Demand for silica sand ebbs, flows with oil prices
ST. PAUL — The need for sand to help produce North Dakota oil has fallen with the price of oil, but probably will rise again.
Minnesota Legislative Energy Commission members learned those and other facts Wednesday as they drilled down to find out how Bakken oil fields in western North Dakota affect their state.
Bakken crude has been selling for about $40 a gallon, half what it brought a year ago. While wells still pump about 1.2 million barrels of oil a day, far fewer new wells are being drilled due to low prices.
Those changes have been felt far from the oil patch.
David Christianson, an oil field expert just retired from the Minnesota Department of Transportation, told the commission that Minnesota and Wisconsin sand mining to support oil drilling “is in a lull, but has the potential for a rapid rebound.”
Last year, Minnesota and Wisconsin produced nearly 30 million tons of sand for the hydraulic fracturing method of oil production used in the Bakken. That could fall to about half this year, he said, while production capacity is estimated at up to 70 million tons a year.
While about 90 percent of the sand comes from Wisconsin, some of it is shipped to Minnesota production facilities.
The Wisconsin-Minnesota sand is hard and ideal for getting oil out of hard sandstone that contains decades of oil reserves.
Christianson said there is plenty of sand for North Dakota wells: The Bakken could produce oil for decades, but sand reserves should be available for at least 100 years.
Fracking is controversial. Environmentalists strongly oppose it, in part because that method of drilling requires lots of water. But oil companies struggled to squeeze oil out of the Bakken until fracking was perfected.
Basically, a water-sand mixture is piped into a well, fracturing rocks around the pipe and releasing the oil.
Professor Max Bezada of the University of Minnesota told legislators that federal studies have shown little impact on drinking water, although some drinking water sources have been polluted by fracking.
Bezada said there is plenty of vertical separation between the deep wells and the aquifer.
While the sand mining industry has slowed dramatically, the number of rail cars carrying crude through Minnesota has slumped at a slower pace.
A year ago, up to 58 oil trains — each with about 110 cars and carrying 80,000 barrels of oil — traveled across Minnesota each week. This month, Minnesota officials said that figure dropped to 47 a week.
The train decline was modest because for the most part North Dakota wells continue to pump oil, even if new drilling is slowing.
However, the distribution of trains changed this summer and fall as BNSF Railway Co. diverted some oil trains through Willmar, then through downtown Minneapolis, including under Target Field, home of the Minnesota Twins baseball team.
The state released a new map showing where oil trains traveled in October:
•Up to 19 trains a week took the traditional BNSF track from Moorhead to the Twin Cities through St. Cloud. Up to 44 trains took that route a year ago.
•Up to 23 trains now go through Willmar, then most head to the Twin Cities. Up to eight trains go southwest from Willmar. A year ago those that go south to the Gulf Coast were the only ones traveling through Willmar.
•Once through the Twin Cities, trains go south along the Mississippi River, up to 33 on the Wisconsin side and five in Minnesota.
Some oil is used by two Twin Cities refineries.
Once BNSF wraps up its work for the season, most of its oil train traffic again will go through St. Cloud, MnDOT’s peter Dahlberg said, although some may continue through downtown Minneapolis.
About 60 percent of Bakken oil heads to East Coast refineries, mostly through Minnesota via rail or pipeline.