Mining for fracking sand in Illinois

Mining for fracking sand drives some Illinois farmers from land

Companies quietly skirt LaSalle County ban and are poised to make millions

NORTH UTICA, Ill.—

— The Flynns are weary of bright lights that flood their bedroom each night from a sand mine next door. A second neighboring mine is in the works, and yet another nearby field has just been sold for mining as well.
"I always thought when I died I'd want to be cremated and just thrown around the farm," Cathy Flynn said. "But if everything around me is going to be sand mines anyway, forget it."

This is the other side of the fracking boom. Here, where sand is mined for hydraulic fracturing operations elsewhere in the country, people have two choices: sell or possibly be surrounded by pits.

"You don't want to be an island," said her husband, Larry Flynn.
While a county moratorium forbids new sand mines, area towns and villages have been annexing the land companies have acquired, hoping to reap additional taxes that reduce the burden on residents. The result is that farmers and others like the Flynns — who don't live or vote in those towns yet live next door to the mines — have no say over what is happening around them.

Mining is not new here. But a Tribune review of property sales reveals that sand mining companies have quietly bought at least 3,100 acres in LaSalle County since 2005, a swath larger than nearby Starved Rock State Park. In total, the sand companies own an area the size of LaSalle County's three state parks.

Farmland prices in the LaSalle County area last year averaged $9,100 to $12,700 an acre, according to the Illinois Society of Professional Farm Managers and Rural Appraisers. And people who have sold to the mining companies have done better than that, fetching a median price of about $17,500 an acre, according to the Tribune review. But the mining companies can recoup such outlays in about two to three weeks once a mine is operational.

Dallas-based Eagle Materials Inc., poised to start operating in LaSalle County, estimates it would sell at least 900,000 tons of sand a year from a single mine on 564 acres. At $110 a ton, the company estimates the mine will generate $99 million a year over the next 45 years, according to a state permit application. Analysts who follow Eagle Materials say about $40 of the $110-per-ton price is pure profit.

"Mining frac sand is a lot like mining regular sand except it's wildly profitable, and that's why everyone wants to do it," said Todd Vencil, managing director of equities research at Sterne Agee, a privately owned brokerage firm based in Birmingham, Ala.

The company paid $8 million to buy the land, according to property and state records, and it expects to invest $25 million to $50 million to get the mine running, according to company filings.

The rolling corn and soybean fields near Starved Rock State Park, 95 miles southwest of Chicago, are coveted by multinational corporations for the fine-grain sand deep below the rich soil. Known as Ottawa white, the sand is uniformly circular — perfect for drillers who pump a mixture of sand and chemicals into fracking wells across the nation.

"In the world, there are not that many — geographically speaking — deposits of very high quality northern white sand that has the technical specifications that are in greatest demand. One of those areas is in Illinois, and it's close to the surface of the earth," said Robert Stewart, executive vice president of strategy, corporate development and communications at Eagle Materials.

Local municipalities receive a cut from the sand mining: About 15 cents per ton to start, which amounts to a tax of about 0.14 percent at $110 per ton. In comparison, fracking operators in Illinois are expected to pay a tax of 3 to 6 percent to extract oil and gas.

While LaSalle County has outlawed new sand mines, the companies skirt the law by appealing directly to villages and towns that have the right to annex land and apply their own laws. Various fees tend to figure in to the annexations.

For instance, Quality Sand Products, better known as the Voss mine, owned by local entrepreneur Daniel Voss, agreed to pay 15 cents per ton to the city of LaSalle.

Another mine, proposed by Aramoni LLC, a division of investment firm Woodland Path in Oak Brook, was annexed by North Utica with an agreement to pay a $500,000 impact fee and 20 cents per ton (with 2 percent increases per year) over 40 years.

Unimin, which has two plants in North Utica, paid a $100,000 building permit fee to North Utica after the village annexed land for the company's second mine. The privately held company, which touts itself as the world's largest frac sand producer, has been operating in the county for 34 years and has been buying up land in LaSalle County for most of that time, said Joseph Shapiro, the company's chief operating officer. The company is evaluating a third sand mine for North Utica, he said.

"If we go forward and submit plans to the village of North Utica, we would hope that it would be seen favorably. We've been part of the village for decades," Shapiro said.

The company's $11.2 million property assessment ranks fourth highest in the county, with an annual property tax bill of $990,000, Shapiro said. At its Utica plants, the company employs 88 people at skilled union wages. The company is partnering with a railroad to install additional track to ease crossing delays. The company ships its sand by rail and truck to fracking well locations like Texas and Pennsylvania.

Because of land North Utica annexed for Unimin's second sand mine, residential tax bills declined 8 percent this year, said Gloria Alvarado, mayor of the town, which is often called simply Utica.

"I work at the library here in Utica," Alvarado said. "And people were coming in and saying how happy they were with their tax bill, that it went down."

The annexations largely have left the remaining landowners and farmers to fend for themselves because they live in unincorporated areas.

Such is the case with Phil and Diane Gassman. They live amid a row of homes that is being hemmed in by mining operations. For sale signs dot their neighborhood. Behind them, 300 acres of land graced by waterfalls will become a sand mine. In front of them, a blasting sign is already in place.

"Why stay and keep fighting?" Diane Gassman said. "We've made the decision that we're not going to stay. Nobody else seems to care if this whole area is just one big hole. And I can't just stay and continue to fight if this is what we're going to be living with."

When Gassman said she spoke to the mayor of North Utica about the sand mine approved for the area just beyond her front yard, she recalled saying, "Look, I'm not going to fight this. I'll go away. All I'm asking is that you make sure my property value is safe. You make sure that my well is safe. My children are going to finish school here."

She said the mayor's reply gave her no hope. "I can't help you. You don't live here. You need to talk to the sand mine company," Gassman said she was told. The Gassmans said one mining company implied their property value would be higher someday, because long after the mining company leaves, the pit would be filled with water and become a lake, turning their home into lakefront property.

The project went forward without provisions to help protect homeowners, their property values or their wells.

An adventurous couple who once biked across the country and visited almost every national park, the Gassmans chose this area in which to settle. Diane suspects that some of the people who live in the incorporated areas who voted for the mines have forgotten the beauty of the area.

"Sometimes you may have to pull back from trying to save the world and just try to save the piece of the world that belongs to you," Diane reads from a postcard-size quote that hangs on her wall.

She is trying to fight to at least get a fair price for her home. Then the Gassmans plan to move on, perhaps out West. She and her family don't want to end up like the Bernabeis, who have spent decades fighting companies.

Near Buffalo Rock State Park, the Bernabeis' battles have gone on longer than 40-year-old Mark Bernabei has been alive. First the family fought against a road that was supposed to come through their property. According to family lore, his grandmother sat in a rocking chair with a shotgun in her lap to block construction of the road.

Since then, the family unsuccessfully fought proposed landfills and toxic waste dumps. Now the sand mine operators want to build a pipeline on the property around them.

"You don't see a for sale sign in front of the yard, do you?" Bernabei said. "This is the center of our little farming universe."

Bernabei is emotional about his land, calling it among the richest and most productive food producing land in the nation.

"Can you eat your oil and your frac sand?" asked Mark's mother, Joan, 67.
Yet some mining companies say such buyouts can be a great deal for farmers who want to retire.

"We understand farm prices, the nature of farming, how important the relationship of the farmer to the ground is,'' Aramoni partner Stephen Schuster said. "In a lot of cases, those farm families are in transition as well. Their kids are in college, going to college, and there is no one behind them to farm the land. When we started, farm prices were $6,500 to $8,500 an acre, the prices we paid went up to $20,000."

 

con't....

Unimin's Shapiro said the company often allows farmers to continue to farm and profit from the land while the mining company pays the taxes. Voss, of Quality Sand Products, explained: "You try to take care of your neighbors and look out for them. If they want to sell, you try to look at their property and offer them a fair price. You drill it before you buy it, test the sand. If they've got nice sand under the ground, it will bring one-third more than farm ground. That's good for most people."

The plight of residents who have no voice over what is happening around them has drawn the interest of two law schools in Chicago and a Chicago law firm. They have taken up their fight pro bono.

Yet, for some residents, it's almost too late.

A battle with Mississippi Sand LLC didn't take off until the mine had been approved. Now the Sierra Club and lawyers and students from the University of Chicago are attempting to fight Mississippi's mining permit. The opponents contend nearby residents weren't given a fair hearing in the process.

The Gassmans, part of a group called PUSH (Preserve Utica's Surrounding Habitat), are fighting the Eagle Materials mine near their home. Their battle hinges on whether the sand mine company is illegally mining coal, which they say covers the sand.

Nancy Loeb, director of the Environmental Advocacy Clinic and assistant clinical professor of law at Northwestern University School of Law, says her team of legal assistants plans to fight every permit in an effort to halt the mining.

The Coleman family is part of a coalition of residents being helped by Loeb's team, which has filed suit in an attempt to fight the Ancella Sands mine proposed by Woodland Path LLC in Oak Brook.

Donna and Rick Coleman's daughter, Morgan, 23 — who works at a popcorn shop in North Utica — has a heart condition she's fought her entire life. By age 5, she'd had three surgeries, including open heart surgery.

"I'm a country girl born and raised. My plan was to stay here," she said. "There's a lot of memories here. My sisters climbing trees. Bike rides. We do campfires at night. I like the dark and the stars."

She's told that her heart would not tolerate the tiny particulate matter that can come from the sand mine proposed for land directly across from her home. The sand is like tiny shards of glass that can lodge in the lungs, a condition similar to asbestosis.

Her parents say they would have to move her elsewhere.

"There's something deep down inside of me that says, 'Stand up and fight,'" said Rick Coleman, Morgan's father. His family came to LaSalle County in the 1840s after they were forced from their land in Ireland. "We have the sand that they want in our community. How many more are going to come?"

The demand in the U.S. for frac sand in 2013 was 37 million tons, according to Simmons and Co. International, and it is expected to soar to 57 million tons this year. That's more than six times production levels seen five years ago, according to the U.S. Geological Survey.

On a recent rainy day, the farmers ticked off parcels, with rich black soil, that had been sold to various mining companies. "That parcel just went to Unimin, that parcel just went to U.S. Silica." Visitors to the area might see farmland, not realizing it's owned by mining companies. Farmers say Starved Rock may become an island.

"I believe the concerns for the state park are overstated," said Tony Giordano, president of Mississippi Sand, whose mine is near the entrance to Starved Rock. "There are no fewer than nine current mines adjacent to or within 1 mile of the park, and those facilities have had no impact on the use or enjoyment of the park. I expect nothing to change to the visiting public."

On an unseasonably warm May day, Larry Flynn inflated the tires of his trailer and took off for a day of farming on the land his family has owned for generations.

When he sells his land, Flynn said, it will be for sand mine prices: $50,000 an acre to take what is one of the last pieces of pristine farmland in the area. He knows he has sand under his property. And, Flynn said, if he can't stop the mines, he'll be damned if he'll sell out for farmland prices.
"I get mad, I guess," he said.

jwernau@tribune.com

Twitter @littlewern

http://www.chicagotribune.com/business/ct-sand-mine-fight-0608-biz-20140608,0,642697,full.story

 

Well..you right wingers love ya'll some energy..now you're whining and being seensitive like a tree-hugging liberal.

Don't you realize people need jobs..

 

loving both brings quandry...energy independence + jobs...preserving nature...one thing i will say if you own land be sure you also own the mineral rights on that land...no matter what is found you have claim to it

might as well reap the rewards of drilling/fracking

 

there are no rewards to benefits from fracking.

You are exchanging fresh ground water for a temporary source of energy...the ground water is left contaminated for perpetuity,since many of the chemicals and compounds are toxic for thousands of years.

We need water every 3 days...not fracking.

 

they frack for oil and gas...those are natural resources and if you own the mineral rights to the land then you receive a percentage

if you are concerned about fresh water then you might want to jump on the global warming bandwagon as well...

 

Anybody that is not concerned about fresh water is either bacteria or a damn fool.:smt042

 

well you know those tree hugging types care about global warming...just saying

 

Are you saying climate change isn't real or are you being sarcastic?

 

I was a member of The Sierra Club and this issue, among many others, is a concern of mine. I love our Mother Earth.

 

global warming is very real

 

I think the jury is still out on whether or not global warming is real. I used to be a firm believer in it, now I'm not so sure.

In either case, fresh water is indeed in short supply and these fracking companies are destroying fresh water. That is NOT a good thing.

Can't us highly intelligent beings come up with alternate ways to run our cars, machines, homes?

Oh wait, money is driving all of this. The almighty dollar rules all - even as we destroy our planet bit by bit.

It's really disgusting what humans have done and are continuing to do to nature in all forms, all for the almighty dollar.

 

Environmentalism should be bipartisan issue or better yet, it should be a HUMAN issue.

 

the bible says till the land and care for it.

 

Tilling the land is way different than stripping it of all of its minerals and riches and leaving a vast wasteland of pollution in its place.

 

You gonna give up your car or smart phone?

 

Unfortunately, until I find a job that I can work from home or can walk to, giving up my car is not an option.

I am currently debating about giving up my smart phone actually.

My argument is that we have no choice in what energy we need to drive our cars. Any inventor that comes along with a way to make cars super efficient or not reliance on gas are quickly snuffed out in one way or another.

The only reason we are starting to see hybrid cars is because the car companies see that money can be made from them.

 

Totally agree and the absolute fucked up thing is its perpetuated by dudes who don't even need the money. It's literally insane.

 

It is totally insane.

And what I forgot to mention is that even though car companies are coming out with hybrid cars, they're still priced out of many peoples' ability to buy them.

So, sure, they are offering more fuel-efficient cars with less reliance on gas, but you have to dish out $7-$10,000 more for them.

I wanted a hybrid car, but I couldn't afford to buy one.

 

To be fair the tech and parts are actually more expensive. I looked into one as well.