Energy boom's uncertain cost

WINONA, MINN. - Three years ago, a Texas businessman named Kim Smith landed in this little river town by chance, when his private plane ran low on gas.

As he approached the runway, the distinctive bluffs and railroad tracks that embrace the Mississippi River spread out before him. Below, on the west end of Winona's sprawling industrial riverfront, rose tall piles of gravel and sand.

Today, that confluence of river, railroad and Texas entrepreneurial spirit has made Winona the epicenter of a new Midwestern gold rush: frac sand mining.

Nearly 50 mining operations have opened nearby in the past few years, producing enough sand to send 54,000 semitrailer trucks rumbling down Winona's main street in a year.

But as the boom spreads, from western Wisconsin to Mankato to Shakopee, it is igniting a debate over sand mining and the larger industry it serves -- the controversial oil and gas drilling practice called hydro-fracking.

Just last month, dozens of Winona residents took to the street near the heart of downtown, waving protest signs in front of a 50,000-ton pile of sand they derisively call Mount Frac. "Short-term profit, long-term problems," read one placard.

But many in the industry say sand mining is here to stay, as long as oil and gas companies continue to ramp up domestic production to address the nation's energy demands.

That leaves communities such as Winona struggling to balance competing demands -- the truckers and farmers who turn up at town meetings, saying that this is their chance to earn a good wage or save the family farm, and the local citizens who worry about the toll of the sand-mining boom on their health, the water and the rolling landscape.

"It's something that probably isn't going to go away," said Jerry Miller, a businessman who has served as Winona's mayor for the last 16 years. "But maybe it will be done in a more efficient, more city-friendly way."

Rare sand

The tawny mountain that rises near downtown Winona is made from a special kind of sand: perfectly round, inert silica sand from the 500-million-year-old Jordan sandstone formation left behind by ancient seas that once covered much of the Midwest.

The pile, as big as a two-story building, was built by the steady parade of trucks that roll through Winona, hauling sand from mines in Wisconsin and nearby bluffs, where the sand is close to the surface and easy to dig.

Demand for frac sand quadrupled from 2000 to 2009, and then doubled again in the following year to more than 12 million metric tons annually, according to the U.S. Geological Survey. Three-fourths of it comes from the Midwest.

In Minnesota, some companies that have been in the sand business for years are now expanding. Scott County authorities are reviewing proposals to mine about two square miles along the edge of the Minnesota River Wildlife Refuge -- including the grounds of the popular annual Minnesota Renaissance Festival.

Drawing a crowd

But in southeastern Minnesota, the pace of growth, heralded by the sudden arrival of often-unidentified developers offering large sums for land, has communities in an uproar.

With its hills and bluffs and cold trout streams, the region is one of the most beautiful parts of the state. But its fractured bedrock geology makes the ground and surface waters particularly sensitive to pollution.

As a result, anxiety about sand mining has spread quickly up and down the Mississippi. County and township board meetings that normally pass unnoticed are packed with irate citizens.

Many say the fears are unwarranted. Most communities already have regulations to protect scenic and sensitive lands. Sandwashing facilities recycle their water in closed loops, limiting their effect on groundwater, and the mining companies typically reclaim the land once a mine is spent, restoring the topsoil and the plants they removed.

More importantly, they say, the growth of the industry will inevitably be limited by logistical constraints.

"There are 22 counties in Minnesota and Wisconsin that have sand close to the surface," said Jeff Broberg, a Rochester geologist and environmental consultant who works with developers. But "if you are 30 miles from the sand port, it's not economical."

Nevertheless, the uncertainties have spawned citizen groups with such names as Save the Bluffs and the SandPoint Times, which in the last year have helped push through moratoriums in half-a-dozen counties and townships up and down the Mississippi.

"We are taking our time and being cautious," said Jason Gilman, director of Environmental Services for Winona County, where eight proposed sand mines are on hold. "To a large extent, this sets a precedent for how we handle these applications for 20 or 30 years. We want to start with a good foundation."

Jobs -- and noise

Nowhere are the tensions more palpable than in the town of Winona.

In the time since Kim Smith first touched down there, his private plane has become a regular sight at the Winona airport, and he has helped arrange financing for several of the new sand operations around town, according to Miller.

Smith, who declined to be interviewed for this story, has kept a low profile around Winona, residents say, but did offer $50,000 toward street maintenance on the main truck route, according to Miller.

It all started last summer, when residents who live down the hill from Biesanz Stone began to feel vibrations from blasting. Not the occasional familiar tremor from Biesanz, which for nearly 100 years has mined limestone for the building industry. These were big, repeated vibrations -- some strong enough to break Pat Smith's sliding glass door into a pile of shards. "On that day it shook the house," Smith said.

The sand that lies beneath the limestone had become more valuable than the stone itself, and the company was blasting through 40 feet of rock to get to it.

"The frustrating part is that this industry came in here so quickly," said Marie Kovesci, who lives near Biesanz and has become an activist. "We didn't have time to know what hit us."

As a result, Winona's leaders are wrestling with ways to limit the industry's ramifications while retaining the economic benefits.

The sand businesses have created about 50 new jobs and, industry consultants say, could offer attractive paydays for local landowners.

Like many with a financial interest in sand mining, officials from Preferred Sands declined to be interviewed. But the company argues that sand mining is creating long-term jobs when the economy needs them and that it mines sand in a sustainable and environmentally conscious way.

Recognizing the need for balance between economic growth and environmental protection, city officials are considering a one-year moratorium on new sand operations within the city limits, plus rules that would require the companies to help pay for road upkeep and limit the hours of operation.

"We will try to work with the industry to accomplish that," Mayor Jerry Miller said. "If we have to take further steps, then we have to."

Alison Denio, who lives in an old, graceful neighborhood a few blocks from the sand storage site, said she and other parents worry about their kids getting hit by a sand truck and about the health risks of the sand dust that drifts through town. "First and foremost I am their mother," she said of her three children. "I have an obligation to know what's in their environment."

For now, not much is known about the health risks. In high concentrations, the ultra-fine particles of silica sand can cause a number of lung diseases, including cancer. But those risks mostly have been associated with people who work in the industry. At this point, state officials say, there are no air quality standards for silica dust and no one knows whether sand mines and processing facilities generate levels that are a risk for the public.

"They moved it from our back yard to someone else's back yard," said Denio.

Josephine Marcotty • 612-673-7394