Wisconsin’s frac sand mining business hits a slump

By: - November 19, 2019 11:39 am
frac sand active mine pit

Photo courtesy Wisconsin Geological and Natural History Survey. Reprinted with permission.

A Texas-based frac sand company has devalued two of its mines in western Wisconsin amid an industry-wide slump that has rippled through much of the state’s frac sand  industry.

The action by Hi-Crush Inc., based in Houston, Texas, wrote off $215 million on the two mines, in the towns of Whitehall and August. The company’s action was first reported by the Wisconsin State Journal

“The market is over supplied and will be rationalized, whether through attrition and/or consolidation,” Hi-Crush CEO Robert Rasmus told investors in a conference call  earlier this month. “As a result, we are acutely focused on remaining disciplined and controlling what we can control. … Unlike some of our competitors, we prioritized profit over market share and shaping a business that will produce sustainable consistent returns for our investors.”

The company laid off a total of 37 workers at its Whitehall operation in October and November, it said in a letter to the state Department of Workforce Development. 

President Donald Trump took office vowing to unleash domestic oil and natural gas exploration, which in turn boosted interest in fracking, which is used in those extractive industries. And Trump has begun opening up public lands for further development, alarming environmentalists while delighting energy companies.

Public records compiled by the Center for Responsive Politics show that in the last four years alone, Rasmus has donated $35,000 to the Republican National Committee and $5,000 to a pro-Trump political action committee, the Great America Committee.

Yet the industry boom has had mixed effects. With it, frac sand mining has been expanding elsewhere, leading to a glut in the supply and plummeting prices, which in turn has battered Wisconsin’s market.

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Erik Gunn
Erik Gunn

Deputy Editor Erik Gunn reports and writes on work and the economy, health policy and related subjects, for the Wisconsin Examiner. He spent 24 years as a freelance writer for Milwaukee Magazine, Isthmus, The Progressive, BNA Inc., and other publications, winning awards for investigative reporting, feature writing, beat coverage, business writing, and commentary.