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Research & Commentary: Study Highlights the Massive Importance of Oil and Gas Industries, Via Silica Sand Mining, to the Wisconsin Economy

September 3, 2021

Industries Provided 4 Percent Of State Employment, 4 Percent Of Labor Income, 5 Percent Of Economic Impact

new report commissioned by the American Petroleum Institute (API) and undertaken by PricewaterhouseCoopers (PwC) has found the oil and natural gas industries directly or indirectly supported over 158,000 jobs in Wisconsin in 2019, or 4.2 percent of the total share of state employment. Further, the oil and gas industries produced $8.9 billion in labor income, which was 4.1 percent of the state total share, and had a statewide economic impact of $16.8 billion, for 4.8 percent of the state total share.

“As America’s economy comes back, the natural gas and oil industry will serve as the foundation for long-term growth and prosperity,” API President and CEO Mike Sommers said in an accompanying press release. “Every state across the country – both blue states and red states – rely on American energy to fuel each sector of the economy and support millions of U.S. jobs. This study reinforces that America’s economic outlook is brighter when we are leading the world in energy production, and it serves as a reminder of what’s at stake if policymakers restrict access to affordable, reliable energy and make us more dependent on foreign sources.”

The importance of the oil and gas industries to the Wisconsin economy, primarily through the mining of sand used in the hydraulic fracturing (“fracking”) process, is crystal clear, yet that doesn’t stop environmental activists and state policymakers from looking for ways to curtail mining in the Badger State, or to go even further and eliminate it altogether. This would be disastrous for Wisconsinites.

report released in November 2019 by the Global Energy Institute (GEI) at the U.S. Chamber of Commerce details how a ban on hydraulic fracturing (colloquially known as “fracking”) across the country would have a devastating consequences for the Wisconsin economy. According to the study, if a fracking ban took place, Wisconsin would experience the cumulative loss of 300,000 jobs thanks to higher residential and business energy costs and upstream production losses, as well as $93 billion in lost gross domestic product (GDP), and a $8.3 billion loss in state and local tax revenues by 2025. Over that same period, Wisconsin households would experience a $51 billion loss of income and Wisconsinites would suffer a per capita cost-of-living increase of $4,777.

“Wisconsin has abundant resources of sand that have been mined for the petroleum industry for more than 100 years,” the GEI study notes. “Wisconsin is by far the largest producer of industrial sand in the nation, a market driven by sand used in the hydraulic fracturing process. High quality sand mined in southwestern Wisconsin is sought after for enhanced recovery in the hydraulic fracturing of oil and gas formations. Over the last decade, with the rise of shale oil, the frac sand industry has flourished to create jobs and economic opportunity, particularly in western Wisconsin….The Wisconsin Industrial Sand Association states that ‘companies involved in Wisconsin’s sand mining industry employ thousands in family-supporting jobs and are making significant, multimillion-dollar investments in areas across Wisconsin, generating hundreds of millions of dollars in overall economic impact to the state and in local communities.’”

Mining in Wisconsin is an indispensable part of life. It is not a threat to tourism, scenic beauty, or property values. While citizens will have their concerns about the silica sand mining process. The frac sand mining process has become a significant driver of economic growth in Wisconsin and, if done in a safe and]environmentally responsible manner, it will be an important source employment and earnings for decades to come.

The following provide more information on industrial silica sand mining, hydraulic fracturing, and fossil fuels.          

Impacts of the Natural Gas and Oil Industry on the U.S. Economy in 2019
https://www.api.org/-/media/Files/Policy/American-Energy/PwC/API-PWC-Economic-Impact-Report.pdf
This study, conducted by PricewaterhouseCoopers and commissioned by the American Petroleum Institute, shows that the natural gas and oil industry supported 11.3 million U.S. jobs in 2019, produced $892 billion in labor income, and had a nationwide economic impact of nearly $1.7 trillion The study also shows the natural gas and oil industry has had widespread impacts in each of the 50 states.

What If…Hydraulic Fracturing Were Banned? (2020 Edition)
https://www.globalenergyinstitute.org/sites/default/files/2019-12/hf_ban_report_final.pdf
This study from the Global Energy Institute at the U.S. Chamber of Commerce says a ban on fracking in the United States would be catastrophic for our economy. Their analysis shows that if such a ban were imposed in 2021, by 2025 it would eliminate 19 million jobs and reduce U.S. Gross Domestic Product by $7.1 trillion. Tax revenue at the local, state, and federal levels would decline by nearly a combined $1.9 trillion. Natural gas prices would leap by 324 percent, causing household energy bills to more than quadruple. By 2025, motorists would pay twice as much at the pump for gasoline as oil prices spike to $130 per barrel, while less domestic energy production would also mean less energy security.

America’s Progress at Risk: An Economic Analysis of a Ban on Fracking and Federal Leasing for Natural Gas and Oil Development
https://www.api.org/~/media/Files/Oil-and-Natural-Gas/Hydraulic-Fracturing/2020/fracking-ban-study-americas-progress-at-risk.pdf
The study from the American Petroleum Institute (conducted by economic modeling firm OnLocation)  warns that banning federal leasing and fracking on public and private lands, which some presidential candidates have proposed, would cost up to 7.5 million American jobs in 2022 alone, lead to a cumulative GDP loss of $7.1 trillion by 2030, slash household incomes by $5,400 annually, increase household energy costs by more than $600 per year and reduce farm incomes by 43 percent due to higher energy costs. If a ban is enacted, the U.S. would flip from being a net exporter of oil and petroleum products to importing more than 40 percent of supplies by 2030.

Environmental Impacts of Industrial Silica Sand (Frac Sand) Mining
https://www.heartland.org/policy-documents/environmental-impacts-industrial-silica-sand-frac-sand-mining
The rate of silica sand mining in the United States has increased in recent years, due in large part to the tremendous growth in hydraulic fracturing for oil and gas using horizontal drilling techniques. Some environmental activist groups and community organizers contend silica sand mining presents significant threats to human health and the environment. Scientific evidence strongly refutes such claims. Silica sand mining has minimal environmental impact, involves virtually no public health risk. Authors Isaac Orr, a research fellow at The Heartland Institute, and Mark Krumenacher, is a principal and senior vice president of GZA GeoEnvironmental, Inc., and is an important part of domestic energy production that has substantial economic benefits. They conclude silica sand mining can be done in a safe and environmentally responsible manner with the proper oversight and environmental protections. 

Economic Impacts on Industrial Silica Sand (Frac Sand) Mining
https://www.heartland.org/policy-documents/economic-impacts-industrial-silica-sand-frac-sand-mining
Hydraulic fracturing for oil and natural gas production has dramatically increased the demand for industrial silica sand, known as “frac sand,” available in great abundance in the Upper Midwest. As new sand mines and processing facilities are proposed, the policymakers and citizens of counties with frac sand resources are being asked to evaluate the potential economic benefits and costs of industrial sand mining. In this Policy Study, the second in a series addressing frac sand mining topics, Heartland Institute Research Fellow Isaac Orr and geologist Mark Krumenacher address the key issues with which local policymakers and their constituents must contend.

Roadway Impacts on Industrial Silica Sand (Frac Sand) Mining
https://www.heartland.org/policy-documents/roadway-impacts-industrial-silica-sand-frac-sand-mining
As many as 9,000 non-metallic mines operate in Illinois, Iowa, Minnesota, and Wisconsin – approximately one mine for every 3,000 residents. Until recently, those mines have operated without opposition. But industrial sand mining recently has become a more contentious issue as environmental groups have taken note of the growing number of mines meeting the growing demand for the industrial silica sand used in oil and natural gas development, referred to as “frac sand.” In this Policy Study, the third in a series addressing frac sand mining topics, Heartland Institute Research Fellow Isaac Orr and Mark Krumenacher, a senior principal and senior vice president of GZA GeoEnvironmental, Inc., specifically address the potential impacts of frac sand mining on public roadways.

Social Impacts of Industrial Silica Sand (Frac Sand) Mining: Land Use and Value
https://www.heartland.org/policy-documents/social-impacts-industrial-silica-sand-frac-sand-mining-land-use-and-value
The “social” impact of sand-mining operations, including their impact on land use, scenic beauty, and property values, can be a sensitive topic. Emotion and opinion, rather than technical facts and scientific data, tend to dominate the discussion. Heartland Institute Research Fellow Isaac Orr and Mark Krumenacher, a senior principal and senior vice president of GZA GeoEnvironmental, Inc., take the sensitive nature of this topic seriously and address it thoughtfully in the enclosed Policy Study, the fourth in a series addressing frac sand mining topics. Orr and Krumenacher briefly discuss the importance of mining and raw materials in our lives and explore concerns commonly expressed about mining as an industry. They describe four ways local elected officials can understand the emotional reactions a community might have to a proposed new development – mental noise, perception of threats, elements of trust, and dominance of negatives – all of which can make it difficult for individuals to examine an issue rationally and can cause them to become unnecessarily concerned.

Debunking Four Persistent Myths about Hydraulic Fracturing
https://www.heartland.org/publications-resources/publications/debunking-four-persistent-myths-about-hydraulic-fracturing
This Heartland Institute Policy Brief by Policy Analyst Timothy Benson and former Heartland communications intern Linnea Lueken outlines the basic elements of the fracking process and then refutes the four most widespread fracking myths, providing lawmakers and the public with the research and data they need to make informed decisions about hydraulic fracturing.

The U.S. Leads the World in Clean Air: The Case for Environmental Optimism
https://files.texaspolicy.com/uploads/2018/11/27165514/2018-11-RR-US-Leads-the-World-in-Clean-Air-ACEE-White.pdf
This paper from the Texas Public Policy Foundation examines how the United States achieved robust economic growth while dramatically reducing emissions of air pollutants. The paper states that these achievements should be celebrated as a public policy success story, but instead the prevailing narrative among political and environmental leaders is one of environmental decline that can only be reversed with a more stringent regulatory approach. Instead, the paper urges for the data to be considered and applied to the narrative.

Climate Change Reconsidered II: Fossil Fuels – Summary for Policymakers
https://www.heartland.org/publications-resources/publications/climate-change-reconsidered-ii-fossil-fuels---summary-for-policymakers
In this fifth volume of the Climate Change Reconsidered series, 117 scientists, economists, and other experts assess the costs and benefits of the use of fossil fuels by reviewing scientific and economic literature on organic chemistry, climate science, public health, economic history, human security, and theoretical studies based on integrated assessment models (IAMs) and cost-benefit analysis (CBA).

The Social Benefits of Fossil Fuels
https://www.heartland.org/publications-resources/publications/the-social-benefits-of-fossil-fuels
This Heartland Policy Brief by Joseph Bast and Peter Ferrara documents the many benefits from the historic and still ongoing use of fossil fuels. Fossil fuels are lifting billions of people out of poverty, reducing all the negative effects of poverty on human health, and vastly improving human well-being and safety by powering labor-saving and life-protecting technologies, such as air conditioning, modern medicine, and cars and trucks. They are dramatically increasing the quantity of food humans produce and improving the reliability of the food supply, directly benefiting human health. Further, fossil fuel emissions are possibly contributing to a “Greening of the Earth,” benefiting all the plants and wildlife on the planet.

 

Nothing in this Research & Commentary is intended to influence the passage of legislation, and it does not necessarily represent the views of The Heartland Institute. For further information on this subject, visit Environment & Climate News, The Heartland Institute’s website, and PolicyBot, Heartland’s free online research database.

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