Collins to work toward increasing visitation to Arkansas by groups and promoting the state's appeal
Five years into the exploration for natural gas in the Fayetteville Shale, most Arkansans know about the hydraulic fracturing process and its links to environmental havoc, including poisoned wells and radioactive wastewater in various parts of the United States and increased earthquakes here in Arkansas. Now, a mushrooming side industry is beginning to attract national attention to farming communities in Wisconsin and Minnesota. This industry drains waterways and creates hundred-acre gashes where there once was forest, hills and pasture, and it can pollute the air and water with invisible toxic particles. It's called frac sand mining, and on a quieter scale, it's also happening — and on the verge of expanding — in North Arkansas.
The process, which environmentalists have compared to mountain-top removal coal mining, involves scraping or blasting a hole about 50 to 100 feet in width and depth to access high-purity silica. During the fracking process, the silica is added to a mixture of water and chemicals and pumped, at high pressure, into natural gas mines to open cracks in shale plates. This type of silica is only found in a few states. Wisconsin and Minnesota have larger deposits than Arkansas, but Minnesota's regulatory system is complex enough to deter many corporations. Neither state has Arkansas's home field advantage, since frac sand from the Ozarks only has to travel about 100 miles to reach the Fayetteville Shale.
Thomas Woletz, with the Wisconsin Department of Natural Resources, estimates that there are more than 75 active frac sand mines in his state, and there could be as many as 100. Fewer than three years ago, there were only five, and some of those were decades old. There have been a couple of large sand and water spills in Wisconsin, and a Chippewa Falls group, Chippewa Concerned Citizens, sued the city in an attempt to stop a frac sand processing plant that was eventually constructed inside city limits.
Frac sand mining in Arkansas looks nothing like it does in Wisconsin. Only one company, Guion's Unimin, is actively mining frac sand. But in the past three years, despite low natural gas prices, the Arkansas Department of Environmental Quality has issued frac sand mining permits to 10 companies, largely concentrated in Izard and Independence counties. Locals say there are other companies that have yet to apply for permits. Last year, the Batesville City Council approved plans for a Florida-based company, American Silica, to lay railroad track for a $15 million frac sand processing plant at the north end of a public park. About 15 residents from the Spring Valley neighborhood, near the proposed plant, showed up at the council meeting to oppose the decision. In a setup similar to that of Chippewa Falls, the plant would handle sand mined 14 miles away in Cave City.
Because of oversupply, natural gas prices began to drop in 2008, hitting the lowest point of $1.91 per 1,000 cubic square feet (mcf) in April 2012. But by early January, prices had already risen to $3.46 per mcf. According to Bill Holland, an editor with Platts, which publishes energy news for McGraw Hill, recovering prices don't always translate into increased fracking. In documents filed with the Securities and Exchange Commission, Southwestern Energy, the largest presence in the Fayetteville Shale, announced plans to cut spending in Arkansas by 19 percent in 2013.
But as Sheffield Nelson, a former gas executive who spearheaded Arkansas's natural gas severance tax drive, has reiterated in press conferences, fracking operations represent billions in investment dollars. Huge corporations are looking to ride the waves rather than get out, to the point that they're often willing to drill new wells even when they're not fracking, in order to maintain active leases, he said.
This may explain why U.S. Silica, which owns 13 mines, including a frac sand mine in Sparta, Wis., recently purchased 477 acres in Izard County. The company has an active permit on file at ADEQ, but according to company spokesperson Michael Lawson, there are no specific plans to begin mining. "I would say that we are holding the property for future development," he wrote in an email.
In April 2012, the U.S. Department of Energy gave the green light to a Louisiana plant to transform natural gas to liquid, paving the way to pipe U.S. surplus to Europe and Asia. It's a process that's likely several years off, according to Holland. But Nelson thinks it's a crucial first step in stabilizing the industry long-term. "What we're seeing now is just a dead period, something that the business understands. They have peaks and valleys. And it looks to me like ... we won't see things even out until liquefied natural gas plants are functional," Nelson said.
In Arkansas, the purest sandstone lies in the White River watershed — a swath of Ozark foothills, tourist communities and stagnant rural towns. Calico Rock is among the second. It's growing, albeit more slowly than official figures suggest, since the last census included a prison annex. Historic Main Street includes an artist co-op, an antique shop and a dry goods store with an old-fashioned soda shop. According to Steve Vinson, who has lived in Calico Rock for seven years and run Calico Rock Realty for four, most of the growth is from an influx of retirees. "There's not a lot of property moving between folks already in the county ... [for younger people] we're not a very strong attractant. We don't have the industries that are creating jobs right now," he said.
Barbara Carlson, a retired software engineer from Chicago, has been instrumental in educating her Calico Rock community about frac sand mining. In January 2008, she and her neighbors began to hear industrial noise coming from Mill Creek, a tributary of the White River. "We asked the people living next to Mill Creek, and they said 'They're digging right into the creek.' And we knew that was going to be a problem because that's just not something you do. It's very sandy, and all that comes down the creek," she said.
As it turned out, a group called B&H Resources was clearing land to build a frac sand mine. Carlson alerted the advocacy group Friends of the North Fork and White Rivers, and the Friends alerted ADEQ.
B&H didn't have a permit for the thousands of feet of creek bank it cleared, which caused sediment to wash into Mill Creek and threaten the bass population. ADEQ issued a cease and desist order and asked B&H to re-vegetate the bank — a process that B&H had not begun in October 2009, when James Hardy, the "H" in B&H, appeared at a town meeting that Carlson helped organize at the Calico Rock Music Hall. The meeting was to discuss mining permit applications filed by Hardy's new company, Evergreen Processing.
About 130 people turned out, and a number of them mentioned the unfinished re-vegetation. The general sentiment was summed up by one commenter, who said, "I think it's reasonable to require this company to rehabilitate the Mill Creek site before issuing another permit." An attending Evergreen representative mentioned a re-vegetation plan that was awaiting ADEQ approval.
According to ADEQ, B&H did eventually re-vegetate the creek bank, but not long after, an arsonist torched the new trees. Carlson is surprised that ADEQ considers the Mill Creek matter resolved. "It's heartbreaking, because when this area floods, the cleared part continues to erode and wash downstream ... you get used to it after awhile, but it's not like it was," she said.
It is five days before Christmas, and the storefronts in Calico Rock are dark. The night before, a windstorm took out electrical lines, and now only the hardware store stirs, as people pay for propane they've loaded on pick-ups out back. Carlson is walking this reporter through Peppersauce Alley, the only ghost town in America located within city limits. She points out an old cotton gin, mentioned in a couple of John Grisham novels. The conversation turns to Evergreen.
At that Music Hall meeting three years ago, a company representative said that the mine would employ about 30 people for roughly 25 years. There have been two more public hearings, in early 2010 and 2011, to discuss revised plans. In early 2012, local media reported that Evergreen had begun clearing land. Then things stalled. David Williamson, geologist for Evergreen, told the Arkansas Times that for the past year, the company has been developing a customer base, securing financing and negotiating sales agreements. "I don't have a firm schedule, but I think it'll be within the next year. Just to construct a plant and get things ready, that's a matter of four to six months," he said. He expects the processing plant and access roads to cover about 320 acres, and the quarry itself to cover between 50 to 100 acres (likely widening as it's mined) on Twin Mountain. Once the quarry is dry, the company plans to fill the hole with pine vegetation saved from the clearing.
Jerry Weber, a Friends of the North Fork and White Rivers board member, said Arkansas needs stronger laws to ensure that these quarries are reclaimed. "With Arkansas law the way it is, as long as they say they have an intent to continue mining in the future, they don't ever have to resurface over the thing ... . In fact, one of the restoration options they have, if they did want to close the mine, would be to leave a huge open pit and taper the sides of it, like a mini-lake. So they're not putting that ground back on there," he said.
Under the Arkansas Open-Cut Land Reclamation Act, non-depleted mines can avoid reclamation by perpetually renewing permits. A lack of mining activity, even stretching into decades, is not a valid reason for ADEQ to deny those permits. Quarry regulations are even looser, allowing companies to request temporary closure that lasts for an indefinite period. This means that even without active permits, the companies don't have to begin reclamation.
On the other hand, Weber counts his dealings with Evergreen as successful, thus far. Originally Evergreen planned to use 390,000 gallons of water a day, drawn from 2,000-foot wells. It was a potential threat to the water table and nearby family wells. But the Friends convinced the company to construct a holding pond and reuse much of its water. Evergreen will still draw spring water to make up for water lost in processing, and its permit does allow the release of wastewater to "a tributary of Piney Creek ... thence to the White River," with the caveat that no discharge may contain chemicals or solids, and discharges should be sampled and monitored.
Carlson remains skeptical. "I do think that Evergreen has made a lot of changes in their plans in order to be more conscious of the concerns of the people in town. But I hope that the sand mining never starts here," she says as we cross the footbridge back to Main Street, trading a celebrated ghost town for one trying to stay alive.
Thirty-six miles south, Guion looks nothing like picturesque Calico Rock, despite the fact that both cities are built on bluffs overlooking the White River. At various times the city has supported a steamboat landing, a newspaper and a golf club manufacturing plant, but now there's nothing but a shoebox-sized post office, churches and sand processing plants. Guion's century-old sand mine was purchased by Belgian-owned Unimin Corp. in 1970.
"When houses are up for sale, Unimin buys them," said a 49-year-old public servant, who grew up in a house 500 feet from Unimin's plants and who wished to remain unidentified. "They knocked down a whole row of houses to build that frac sand plant. The mine built that town, and now it's strangling it." He remembers choking when the wind blew and blasts that rained rocks on cars and houses. He said his parents' cars stayed covered in sand so thick you could write sentences in it.
From 1980 to 1990, Guion's population shrank by half, from 177 to 93, and by 2010 the population had dwindled to 86, with median household income just under $26,000. In the past four years, the mine has expanded three times, including the construction of a 2012 resin coating plant. The public servant appreciates the 108 jobs Unimin provides (52 of which are directly related to frac sand), but the mine cost his grandmother two husbands. Her first husband died of silicosis from mining dust, and his grandfather died in a sand tunnel, bludgeoned by a boulder.
In his living room, he pulls up a Facebook page entitled "If you lived in Guion Arkansas or know someone in Guion." The group has 313 members, dozens of vintage photographs and a single event listing — a March 2012 meeting about a petition to remove the dam on Rocky Bayou, an offshoot of White River known to locals as Guion Creek. This dam spurred the public servant to join the Friends, but his lifelong connection to the mine that still employs his friends and relatives encourages him to keep his membership secret.
ADEQ documents are unclear, but Unimin apparently dammed Guion Creek in 1970 and raised the height of the dam in 1990 to supply water to the plant. The ADEQ has investigated multiple complaints about scum and odors from the now stagnant creek. In 2007, 2008 and 2012, Unimin was cited for permit violations, including unapproved discharges into Rocky Bayou, unprotected storm drains, valves left open and lapsed record-keeping.
"When Unimin dammed up the creek, it reduced the flow to a trickle and the swimming hole dried up. So we want them to take the water from the White River, but the company seems incredibly reluctant to do this," said the public servant. Online comments echo those made at the meeting: "Such a terrible shame the kids there can't enjoy it like we used to," Carol Waters Hutchins posted, under a black and white picture of more than a dozen grinning kids, bunched together on a sandy shore in late-'60s swimwear.
The public servant and his family are planning to move to Batesville. They live in Mount Pleasant, sandwiched between frac sand-mining operation Bluebird Sand and the property now owned by U.S. Silica. "That's going to be another frac sand mine. I bet it'll be as big as Unimin, and no one around here knows anything about it," he said.
A neighboring landowner told the public servant that U.S. Silica had contacted him about purchasing his property. "They're telling him to sell, that there's definitely going to be a sand mine, and he won't like living next to it. It's sell or sue, and he could lose all his money trying to stop them," the public servant said. The company would not confirm an attempt to purchase land: Land acquisition is "not something U.S. Silica would disclose based on competitive considerations," Silica spokesperson Lawson said.
Bluebird Sand, which is locally owned, is a touchier topic. In the Calico Rock hardware store, a woman behind the counter who declined to give her name told this reporter, "We don't know anything about the frac sand mines. We just stay out of it." When pressed she acknowledged that, "One of our son-in-laws owns a mine, so we just don't say anything about it." That son-in-law is Blaine Johnson, one of the developers behind Bluebird.
Bluebird began mining at some point in 2010, without air and water discharge permits. In November and again in December, a retention pond malfunctioned, spilling sludge into East Lafferty Creek and burying a portion of it in silt. At least 59 fish were killed in a single day. ADEQ sued the company, which temporarily halted operations and paid a $125,000 fine. The mine closed again a year later, after being cited by the ADEQ for operating a sand dryer without an air permit. Both times, Bluebird's 41 employees were laid off without severance, and both times, the Friends tipped the ADEQ.
Around that time, the Friends drafted an ordinance creating a position for a county inspector who could close mines that operate outside regulations. They presented it at a meeting of the quorum court, arguing that ADEQ doesn't have enough inspectors to keep up with the entire state. (ADEQ has one mine inspector and 20 regional water inspectors). "ADEQ has done a good job helping us deal with these issues, but the only way they become aware of problems is when a person calls them. It's not a proactive thing, it's a reactive thing. The damage can happen so quickly, and then how do you fix it?" said Carlson.
The ordinance never made it past discussion. "The quorum court won't do anything in this area because of the same problem that I've got," said the public servant. "They know these people and live with them. It would take something major to happen, for them to pass an ordinance."
But Carlson thinks the division is as much about culture as it is about jobs. "There weren't a lot of rules here until very recently, so there's a certain resistance from people who have been here for generations. Having the government tell you what to do, even if it's for your own protection, they don't like that," she said. The breakdown is fairly predictable. Those of working age, or who have relatives of working age, often want the mines. Those who retired to a pastoral refuge want it to remain as such.
"The general consensus is, we're proud they're there," said Izard County Judge David Sherrell. "If everything's going smooth, we try not to be involved with the mines unless they need something from us." In 2009, the quorum court unanimously endorsed economic incentives for Unimin to expand into frac sand mining. Williamson said that Evergreen has already taken several dozen calls from job seekers, despite the fact that the company hasn't even broken ground. Sherrell acknowledges some complaints, primarily from people living directly beside mining sites.
Vinson thinks frac sand may revitalize entrepreneurship in the area and even drive up property values, especially for properties suspected of containing frac sand. "Because of the lakes and the White River itself, we're still going to attract retirees, because compared to many other states, land is cheap here. Until we have a real uptick in the mining, raising the price of land, there's going to be an attractant ... until there's any particular indication from the mining process that would give some idea that maybe it would be unsafe for them," he said. He has been contacted about land for another frac sand project, but he can't disclose any details.
Ed Alexander, a former Arkansas State University music professor who retired to Izard County, views mining as an economic shortcut. "The real growth is through people like myself buying vacation homes or retirement homes ... . You can make the argument that 22 jobs in a sand mine certainly more than displaces jobs in the construction of new and vacation homes in the tourism industry. And the general willingness of people to move to this area is going to be impacted, wondering, is there going to be a sand mine two miles from my house?" he said.
In fact, if things go according to his neighbor's plan, there will be a frac sand mine less than half a mile from his house. A few years ago Joe Collins, an optometrist living in Jacksonville, bought about a thousand acres next to Alexander's property and began testing core samples for frac sand. Alexander learned of Collins' plans secondhand and later found an investment proposal for Petros Energy online. A phone conversation with Collins confirmed the plan, so Alexander spread the word to roughly 50 households in a three-mile radius — the area where he thinks property values would be most affected. Collins refused to talk to the Arkansas Times about Petros, saying only that the company hasn't done any mining or even applied for permits yet.
Alexander believes that Petros may never materialize. "There may not even be any sand ... the guys taking the core sample said they didn't find any," he said. But he worries that amateur efforts may lead to another B&H/Bluebird-flavored episode, resulting in environmental trauma. Other neighbors are worried for more personal reasons.
"There's a couple that lives at the end of Red Sanders Road, and they're extremely private people. But they contacted me and asked if I could meet with them, and they showed me their view. If Dr. Collins builds a mine, instead of a view, they'll be looking at a processing plant. It's just not fair that someone can come in to enrich themselves at the detriment of a lot of other people," Alexander said.
In the spring of 2011, 16 legislators formed the Fayetteville Shale Caucus to advocate for the fracking industry on behalf of its economic benefits. Because frac sand mining is still largely speculative here, it hasn't warranted much attention from them.
Sen. David Wyatt (D-Batesville), who represents Izard and Independence counties, said while the caucus hasn't spent much time discussing frac sand mining, he thinks of the frac sand as a boon for the area. "If it creates jobs, I don't see it as a problem," he said. He termed the fine paid by the Bluebird mine "extraordinary, since what happened was like what happens in nature, when there comes a big rain and sand gets flushed back into the creek."
His Izard County colleague in the Senate, Sen. Missy Irvin (R-Mountain View), also welcomes frac sand mines. At a caucus meeting last February, she said she had worked with the ADEQ to help Bluebird Sand secure permits. "My district ... has a very large deposit of sand, which is used for fracturing ... and there's going to be an influx of those. Right now we have, I believe, two or three slated to operate, open up business ... so it's really going to dramatically change the landscape and everything," she said.
Emily Lane, an environmental advocate from Faulkner County, attended the caucus meeting. "I think it's funny how she means it will change the economic landscape, but clearly we all know it will change the natural landscape as well," she said.
Local nonprofits such as the Sierra Club, Arkansas Policy Foundation and the Arkansas Wildlife Federation refer frac sand questions to Friends of the River — and the group does seem more versed on the matter. But Weber is quick to distance the Friends from a blanket anti-mining sentiment. "We want any business that's done here to be done in a way that it doesn't destroy the environment, because we still have such high water quality in the Ozarks. We believe if we work with industry, we can get them to change their processes, like we did with Evergreen ... . We don't want to keep them from doing this, but to do this in a way that it doesn't interfere with environment," he said.
For Ed Alexander, the debate hits home because the Ozarks are home. He just wants to protect his land and that of his neighbors. "I've hiked the area that [Petros] is proposed for, and it's incredibly beautiful. It has a small stream, canyons on both sides. It's beyond my imagination why anyone would want to destroy it ... . It's impossible to put a dollar value on the peace people feel when they visit or live in this area. That has a value as well," he said.
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