Sand is used for practically everything. It is used in roofing shingles, sandpaper, in various construction tasks, in certain types of paint, and it is even used in toothpaste. Anything that needs a little grit has some kind of sand in it to make it that way.
A number of years ago, the demand for frac sand exploded in southeast Minnesota. This caused a lot of mines to open, as well as processing facilities so that the sand could be shipped off across the country for fracking operations.
While the demand has cooled off a bit this year, the sand demand as a whole is starting to grow, especially where it is needed in the construction industry.
As roofing operations are picking up with the economy and so are building projects, sand miners and processors are seeing a growth in the need for the sand that is used in the manufacturing of shingles and in other construction tasks.
It’s rather astounding how many industries outside of the sand industry are impacted by the growing need.
As the demand grows, new equipment is going online. This means that the companies that mine the sand need more machinery as their staff grows with the demand, which then keeps the companies that are manufacturing, selling, and renting out the equipment quite busy. Now it is expected that the demand for more sand is going to increase nearly 5 percent until the year 2016. It is very possible that the demand could rise above that and continue to grow past 2016.
In the fracking world, there are some operations that are growing, while there are others being left idle. At first, the fracking companies would need the frac sand so badly that they would buy the sand raw. This meant they would buy it unsorted and unwashed. As this commodity becomes more available, the buyers are looking for a higher quality product. Quality is important no matter what kind of sand it is or what it is used for. However, the buyers of frac sand are now specifying the grain size and looking for the cheapest way for the highest quality sand to be transported.
In Minnesota, frac sand is highly regulated, which has actually sent some of the business to Wisconsin where the regulations are not as tight. This has resulted in a tale of two states. There is a lot of controversy involved, but it is a controversy that those in the construction industry are not too impacted by. Nonetheless, there has been a battle within Minnesota cities and counties to regulate or even stop operations with several of the counties approving moratoriums or placing limits on the number of active mines. It’s an argument that reached the state Capitol this past spring where a statewide moratorium was imposed. How the battle carries out will be interesting.