if Wisconsin’s residents want it to.

    Debate in the state legislature continues as to how much control local communities should have in regulating frac sand mining. The debate reprises recent battles over the siting of wind turbines, cellphone towers, and concentrated animal feeding operations. Concerns continue to grow over the health and environmental effects – not to mention the effect on the state’s scenic beauty – of the state’s 135 active frac sand operations, up from only 10 operations in 2010.3

    This article provides an overview of recent developments in the state’s frac sand industry and identifies two key public concerns, silica dust and water pollution, that the industry and its regulators must address if Wisconsin wants to remain the country’s favorite source for frac sand.

    The Frac Sand Boom

    The “frac sand rush” has drawn frac sand prospectors to at least 19 of Wisconsin’s 72 counties, most of them located in the western part of the state. Although the demand for frac sand can be as volatile as the price of oil itself, there is little doubt that the oil industry will want to continue to extract Wisconsin sand on a long-term basis because of its importance in hydrofracking. Indeed, with the help of Wisconsin’s sand, hydrofracking might help the United States overtake Saudi Arabia as the world’s biggest crude oil producer by 2015 and allow it to become self-sufficient in petroleum by 2035.4

    Railroads, such as Canadian National (which shipped 50,000 rail cars of sand in 2013 alone), are so confident the frac sand boom will continue that they are spending tens of millions of dollars to upgrade and restore old rail tracks to help export the sand from the state in ever-increasing quantities.5 Such rail upgrades will, in turn, attract additional investment in frac sand operations to the state.6

    The Backlash

    Wisconsin’s mining history is well known: there is a miner on the state flag, of course, and there are well over 2,000 nonmetallic mines in Wisconsin. Nevertheless, there was little warning to many Wisconsin residents of the scale and intensity of the new industrial frac sand operations. Former small-scale sand mines, which had long excavated silica for traditional uses in foundries, sandblasting, water filtration, glassmaking, and construction, have been eclipsed by several hundred-acre sites that operate around the clock. Communities in the mines’ vicinities have seen unprecedented increases in motor vehicle traffic, noise, and light pollution. Public health concerns about local air and water quality have risen dramatically.

    As a result, in 2013 there was a sharp rise in opposition to frac sand mining. Buffalo, Dunn, Eau Claire, Pepin, and Trempealeau counties, which previously had embraced frac sand mines, imposed moratoriums on the permitting of new mines and the expansion of current mines so that health effects of the operations could be further studied.7 Opposition to frac sand mining even took the form of recall elections: the mayor and two council members of Glenwood City narrowly survived recall elections in December 2013 after approving a frac sand mine that would be built within one mile of the local school.8

    Meanwhile, the Wisconsin Department of Natural Resources (DNR), the lead state agency regulating frac sand mining, was not immune to complaints that it was not doing enough to monitor frac sand operations. Despite politics – there was a 2,100 percent spike in campaign contributions to state politicians from frac sand mining and natural gas industries from 2010 to 20139 – the DNR has issued at least 20 notices of violations, alleging violations of environmental laws, to 19 different sand mining companies since 2011.10 The DNR’s oversight of the frac sand industry will grow as it recalibrates the resources needed to efficiently regulate it. In December 2013, for instance, the DNR hired two engineers to work exclusively on compliance and permitting at frac sand sites.11

    Who is in Control?

    Despite the DNR’s regulatory authority, most regulation, including siting requirements and reclamation plan approval, of Wisconsin’s frac sand operations currently takes place at the local level. Local governmental units (counties, cities, villages, and towns that are authorized to exercise village powers), can regulate frac sand operations through zoning ordinances, licensing ordinances, and police power ordinances.12 Bolstering this local regulatory power is the 2012 Wisconsin Supreme Court decision Zwiefelhofer v. Town of Cooks Valley, which held that a town’s frac sand mining ordinance was a valid exercise of its police power.13

    Joseph M. Russellcom jrussell vonbriesen Joseph M. Russell, Northwestern 2003, is a shareholder in the litigation and risk management practice group at von Briesen & Roper s.c., Milwaukee.

    In response to Zwiefelhofer and to promote regulatory uniformity throughout the state, during the 2013-14 legislative session, Sen. Thomas Tiffany introduced two bills (SB 349 in October and SB 632 in February) that were designed to limit local authority to control frac sand operations.14 Although both bills failed to pass, the battle over who should regulate the frac sand industry, including standards pertaining to air and water quality, will continue in future legislative sessions.

    This all means that the state’s frac sand operators will be facing a shifting regulatory climate and more public scrutiny in the coming years. Failure to be a “good neighbor” at any step of their operations, from permitting to reclamation, might result in greater public opposition and potential litigation. Some of the public concerns, such as increased road and water use, reductions in property values, and increased noise and light pollution, are common to many large-scale industrial operations and often can be resolved with local governmental units during the permitting and site-planning process. There are two key concerns, however, to which the state and its mine operators must pay special attention because they pose potential health concerns: silica dust and water pollution.

    Silica Dust

    Frac sand operations such as blasting, excavating, drying, screening, stockpiling, and transportation can release silica dust into the air. Some of the tinier silica dust particles (known as respirable crystalline silica) can be inhaled deep into the lungs. The size of crystalline silica particles of most concern are those that are smaller than four microns (millionths of a meter), also known as particulate matter 4 (PM4). By comparison, a human hair is typically 70 to 100 microns in diameter. Long-term exposure to this type of silica dust can cause an irreversible lung disease, silicosis, as well as lung cancer, chronic obstructive respiratory disease, bronchitis, and renal disease.15

    The U.S. Occupational Safety and Health Administration (OSHA) and the U.S. Mine Safety and Health Administration (MSHA) have long regulated worker exposure to respirable silica dust in industries in which silica quartz is used. However, those regulations might soon tighten significantly as the health hazards related to silica dust become better understood. OSHA has proposed lowering the 40-year-old permissible exposure limit (PEL) for occupational exposure to respirable crystalline silica by 50 percent and has proposed new and costly regulatory requirements on employers, including exposure monitoring, medical surveillance, and worker training.16

    This comes on the heels of an OSHA-NIOSH hazard alert that frac sand was posing a specific health threat to workers in the hydraulic fracturing industry.17 OSHA estimates the new standards will save nearly 700 lives and prevent 1,600 new cases of silicosis per year.18

    These regulatory developments not only have heightened concern over occupational risks posed by silica dust but also have increased public concern about the ambient air quality near frac sand operations. Although the DNR studied the health effects of silica dust as recently as 2011, it did so without any of its own crystalline silica monitoring data.19 Relying on data from air pollution agencies in other states, the DNR reported that, for people who live near a source of crystalline source, “silica ambient air concentrations could be above a level of concern.”20

    Although the DNR is now releasing more information about ambient air quality near frac sand operations, the state has yet to resolve public fears about the dangers of respirable crystalline silica.21 Unless it does so, the DNR will continue to face citizen suits and petitions contesting air pollution control permits issued to frac sand operators.22 Such a petition was filed in the summer of 2013 by residents who alleged that air pollution permits did not take into account the “fugitive” silica dust that would affect ambient air quality.23

    Frac sand operators, of course, still must implement adequate dust control plans or face action by the DNR itself.24 In December, a Texas-based company with a sand processing plant in Marshfield agreed to pay $80,000 for violating state air pollution laws after the DNR received complaints regarding silica dust blowing off its sand stockpiles.25 The DNR noted that a fugitive dust plan – which requires, for instance, frequent watering of areas in which dust can be kicked up – had never been implemented. Operators must also construct their facilities exactly as they proposed in their air-permit applications; failure to do so is a frequent basis for regulatory action.

    Water Pollution

    Wisconsin’s frac sand operations are often located near rivers and wetlands, and mining often takes place below the water table. High-capacity wells and settling ponds are needed to help wash and process the sand, which may, in turn, alter the pH and sulfide levels in local groundwater. Simply put, frac sand mining can have an immediate effect on local water quality unless sufficient safeguards are put in place.

    In a well-publicized incident in Trempealeau County, a 2,100-foot plume of mud escaped from a frac sand facility and polluted local wetlands. As a result, the state Justice Department, in the first action of its kind, fined the frac sand operator $200,000.26 Such incidents and resulting penalties can be prevented if mine operators engage in responsible erosion control.

    The responsible use of flocculents, which are chemical additives that are used to wash frac sand, must also be diligently monitored. There is growing public concern about one common flocculent used by frac sand operators – polyacrylamide – because it contains small levels of a acrylamide, a neurotoxin, which could contaminate groundwater.27 Although there is no evidence suggesting any contamination has taken place in Wisconsin, the public needs assurance that it never will. Wisconsin requires frac sand operators to record all chemical additives used in their facilities so the DNR can provide the public this assurance.

    Nuisance

    But even regulatory compliance does not forestall one additional risk faced by frac sand operators that anger their neighbors: the nuisance suit. Operators may be subject to successful nuisance claims if nearby residents can demonstrate the operations have caused them “substantial injury,” which has long been defined by Wisconsin courts as “tangible” injury or as “discomfort perceptible to the senses of ordinary people.”28 Unlike most states, Wisconsin does not recognize the doctrine of “comparable injury” in nuisance cases. In other words, injuries caused by air pollution, water pollution, or other frac sand activities may be compensated irrespective of the utility of the offending conduct as compared to the injury.29

    Conclusion

    Fines and potential litigation can be precluded if frac sand operators comply with regulatory requirements and address public health concerns on a timely and transparent basis. To this end, both private and governmental organizations – such as the Wisconsin Industrial Sand Association and the Wisconsin Counties Association – promote model codes of conduct and offer best-practice guidelines.30 By adhering to such best codes and practices, frac sand operators stand to gain greater acceptance from Wisconsin’s residents.

    Endnotes

    1 Tom Gara, Fracking Boom Turns Wisconsin into a Saudi Arabia of Silica, Wall St. J., Dec. 3, 2013.

    2 Tom Still, Fracking Boom is Opportunity for State Companies, Milwaukee J. Sentinel, July 27, 2013.

    3 The 135 active sand-mining operations include 63 sand mines, 45 processing plants, and 27 shipping/rail operations, although the number of discrete mining sites is less than 135, because some individual locations have a combination of types of operations. There also are now approximately 12 proposed mining sites and approximately 80 inactive sites. Karen Rivedal, Transparency, Good Regulation Needed as Wisconsin Sand Mines Multiply, Wis. St. J., April 20, 2014.

    4 Kevin Allison, Oil’s New Age of Plenty Challenges Old Assumptions, Reuters, Dec. 27, 2013.

    5 This past year CN accelerated work on a $33 million rehabilitation of 74 miles of track between Wisconsin Rapids and Blair to help serve the frac sand industry, after spending $35 million on similar rail improvements between Ladysmith and Poskin in 2012. See, e.g., William C. Vantuono, CN Adds Frac Sand Producer in Wisconsin, Railway Age, Dec. 9, 2013; see also Rob Schultz, Safety and Reliability Issues Plaguing Railroads Across the State, Wis. St. J., March 24, 2014.

    6 Northern Frac Proppants Arranges Funds for More Frac Sand Facilities in Wisconsin, Progressive Railroading, Dec. 27, 2013.

    7 Local governments can impose moratoriums under Wis. Stat. sections 59.69, 62.23(7)(da) and 66.1002. Samantha Luhmann, Trempealeau County Board Oks Frac Sand Moratorium, Aug. 20, 2013.

    8 Chuck Rupnow & Rachel Minske, Frac Sand Mining Recall Fails in Western Wisconsin, TwinCities.com, Dec. 18, 2013.

    9 Maggie Ginsberg-Schutz, Natural Selection, Milwaukee Mag., Jan. 2014.

    10 Lee Bergquist, Sand Mines in Wisconsin Unearth Environmental Problems, Milwaukee J. Sentinel, Aug. 4, 2013.

    11 New DNR Staff to Focus on Environmental Compliance for Industrial Sand Mining.

    12 See, e.g., Wis. Stat. §§ 61.34 (1), 62.23(7).

    13 Zwiefelhofer v. Town of Cooks Valley, 2012 WI 7, 338 Wis. 2d 488, 809 N.W.2d 362.

    14 The bills can be found at docs.legis.wisconsin.gov/2013/proposals/sb349 and docs.legis.wisconsin.gov/2013/proposals/sb632.

    15 Wis. Dep’t of Health Servs., Respirable Crystalline Silica from Sand Mining, (last revised Oct. 5, 2012).

    16 78 Fed. Reg. 56,273 (Sept. 12, 2013).

    17 OSHA-NIOSH Hazard Alert, Worker Exposure to Silica During Hydraulic Fracturing, (last visited June 9, 2014).

    18 U.S. Dep’t of Labor, Crystalline Silica Rulemaking, (last visited June 9, 2014).

    19 Wis. DNR, Report to the Natural Resources Board: Silica Study, Aug. 2011.

    20 Id.

    21 The DNR’s interactive air monitoring map for industrial sand mine and processing plants (last revised May 9, 2014).

    22 An air pollution control permit is required under Wis. Stat. chapter 285. Wisconsin Administrative Code section NR 415.075 regulates particulate matter emissions limitations for industrial sand mines.

    23 See Midwest Environmental Advocates, FTS International Air Permit Challenged by Citizens Concerned with Silica Dust, Public Health, (last visited June 9, 2014).

    24 See Wis. Admin. Code § NR 415.075(2).

    25 Patrick Marley, Texas Firm to Pay $80,000 for Breaking Wisconsin Air Pollution Laws, Milwaukee J. Sentinel, Dec. 27, 2013.

    26 Lee Bergquist, Wisconsin Attorney General Levies Fine Against Sand Mining Company, Milwaukee J. Sentinel, Dec. 16, 2013.

    27 Wis. DNR, Silica Sand Mining in Wisconsin, Jan. 2012.

    28 Jost v. Dairyland Power Coop., 45 Wis. 2d 164, 172, 142 N.W.2d 647 (1969).

    29 Id. at 175.

    30 The Wisconsin Industrial Sand Association Code of Conduct (last visited June 9, 2014). The Wisconsin Counties Association Frac Sand Task Force Best Practices Handbook can be accessed at www.wicounties.org/.

    31 U.S. Environmental Protection Agency, The Process of Hydraulic Fracturing, (last updated May 2, 2014).




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