Wednesday, May 18, 2016

Wisconsin’s expensive Frack Sand market shifts to cheap southern suppliers, big surprise.

CEO’s might be in love with Wisconsin’s business climate, but business is more in love with even cheaper states and countries, where they want to take their businesses. Massive layoffs continue as manufacturing moves out of state to new facilities. Add to that frack sand manufacturing...WPR:
Wisconsin frac sand is losing ground to sand produced in states like Illinois, Missouri and Arkansas as the market continues to retract … demand for Wisconsin frac sand meant drillers were willing to pay for it to be shipped to their wells around the country. 

Now, with the market in its second year of decline, energy companies are turning to cheaper, lower quality sand mined closer to the oil fields. To be able to compete, Wisconsin frac sand companies have had to build expensive transload facilities to unload sand from rail to trucks near oil fields like the Permian Shale Basin in Texas and New Mexico and the Bakken Shale of North Dakota. Rick Shearer, CEO of Superior Silica Sands, which has operations in Chippewa and Baron counties, said building transload facilities costs tens of millions of dollars ... "frac sand companies are only making around $7 per ton compared to the $35 per ton they made two years ago is painful."
Oddly, the good news depends on all of us paying more for oil, allowing energy companies to spend more at Wisconsin's frack sand mining facilities (many owned by out-of-state companies).  

Scott Walker's "eggs in one basket" style of governing, favoring Republican industries over all others, was destined to come back and haunt us. 

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