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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsOil Bust Claims Unusual American Victim; The Surprisingly Big Market for Sand Just Collapsed
September 21, 2015 — 7:00 PM EDT
In New Auburn, Wisconsin, a desolate, little outpost carved from the rolling pine-tree forests that run into Lake Superior, the collapse in oil is wreaking havoc on every aspect of the economy.
It’s not that there’s any oil here. None in fact for hundreds of miles around. What they’ve got is sand. Real good sand, piled high in giant mounds. And in what is a little-known offshoot of the shale oil revolution that swept across America over the past decade, the market for sand -- the grit that props open the rocks and makes fracking possible -- exploded too, transforming almost overnight what had been a sleepy industry that sold primarily to the likes of glass makers and golf courses. So when the shale boom went bust, it took down the sand industry with it. Prices have sunk almost a third to under $40 per ton.
For the people of northwestern Wisconsin, the epicenter of the sand rush, the economic toll has been harsh. It all happened so fast that many -- like the Bischel brothers: Tom, age 42, and Jeff, 51 -- were blindsided. Back in the winter, the two had pooled their money together to open a fast-food joint. They named their ice-cream dessert the Sandstorm, a play on Dairy Queen’s Blizzard, and designed an extra-tall drive-through window to accommodate all the sand-hauling truckers rumbling through town.
By the time they opened T&J’s Sandwich Station this May, the sand market was in freefall and the area’s mines were scaling back. It’s only gotten worse since. T&J’s business is down 45 percent. "It’s kind of like almost getting your dreams crushed," Tom said.
The speed with which crude’s plunge is rippling through sand mining communities across the Midwest underscores the economic reach of the shale boom. Back when prices were over $100 a barrel, oil was such an incredible wealth generator that industries, old and new, scrambled to cash in on the bonanza and cater to drillers: From rig makers to the man-camps that housed roughnecks to frack-water recycling companies. Now all of these industries, without exception, are struggling.
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http://www.bloomberg.com/news/articles/2015-09-21/oil-bust-claims-unusual-american-victim-far-away-from-shale-rigs
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Comrade Grumpy
(13,184 posts)HassleCat
(6,409 posts)Desolate outpost carved from the pine forests? The people who live in and around New Auburn will be surprised to hear it described that way. It's right next to the freeway, so it's not what you might call "desolate." The pine forests and Lake Superior are well north of New Auburn. It's farming country, mostly corn fields, although a few stubborn dairy farmers persist in milking cows. My cousin drives a truck for a sand company about ten miles from New Auburn, and he thinks the sand is used for fracking natural gas, not oil. Of course, when oil prices fall, so do natural gas prices, so the basic idea of the article is correct. They sure went over the top in drawing a picture of west-central (not northwestern) Wisconsin as a "wilderness." Too bad Jackpine Radical is no loner with us. He could tell you all about New Auburn.
Wellstone ruled
(34,661 posts)Bloomberg. Everything that appears on their Web Site or Broadcast on their T.V. outlet is a message to certain Hedgee's or Speculators. Grew up about thirty miles from New Auburn,yup,the old LakeLand Conference,and the folks in and around their Community are the hardest working and most honest people in the State. This is a boom and bust business,oil and gas,and Frack Sand is just one of those boom and bust items. Little bit of something,this past Summer,the Frack Sand Companies moved hundreds of their empty Sand Hoppers to storage tracks through out Western Minnesota. When you start seeing these types of things such as empty rail cars parked for months and a time,well that segment of business is not doing to well.
