It sounds like something out of a movie: a Wisconsin farmer wakes up one morning to a phone call asking if he will sell his land for six figures.
But that is exactly what’s been happening in west-central Wisconsin, where Texas energy giants are offering hundreds of thousands of dollars to local residents for mineral rights fees to their land, plus royalties of $1.50 to $3 per ton, simply for their sand beds, according to the Minnesota Fed (by way of Professor Mark Perry’s Carpe Diem blog).
They need the sand for hydraulic fracturing. It serves as a “proppant,” keeping rock fissures open and allowing hydrocarbons to bubble up. Fracking a single well consumes up to 1,600 tons of sand.
But not just any ol’ sand will do. Frac sand requires silica that is pure quartz, with spherical granules—a type of sand that is abundant across large swaths of Minnesota and Wisconsin, the Fed notes.
Here’s where the “sandbox,” as the Minnesota Fed is calling it, is located:
Photo: Minnesota Fed
“Without [sand frac], this business wouldn’t be open,” said Steve Pomahatch, a part-time employee [in Maiden Rock, Wi] who recently sold [a grocery store] after running it for 17 years, adding that mine jobs are vital to sustaining the community of only 120 people. “The frac sand mine is the best thing that’s ever happened to this village,” he said.
There’s still some resistance from local residents — in Maiden Rock, the Village Board and a concerned citizens group oppose Wisconsin Industrial Sand’s plans to double the acreage of its mine. The citizens group has filed a lawsuit to stop the expansion.
But the industry’s brought a lot of relief.
“Unemployment in Barron County, Wis., topped 11 per cent at one point during the recession. But since 2010, sand mining companies have invested hundreds of millions of dollars in the predominantly rural county—making its economic development director bullish on the future.
“Frac sand is the biggest and best thing that’s happened in our lifetime in Barron County,” one resident said. “I see frac sand becoming one of the county’s biggest sources of [business] revenue, moving forward.”
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.