PUBLIC OWNERSHIP OF PG&E

New California bill could end PG&E's power monopoly

After 109 wildfire deaths, six felony convictions, and two bankruptcies, will PG&E get another chance?

Author: Brandon Rittiman

Updated: February 4, 2020

SACRAMENTO, Calif. —

After causing deadly wildfires and widespread blackouts the Pacific Gas and Electric Company will have to face a new effort to end its monopoly over power service to 16 million people in California.

Sen. Scott Wiener (D-San Francisco) announced he’s introducing a bill Monday which would convert PG&E, the nation's largest power company, into a publicly-owned nonprofit utility.

PG&E is in its second bankruptcy, is serving time on probation for six federal felonies, and has caused disasters that killed at least 117 people since 2010.

"I feel like there’s just zero accountability," said PG&E customer Alison Buchanan. "They don’t respect their customers. They don’t respect the state. They don’t respect the laws. They don’t respect the lives of anybody."

Buchanan, a self-described conservative, would like to see PG&E taken over by the government. That may still be a long-shot, but the idea is officially on the table in the state legislature as of this week.

So, how would a takeover work? What kind of a fight would the supporters be in for?

We took a deeper dive into the efforts underway to end PG&E's monopoly — both at the local and statewide level.

HOW THE TAKEOVER WOULD WORK

PG&E says its power lines and poles are not for sale, which means any government takeover would be hostile.

The state government has several tools at its disposal.

The state has the power to revoke PG&E's license to operate its monopoly. It also has the power to force PG&E to sell its poles and wires by condemning them under eminent domain law, which would require the government to pay fair market value.

Staffers familiar with Weiner's proposal prefer the potentially cheaper idea of having the state buy all of PG&E's shares of stock, which had a closing value of $8 billion as of the end of January.

However it happens, the idea is not to create new state agency. The new utility would have its own independent governing board, similar to a giant version of Sacramento's nonprofit electric provider, SMUD.

The new utility would pay for the takeover using revenue bonds. Similar to taking out a home loan, the new utility would borrow the money it needs to buy out PG&E, which would be repaid in small increments over the course of decades by the customers on their bills.

This plan is to offset this added cost by eliminating the profit that PG&E is allowed to collect from customers.

(Read the full proposed California bill below)

GOV. NEWSOM NOT ON BOARD, AT LEAST NOT YET

Gov. Gavin Newsom (D-California) ramped up his rhetoric against PG&E when the company's wildfire prevention blackouts caused chaos for days on end for millions of Californians throughout the month of October.

"PG&E, that company no longer exists," Newsom said at a speaking engagement in January. "There's gonna be a new company or the state of California's going to take it over.”

In an interview with ABC10, Wiener was clear that his plan is contingent on winning support from the governor.

"Nothing is going to happen if the governor hasn't signed off on it," Wiener said.

Despite his harsher language, Newsom's position on PG&E hasn't changed. He still wants PG&E to remain an investor-owned utility (IOU) that's "reimagined."

"That new company is going to be transformed," Newsom said. "And I think in five or 10 years, I think that IOU potentially could make every one of us proud, and it could be a model for the rest of the nation if we do our job."

Newsom has repeatedly threatened that he's prepared to back a government takeover if the company doesn't make sufficient changes, but he has not named a specific trigger that would cause the company to lose his support.

PG&E is used to getting its way at the state capitol. The governor and more than eight out of 10 state lawmakers — from both major parties — took campaign donations from the utility.

RELATED STORIES:

• Governor Newsom, most state lawmakers took money from convicted felon PG&E
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• Most California Congress members took PG&E money. Did yours keep it?

Newsom has said that the $208,000 PG&E donated to help him become governor do not influence his decision.

A handful of lawmakers decided to part ways with the money they received. Wiener, the sponsor of the bill to end PG&E's monopoly, did not return his $4,000 contribution. 

"If they wanted to write me a check, a contribution that's fine. But clearly my record is of long-term conflict with PG&E to the point where they spent money to try to prevent me from coming to the Senate," Wiener said. "In the end the question is, 'What are you doing? How are you voting? What bills are you authoring? Are you enabling PG&E, or are you fighting them?'"

PG&E WILL FIGHT HARD

Pushback against PG&E dates back to the early 1900's when the company grew into its massive monopoly by gobbling up competitors.

In 1923, the voters of Sacramento decided they wanted out, but it would take 23 years of fighting in court with PG&E to finally break away and start SMUD.

The fight is still as challenging today. Right now, at least four localities are trying to do the same thing, including PG&E's hometown of San Francisco. The water authority in the Central Valley community of Manteca has been trying to exit PG&E for 16 years.

"We want to buy the poles and wires and we want local staff to operate those for the benefit of our neighbors," said Peter Rietkerk, who runs the South San Joaquin Irrigation District.

SSJID provides water to Manteca and the orchards that surround it, but the district is not a newcomer to selling electricity.

"We've been generating power and providing it on the bulk electric market for 50 years," Rietkerk said.

After years of fighting for approval from a local board that coordinates government services, SSJID made an offer of $116 million to buy the poles and wires in its area.

"We made that offer in 2016 in May to PG&E. PG&E summarily rejected it," Rietkerk said. "They said their assets are not for sale."

THE BANKRUPTCY STANDS IN THE WAY

When SSJID tried to force PG&E to sell its local poles and wires through eminent domain, the company punched back with lawsuits.

"We had the local approval we needed to purchase PG&E's assets," Rietkerk said.

But the plan hit a snag: All those poles and wires generate about $1 million dollars a year in local property taxes from PG&E. The water district’s plan was to cover that loss by paying local governments the difference.

PG&E sued, saying a government power provider shouldn’t be able to pay taxes.

"They made the argument that we constitutionally can't do that," Rietkerk said. "I would say it's a technicality."

The water district lost at the district level and appealed to a higher court. PG&E blocked that appeal by filing for bankruptcy, which comes with an automatic freeze of all lawsuits.

SSJID and others have made bids in bankruptcy court to buy portions of PG&E's grid, but the company has so far rejected all offers.

"PG&E's facilities are not for sale, and changing the structure of the company would not create a safer operation," PG&E said in a written statement to ABC10.

Critics disagree.

"PG&E is PG&E. It's a culture that has not changed. It's not going to change," said Jeff Shields, who ran SSJID before Rietkerk's tenure.

Shields points out there are 45 municipal power utilities in California and "none of them have felony convictions."

WHAT HAPPENS TO PG&E WORKERS?

Apart from the company's own words, the most visible opposition to the idea of a takeover has come from labor unions representing PG&E workers.

Wiener says his plan aims to keep the same wages and benefits for PG&E's workforce.

"We need to make sure that that all of the union contracts with PG&E workers simply transfer over to the new entity," Wiener said. "We don't want to impact the workforce in any way. And there's no need to. Whether it's a privately owned utility or publicly owned we still need this workforce."

One possible way to accomplish that would be to model the takeover of PG&E after what happened to the now-defunct Long Island Lighting Company in New York.

In the 1980's New York's legislature decapitated — figuratively speaking, of course — the management of the utility by replacing it with a government authority.

The line-level employees became employees of a third-party company hired under a management contract by the authority.

"The employees today of PG&E, they're not the problem... they're doing what their management tells them to do," said Barry Moline with the California Municipal Utilities Association. "The majority of PG&E's 24,000 employees could stay in a private company that is beholden to and serves a few hundred senior managers."

PG&E DECLINES TO SAY WHY IT DESERVES ANOTHER CHANCE

PG&E declined repeated requests to be interviewed for this story, but provided the following written statement:

PG&E is committed to delivering safe and reliable gas and electricity to the 16 million people we serve. It is our primary responsibility and our core business. PG&E’s facilities are not for sale, and changing the structure of the company would not create a safer operation.

We remain firmly convinced that a government takeover does not serve the interests of all customers in the communities we serve. We remain focused on fairly resolving wildfire claims and exiting the Chapter 11 process as quickly as possible. PG&E is committed to working with all stakeholders to make the necessary changes moving forward to build a stronger and safer PG&E and be the company our customers and communities want and deserve. 

The statement does not address a core issue raised by PG&E's critics, who argue the company's history of crimes and safety problems shows it does not deserve any more chances.

"PG&E has had many opportunities to to get its act together, and it hasn't done so. And then when it tries to get its act together, its way of doing it is to turn off the lights for millions of people causing a lot of harm," Wiener said. "It's a company that has proven over and over again that it should no longer have the privilege of operating as a monopoly investor-owned utility. That's a privilege. It's not a right."

PG&E customer Alison Buchanan agreed.

"I mean how many chances do you have to give somebody," Buchanan asked. "It's kind of like, how many times do you have to let a criminal out of jail before he kills somebody? And… they have."

ABC10 asked PG&E to address this criticism, sending the question: "Given PG&E's history of federal crimes, deadly disasters, and substantially higher-than-average rates: why does PG&E deserve another chance right now?"

In response, a PG&E spokesperson resent the same written statement that appears above.

---30---

PG&E pushback: New California bill would ban utilities from making political donations

Eight out of 10 state lawmakers took donations from PG&E, even after the company was convicted of federal crimes.

Author: Brandon Rittiman
Published: 8:59 AM PST February 5, 2020

SACRAMENTO, Calif. — California state lawmakers will consider banning PG&E and other corporate utilities from making campaign contributions under a bill being introduced Wednesday by Assemblymember Kevin Kiley (R-Rocklin.)

PG&E is bankrupt, serving time on probation for six federal felonies, named as the cause of disasters that have killed 117 people, and under criticism for mishandling widespread blackouts that were intended to (but may not have) prevent more fires.

The company, which holds a government-backed monopoly over 16 million people, also charges rates that are double the national average.

"This was, above all, a political failure," Kiley said on ABC10's Morning Blend Wednesday. "As PG&E now seeks to emerge from bankruptcy, the most important restructuring is to loosen its grip on the state Capitol."

ABC10's investigation of the issue found that political organizations and candidates accepted more than $4 million in donations from PG&E in the 2018 election cycle, despite the fact that the company had recently been convicted of six federal felonies.

More from ABC10: 
Governor Newsom, most state lawmakers took money from convicted felon PG&E
Most state lawmakers took PG&E money, did yours keep it?
After 109 wildfire deaths, California Congress members still took money from PG&

Kiley's bill would ban PG&E and all other investor-owned electric utilities from making campaign contributions to political candidates in California. It would not ban donations to issue-based campaigns or other political organizations.

"These are very unique entities. In many ways [utilities] behave like arms of the state. They're granted monopolies over whole regions, they seize property through eminent domain, they have a guaranteed rate of return," Kiley said. "For them to then turn around and spend millions of dollars in campaign contributions to determine who those state officials are doesn't make a lot of sense."

Kiley's bill joins other efforts to crack down on PG&E that include tighter restrictions on planned blackouts and a proposed government takeover of the power company, the nation's largest, which was introduced by Sen. Scott Wiener (D-San Francisco) earlier this week.

More than eight out of 10 state lawmakers, including Kiley and Wiener, accepted campaign funds from PG&E.

Kiley donated his $4,000 in PG&E contributions to charity. Only a handful of elected officials, including Democratic House Speaker Nancy Pelosi have chosen to take that action.

Most lawmakers and the governor have chosen to keep their PG&E donations.

"If the suggestion is somehow I'm influenced by that, you're wrong," said Gov. Gavin Newsom, who received $208,400 in donations from PG&E.

The proposed ban on future contributions from utilities would take a 2/3 vote to become law, which is a high bar in a building where nearly everyone receives money from those utilities.

"I would personally advise each and every member to return those funds," Kiley said.

Continue the conversation with Brandon on Facebook.

Judge to PG&E: 'What good are inspections that don't find problems?'
The judge handling PG&E's punishment for federal crimes demands answers to dozens of questions ahead of a hearing to add more terms to the company's probation.

Author: Brandon Rittiman
Published:  February 4, 2020

SAN FRANCISCO — The federal judge supervising PG&E's punishment for federal felonies demanded names, inside information about what the company knew before it sparked deadly wildfires, and an admission that the utility's inspection problems are cause for concern.

U.S. District Court Judge William Alsup peppered PG&E with 46 specific questions, many of which focused on the fact that an old worn-down hook broke and sparked the deadliest wildfire in California history.

The Camp Fire killed 85 people and destroyed more than 14,000 homes in and around the town of Paradise in 2018. A state investigation found that PG&E had to fix the same kind of problem in the same location where the Camp Fire sparked years earlier.

ABC10 was able to find similar wear to hooks on other parts of the same power line. The judge demanded to know why PG&E's inspections in the month before the Camp Fire failed to find the wear on the hooks when the company was able to find dozens of examples after the fire.

"It is obvious from the nature of the C-hook gouging that this issue would have
been visible to any inspector who got close enough to see the condition of the C-hook," Alsup wrote.

Alsup demanded that PG&E send him the "the ten most pertinent emails, memos, text messages or other

Alsup demanded that PG&E send him the "the ten most pertinent emails, memos, text messages or other documents (including electronic documents) that show the true extent to which PG&E knew before the Camp Fire that C-hook wear was a safety problem."

Alsup also asked more questions about the 2019 Kincade Fire, which destroyed hundreds of homes in Sonoma County during the October 2019 power blackouts, which were supposed to prevent wildfires.

The cause of the Kincade Fire is officially under investigation, but PG&E has acknowledged that a jumper cable detached from its high-voltage transmission tower where the fire started. It's the same kind of equipment that sparked the Camp Fire.

RELATED CONTENT:
State regulators detail PG&E ‘failures’ leading to deadly Camp Fire
After 109 wildfire deaths, California Congress members still took money from PG&E
Judge demands answers from PG&E after Kincade Fire

Alsup demanded names and contact information for the inspectors that climbed that tower in the months before the fire started and accused PG&E of dodging his previous question about whether the failure to locate the problem in advance is worth worrying about.

"Shouldn't we be concerned that the inspections conducted by PG&E failed to detect the potential detachment on the tower in question," Alsup asked. "What good are inspections that don’t find problems?"

PG&E's answers are due Feb. 18, the day before it appears in Alsup's court to defend itself against possible new probation terms that would require the company to hire more employees to trim trees for fire safety.

IN-DEPTH: The story behind PG&E's shutoffs: Fire - Power - Money. Inside California's burning crisis and how it's going to cost us all

FRANK ZAPPA LIVE IN BARCELONA BLASPHEMY

How one Utah community fought the fracking industry — and won

WRITTEN/PHOTO BY Tara Lohan / The Revelator January 23, 2020

The land around Red Knoll near Kanab, UT that

 could have been razed for a frac sand mine.

Kanab took an unconventional path to face down a frac sand mine that threatened the region’s aquifer.

A sign at the north end of Kanab, Utah, proclaims the town of 4,300 to be “The Greatest Earth on Show.”

It’s a rare case of truth in advertising.

Kanab sits just seven miles north of the Arizona state line, at the crossroads of some of the Southwest’s most beautiful places. In every direction a geologic wonderland awaits. To the north is Zion National Park with its breathtaking valley of 2,000-foot-tall rust and white sandstone cliffs. The sweeping expanse of Grand Staircase-Escalante National Monument stretches to the east of town, and just to the south you’ll find the Grand Canyon’s North Rim.

You don’t even need to leave Kanab, which is ringed by the famously red-hued Vermillion Cliffs, to get socked by jaw-dropping beauty.

It’s this landscape that drew Susan Hand to Kanab 25 years ago when she opened Willow Canyon Outdoor to sell gear, maps, books and coffee to local and visiting adventurers. And it’s this landscape and the community’s gateway-to-the-wonderland experience, the economic bedrock of this tourism-dependent town, that she worried would be destroyed by a new industrial project proposed for development 10 miles north of town last year. 

Kanab, Utah, is a popular tourist destination.

 (photo by Tara Lohan / The Revelator)

There, a company called Southern Red Sands LLC had announced plans to build a facility to mine and process massive amounts of sand for use by oil and gas companies conducting hydraulic fracturing. The sand is a lesser-known but substantial aspect of the fracking process. Round grains of silica sand serve as a “proppant” to keep underground fissures in the shale open as oil and gas are pumped out. Fracking a single well can require thousands of tons of sand.

“I really wanted to keep an open mind, but the more I learned about the project, the more concerned I got,” Hand told The Revelator when I visited Kanab in September.

She had reason to be worried. The first decade of the fracking boom relied heavily on so-called “frac sand” sourced mostly from Midwest states like Minnesota and Wisconsin, where mining reduced verdant green hills to piles of dust. 

Frac sand in Wisconsin. (photo by Tara Lohan / The Revelator)

But mining in the Midwest has its limits. Sand is expensive to ship across the country, so as fracking has taken off in Utah, Texas and New Mexico, companies have looked to find more local sources to trim costs.

That’s when the proposed mine in Kanab entered the story.

Southern Red Sands, a two-person start-up backed by Utah real-estate developer Kem Gardner, hoped to establish the region’s next frac sand mine in a scenic area of state-owned lands outside Kanab called Red Knoll.

City and county officials quickly gave their blessing — and a combined 1,200 acre-feet of water rights a year — after only cursory consideration.

But residents became concerned about impacts to scenic beauty, water resources and local businesses. They teamed up to fight back, forming a community group called Keep Kanab Unspoiled.

It was beginning to feel like a familiar story.

The struggle between extractive industries and environmental protection is not a new one in Utah. A fight is still raging nearby over the boundaries of Bears Ears National Monument and Grand Staircase-Escalante, both of which President Trump slashed in order to increase drilling and mining opportunities.

Despite public pushback and some legal challenges, though, the frac sand mine seemed to be cruising toward approval as recently as October. It still needed an environmental impact assessment from the Bureau of Land Management, and the two water transfers needed approval from the state engineer. The project definitely wasn’t a done deal, but in industry-friendly Utah, it had a good shot.

So it may have come as a surprise to a number of residents when Southern Red Sands announced at the beginning of January that it was abandoning the proposed project.

What happened? And are there any lessons that other communities fighting extraction threats can learn?

“Speak out, pull together like-minded neighbors, organize and don’t give up,” Hand told me after hearing the news. “But also, try to be nice.”

Surprisingly, it’s that last bit that may have made a big difference — along with a good hard look at the economics of the endeavor.
The threats

Von Del Chamberlain is a white-haired, soft-spoken Kanab resident. Born in 1934, he spent his youth exploring the red rock and his career studying the stars. The astronomer and former director of Salt Lake City’s Hansen (now Clark) Planetarium retired to his hometown 15 years ago and hoped to start a public observatory.

He realized that Kanab’s prized dark-night skies would be threatened by a 24-7 mining operation. But that wasn’t even his biggest concern with the project.

“The beauty here is the thing that will sustain this area economically for as far in the future as we can possibly see,” he said.

Opponents like Chamberlain usually cited two big concerns: environmental impacts, particularly the threat to water resources, and the local economy. But in Kanab it’s hard to separate the two.

“It doesn’t matter what kind of an economy you want to develop here,” said Hand. “Even if you have an industrial economy or an extractive economy — if you don’t have water, you’re out.”

The water supply, which draws on underground aquifers, currently supports the town’s tourist-driven economy, ranching, and the county’s biggest employer — Best Friends Animal Society, known worldwide through the Dogtown TV series on the National Geographic Channel. The nonprofit owns a 3,700-acre sanctuary, the country’s largest no-kill animal shelter, and would have been the mine’s closest neighbor.

Best Friends, which employs 400 locals and draws 35,000 out-of-town visitors a year to its sanctuary, came to see the proposed mine as an existential threat. Their property relies on wells, seeps and springs that come from the same aquifer the project’s two wells would tap. 

Groundwater seeps to the surface at the Best Friends animal sanctuary

 in Kanab, Utah. (photo by Tara Lohan / The Revelator)Last July Kanab’s city council approved a 50-year contract for 600 acre-feet a year of water rights for the project and Kane County Water Conservancy District, which oversees water servicing for the unincorporated areas of the county, agreed to provide an additional 600 acre-feet of water. That combined amount equals about 740 gallons per minute, although Southern Red Sands contended it would use only about a third of that.

Many local residents were shocked by the water-rights transfer. A 2016 water needs assessment found that Kane County Water Conservancy District’s reliable supply would be in deficit by 2035. And the district’s executive director, former state representative Mike Noel, has been a vocal advocate for a pricey proposed pipeline to send Lake Powell water to southern Utah communities, including near Kanab, under the premise that the region is already running short on water.

“We knew that it would damage our seeps and our springs, and we weren’t sure yet the full impact besides some drawdown to our groundwater, but we were really concerned,” Bart Battista, an environmental engineer responsible for facilities management at Best Friends’ Kanab sanctuary, told me. “It boggles my mind that the city wasn’t as concerned.”

But documents unearthed by local radio station KUER showed that officials at nearby Zion National Park already were concerned that the project could reduce flows into the East Fork of the Virgin River, which flows through the park, by reducing the amount of water from underground seeps and springs that feed the river.

Wanting to learn more about how the project could affect the region’s water, Best Friends commissioned a study from hydrogeologist Kenneth Kolm of Hydrologic Systems Analysis, a firm that’s completed water studies for other Utah towns.

Kolm found that the mine posed the potential for decline in productivity to wells owned by both Best Friends and the city’s water supply. The project could also decrease flows into nearby Kanab Creek and dry up perennial streams and springs, including one that feeds an area of habitat that’s home to the Kanab ambersnail — currently federally protected as endangered.

The amount of water being withdrawn wasn’t the only issue. The proposed project site and its sandy soil are also vitally important to local hydrology.

“The sand is the first ticket to collecting water,” said Hand. It captures rain and holds it in place long enough for it to sink into the water table and not run off. But the sand is exactly what would be removed from the site, further threatening the region’s water supply.

“I realized for the first time how small and vulnerable our watershed actually is,” she added.

Southern Red Sands hoped to start digging on 640 acres of land around Red Knoll, an aptly name rise of coral-colored rock and sand. The area is managed as part of Utah’s School and International Trust Lands Administration (SITLA), where state-owned property can be leased (often for resource extraction), with revenue being funneled to education.

The operation would have started by bulldozing all the trees, shrubs, grasses and forbs, then scraped up to 30 feet of the earth from the exposed surface. The sand would then be processed — washed with water and chemicals, then dried and sorted — in a facility with up to six 120-foot-tall silos. After that it would be loaded into trucks and hauled out.

A small fraction of the remaining sediment — mostly the fine silts and clays — would be put back on the land. But that change in geology could mean a big change for the aquifer. How big would depend on the scope of the project, though.

In addition to the SITLA land, Southern Red Sands had acquired placer claims — mineral exploration rights — for 12,000 surrounding acres managed by the BLM. And although the company said it planned to mine only 700,000 tons a year from the SITLA property, the facility would have had the capacity and water rights to accommodate much more.

“If they’re building a plant with a capacity of 3 million tons a year, that’s presumably because they expect to be able to produce that,” Dean Baker, a Kanab resident and opponent of the project told me in December. “They may never do that, but you don’t build extra capacity without the idea that you might use it.”
The resistance

Water issues are paramount in arid Utah, but the mine was likely to come with some other potential problems.

If Southern Red Sands did build out to end of their claims, they’d be within 10 miles of Zion National Park and workers at Best Friends would be looking over their fence line at the operation — not to mention potentially breathing its dust.

Mining, processing and trucking frac sand can release tiny particles of crystalline silica into the air. Inhaling those particles regularly can cause lung disease, including cancer and silicosis, a chronic disease that, like “black lung” for coal miners, can be deadly.

Dust in the air at a frac sand processing facility in Wisconsin. 

(photo by Tara Lohan / The Revelator)

The facility would likely run with lights and noise 24-7, which could be detrimental to wildlife. And adding more diesel-spewing, slow-stopping big rigs hauling 50,000 pounds of sand down the town’s one main road concerned residents, too.

With so much at risk, opponents employed a number of tactics to try to fight the mine.

Keep Kanab Unspoiled held community meetings. They invited Kolm, the geologist who did the independent study, to report his findings, and started an online petition to discourage the company from moving forward.

Best Friends — an established national nonprofit with considerably more financial resources — took the lead role in mounting legal challenges. The organization filed an appeal of a conditional use permit approved by the county and formally objected to the water transfers, which needed to be approved by the state engineer.

But during the fall, Best Friends decided to shift tactics. Lawsuits could just lead to years of legal battles, something beyond the organization’s longstanding mission.

“We might alienate our donors and members,” Battista explained. “The appeal of Best Friends crosses party boundaries — animal welfare is something everybody can support.” Apparently environmental action is not.

They decided the best approach was to sit down and talk with the company and its backers.

Battista couldn’t disclose details of the negotiations — which went on for months — but on Jan. 9 Best Friends and Southern Red Sands released a joint statement saying that the company “had decided not to pursue its business ventures in Kane County.”

The members of Keep Kanab Unspoiled were elated by the news.

“It’s so heartening how so many people from our community came together to amplify a voice that is seldom acknowledged by our elected representatives and institutions,” Hand tells me. “I’m relieved that an area I love won’t be sacrificed on the altar of fossil fuel consumption. I’m grateful that this threat to our travel and tourism economy is diminished.”

It would be comforting to think that the driving force behind the decision boiled down to preserving the scenic beauty or the region’s groundwater resources, but it’s more likely it had to do with money.

“Economics played some role,” Battista said. “The market for frac sand has changed and [Best Friends] had financial viability assessments of the project to show that the mine wouldn’t be a good idea. Economically it just didn’t make sense to any of us. I think that our studies corroborated that.”

This was a main talking point of Keep Kanab Unspoiled, bolstered by research done by Baker, who also happens to be an economist and cofounder of the Center for Economic and Policy Research.

The frac sand industry — and the larger fracking industry — is volatile. The number of rigs drilling for oil tends to fall when prices get low. Rigs plunged with falling prices from 2014 to 2016 and last year saw record declines in rig numbers. In addition, fracking costs more than traditional drilling — and the industry has also been overspending to keep the fracking boom from going bust.

A research organization in Norway found that the amount of money being spent to drill for oil by 40 U.S. shale oil companies outpaced the money being made by selling that oil. That deficit cost companies almost $5 billion in just the first quarter of 2019, DeSmog reported in August.

It’s a scenario that’s happened before.

With oil prices now around $60 a barrel, the industry is hanging on. If prices dip much lower, it could be trouble. A decade into the fracking frenzy, investors are worried that the best spots have been drilled and many debts won’t be paid.

There’s even more uncertainty when it comes to producing and selling the sand. Companies used to rely almost exclusively on Midwest sand, but now more areas are getting in on the game.

The consequences of failures in the fracking business model are real.

Falling oil prices and a shifting market for frac sand recently took down Emerge Energy Services — owner of eight frac sand facilities in Wisconsin — which filed for bankruptcy last summer and left behind unsafe levels of arsenic and heavy metal contamination for the community to clean up.

That’s a scenario that Baker worried could happen in Kanab. Southern Red Sands said their intended market was in Utah’s Uintah Basin 350 miles north, but a new frac sand mine just opened in the basin. “It’s almost inconceivable they’d be able to compete with them because the biggest cost with frac sand is the shipping,” said Baker. “There are some operations in the San Juan basin [in New Mexico and Colorado] but it’s not clear to me that they could beat those out either.”

Even though economics played a role in halting the project, he believes community efforts were important, too.

“The fact they faced serious legal obstacles at every step in their path had to be a factor,” he said. “It is a nice, and unfortunately rare, victory for the environment.”

Best Friends worked to ensure the hard-earned victory wasn’t short-lived, either. It also purchased Southern Red Sands’ 12,000 acres of mineral rights.

“We want to make sure that no one else comes in here in two years if the market’s better and tries to put in another sand mine, we just don’t think that it’s the right thing for this area,” says Battista. “We want to make sure that in perpetuity, there’s not a threat to the sanctuary.”

As for Hand, she’s now looking at the bigger picture. She saw the fight over frac sand in Kanab as a microcosm of the global fight over fossil fuels and climate change.

“While we can embrace a sense of triumph, it’s likely to be brief,” she says. “When it comes to protecting wild places and using our resources carefully, our work will never be done. The next development project is already bubbling. I do feel more hopeful for each success, but climate change marches on.”

This article was produced by The Revelator, an online news and ideas initiative of the Center for Biological Diversity. It is republished here with permission.

Digging Deeper: Eight Questions About Southern Red Sands

By DAVID FUCHS • SEP 23, 2019


The view from the base of the Red Knoll in Kane County, 

where start-up mining company Southern Red Sands

 seeks to create a "frac sand" mine.
DAVID FUCHS / KUER


KANAB — A proposed mine for sand used in oil and gas extraction has stirred tensions and spurred questions in this small town just north of the Arizona border since the City Council voted in July to provide water to the project.

The mine’s opponents say local officials did not fully evaluate the mine’s potential impact on the area’s water, air and traffic. They also argue that the mine, which would produce at least 700,000 tons of sand per year, could threaten the city's aquifer and Best Friends Animal Society, a neighboring animal sanctuary that is the city’s largest employer.

Meanwhile, speculation and distrust have surrounded the company behind the mine, Southern Red Sands. The company, which has described itself as a start-up, has the financial backing of Gardner Company, the Salt Lake City-based real estate developer. Its chief executive, Chad Staheli, says his company is complying with all regulations. With the protest period for the city’s water service agreement ending on October 2, KUER looks at the origins of the company.

What is Southern Red Sands? 

Southern Red Sands is a frac sand mining operation based in Kane County. The company has two full-time employees. The rest of the team consists of consultants and contractors, CEO Chad Staheli said in an interview with KUER.

The company began, however, in February 2018 with a different name, Integrated Logistics, according to business records filed with the state. The organizer of the company was J.T. Martin, a former Salt Lake City Council member and high-ranking executive of Integrated Energy Companies. Known as IEC, the energy company provides services to oil and gas companies in the Uintah Basin, among other functions. The company’s chairman is Kem C. Gardner.

Who are its backers? 

The principal investor in Southern Red Sands is Gardner Company. The company describes its real estate portfolio as one of the largest in the state. Staheli said the only other investor is Vere Capital — a small investment management company he helped start seven months before he joined Southern Red Sands.

The Gardner Company asked Vere Capital to evaluate the frac sand mining project, shortly after the Integrated Energy Companies purchased the mining claims in 2018, Staheli said.

Soon after, the three companies decided to spin off the mining operation as a standalone company, rather than as a subsidiary of Gardner Company or IEC. Staheli accepted a position as the company’s CEO.

Staheli calls the company a “start-up” because none of the parties have specific experience with frac sand mining.

“If I was really trying to spin something, I wouldn’t call this a ‘start-up,’” he said. “I’d call this a ‘Gardner Project’ because they have the operational history to give a community like Kanab the comfort to know they’re getting taken care of.”

Who else is involved?
The other Southern Red Sands employee is Andy Gant, who besides being its operations manager also serves as a Kane County commissioner. The dual role has raised questions among residents about potential conflicts of interest.

Kane County Clerk Karla Johnson confirmed that Gant filed to run for county commissioner in March 2018 — the same month he started his position with Southern Red Sands, according to his LinkedIn profile.

Johnson added that it was widely known during Gant’s candidacy that he was working with the mining company and described the commissioner as an “open book,” adding that she “has always known him as an honest man.”

Staheli also dismissed any suggestion of impropriety.

“If somehow it benefits us, Southern Red Sands, to have Andy Gant as a county commissioner, I haven’t seen it,” he said. “If it exists, it’s something that’s nebulous and out there and I haven’t seen the real effect of it.”

Through a recent marriage, Gant is also related to Mike Noel, a polarizing former state representative who currently serves as the executive director of the Kane County Water Conservancy District.

The two became in-laws in December 2017 when Mike Noel married the sister of Andy Gant’s wife, Rhonda Gant, who also serves as the county’s human resources director.

Southern Red Sands CEO Chad Staheli says that sand is a “logistics play.” His company is strategizing that their relative proximity to the Uintah Basin will give them an edge over competition from Wisconsin and Minnesota. But as other sand operations set up even closer to their target market, Staheli says Southern Utah’s superior sand and warmer weather will allow the company to turn out a higher quality product all year-round.

What’s in a name? 

Between May and July 2018, the mining company took on two new names.

The first change was from Integrated Logistics to Integrated Sands in May 2018. Around that time, Martin told conference attendees of the Governor’s Energy Summit, “We have some of the best frac sand in the country,” adding that “We are calling this ‘Utah pink Champagne.’ The Wisconsins have nothing on us,” according to the Salt Lake Tribune.

But that name didn’t last long. Less than two months later the company switched to its current name.

Staheli explains that the name changes reflect a marketing decision to differentiate their product from fracking sand mined in the Great Lakes region, which is often referred to as “Northern White” by industry insiders.

“The transition from business to business is nothing more than a change in business name — same involvement, same people,” he said, adding that the investors and ownership structure have remained consistent throughout the project.

What is “frac sand”? 
Hydraulic fracturing or “fracking” is a method of extracting oil and gas from low-permeability rock formations. It works by using pressurized fluids to create fractures through which oil and gas can flow. Fracking operations use what's called a “proppant” to hold those fractures open. Sand, or “frac sand,” is a naturally occuring proppant. The majority of the country’s frac sand comes from the Great Lakes region.

What does Southern Red Sands plan to do?
The company’s production facility is being designed to yield 700,000 tons of sand per year. The mine could be retrofitted, however, to include an additional production line if there is sufficient demand, Staheli told KUER.

As planned, the operation will feature four 120-foot storage silos. But a conditional use permit issued by the Kane County Planning and Zoning Commission allows the company to build up to six silos.

The commission’s decision rankled residents during its July 11 meeting, as pre-meeting documents provided by the county showed the mine would be limited to two silos. Southern Red Sands and Kane County both say the discrepancy resulted from a typo committed by the county while preparing the information packet.

Where will the company mine? 

Southern Red Sands holds the mining permits to 640 acres of land surrounding Red Knoll, which sits roughly 10 miles north of Kanab. Lease records indicate that Southern Red Sands’ precursor, Integrated Sands, purchased the permits from a New York-based mining company in May 2018.

The land is owned by the State of Utah School and Institutional Trust Land Administration, or SITLA, and functions as private land managed by the state to generate revenue for education. It is not subject to environmental regulations that exist for public land.

The company will restrict its mining to a 100-acre section of the SITLA parcel until the sand supply is exhausted, which Staheli expects to last between five and 10 years. The mine will then expand its operation onto adjacent Bureau of Land Management parcels if the demand for fracking sand still exists. Staheli has stated publicly that his company has purchased mining claims across 13,000 acres in the surrounding area. He says this a strategy to prevent potential competition from developing other sand mines.

How much water will it use? 

Southern Red Sands says that extracting and processing that much sand will require roughly 400 acre-feet per year of water. The company will have access to up to 1,200 acre-feet per year, pending approval by the state engineer of water service agreements it has signed with Kanab and Kane County Water Conservancy District.

Where will the sand be transported? 

The target market is the Uintah Basin, where oil and gas operations use between 1.1 million and 1.4 million tons of fracking sand each year, Staheli said.

Southern Red Sands is also considering shipping sand to the San Juan Basin in Northwestern New Mexico. However, Staheli says the option is not yet economically viable due to insufficient demand and road restrictions that would limit maximum truck weight.

Correction: 1:43 a.m. MDT 9/24/19. Oil and gas operations use between 1.1 million and 1.4 million tons of fracking sand each year. The Southern Red Sands production facility is being designed to produce 700,000 tons of sand annually.

David Fuchs is a Report for America corps member who reports from KUER's Southwest

RELATED CONTENT

Thousands Sign Petition Against Gardner Company's Support Of Southern Utah Frac Sand Mine

By DAVID FUCHS • AUG 26, 2019

UTAH GEOLOGICAL SURVEY
A petition calling on Gardner Company to cut off its support 

to a controversial frac sand mine outside Kanab has picked 

up over 2,600 signatures.

UPDATE: Controversial Southwest Utah Frac Sand Mine Moves Forward

DAVID FUCHS • JUL 11, 2019 Southern Utah News Bureaus


A hand-painted sign alerts Kanab residents to a City Council meeting at the local library. The council voted during a July 9 meeting to conditionally approve a controversial water service agreement for a proposed frac sand mine.
DAVID FUCHS / KUER

Updated 3:00 p.m. MDT 7/11/19

A controversial frac sand mine proposed in Southwest Utah is poised to move forward after local officials gave the go-ahead this week on the sale of water and a conditional use permit.

The Kane County Planning Commission voted Wednesday night to issue the permit to Southern Red Sands, LLC, which has plans to operate the mine just north of Kanab.

The permit listed 48 conditions the company must follow to minimize the impact of the proposed mine on the county. The process is a standard procedure for new works on county lands.

However, according to Kane County attorney Rob Van Dyke, the site is ultimately outside of county jurisdiction, as the operation would be located on land managed by School and Institutional Trust Land Administration, or SITLA.

The county’s conditions will be passed onto SITLA for further review.

Original Story:

The conditional approval passed Tuesday hinges on the Kanab city attorney’s review of potential liability if problems arise from the project, which would mine and process sand across a 55-acre area roughly 10 miles north of the city.

Frac sand is a naturally occurring “proppant” used to hold open fissures created by hydraulic fracturing operations in oil and gas extraction. The company says it plans to ship the sand for use in the Uinta basin.

Hundreds of residents attended the four-hour hearing and expressed concerns that city officials had not gathered sufficient information about how the project would affect the town’s water supply or alter the area’s landscapes.

Despite the pushback, city officials say the project is poised to move forward.

“Regardless of what we do here tonight, this project will go forth,” Kanab Mayor Robert Houston told the crowd before the vote. “The ultimate decision will be made by the State Engineer.”

The operation is being proposed by Southern Red Sands, LLC, a start-up mining company based in Salt Lake City. The company owns over 500 other mining claims across 12,000 acres near the proposed site, according to The Diggings, an online database of past and current mining claims.

Southern Red Sands officials estimate that the project would create as many as 40 jobs, though some will be shift work and technical positions. Trucking will be outsourced. The company has already leased the potential mine site — a 640-acre property south of Highway 89, which includes a feature known as “Red Knoll.” The land is currently managed by the School and Institutional Trust Land Administration, or SITLA, an independent agency that manages state trust lands to generate revenue for schools, universities and hospitals.

The first public discussion of a water service agreement between Kanab and Southern Red Sands, LLC took place at the Kanab City Council meeting on February 12, 2019.

Under the water agreement approved Tuesday night, Kanab City will sell the company 600 acre-feet of water per year, one-third more than the project’s estimated use of 400 acre-feet per year. The company has a separate agreement in place with the Kane County Water Conservancy District for an additional 600 acre-feet per year.

The City Council voted to amend the service agreement so that liability will be placed or shared with the company if problems arise from the operation. The company cannot be held liable as the current agreement stands.

Critics voiced concerns that the mine could deplete the aquifer, increase truck traffic, hurt tourism, damage the area’s aesthetic beauty and could eventually expand beyond is current scope based on the company’s nearby holdings.

Bart Battista, a retired Marine Corps officer who was previously the lead environmental planner for Camp Pendleton, one of the largest Marine Corps bases in the United States, said that the mine cannot move forward without two critical components: a well, which must be approved by the state engineer, and an access road, which requires approval from the Bureau of Land Management.

“For some reason the city is being blind to that and just thinks that they don’t have a choice and that they can’t influence this process,” he said. “And I believe the county thinks the same way.”

Battista currently manages the facilities at Best Friends Animal Society, a no-kill animal sanctuary which is the largest adjacent property owner to the proposed mining site.

City officials said they believe the city has sufficient water to make the sale and that selling its water is the best way to maintain a voice in the project moving forward.

David Fuchs is a Report for America corps member who reports from KUER's Southwest Bureau in St. George.

ALBERTA BASED FRAC SAND COMPANY WORKING IN SHALE OIL PLAYS IN THE DUVANERY AND MONETY BASINS 

News Releases

Athabasca Minerals Inc. – Amended Annual Information Form

January 10, 2020

 Download PDF

Click here to View Full Version of Amended AIF in PDF

January 10th, 2020 - EDMONTON, ALBERTA. Athabasca Minerals Inc. (“AMI” or the “Corporation”) – TSX Venture symbol: ‘AMI’ – announces that it has filed an amended and restated Annual Information Form (AIF) on SEDAR on January 10th, 2020.

The AIF changes from the original (filed October 3rd, 2019) incorporate updates from the Technical Report for the White Rabbit Property, associated with AMI’s Duvernay Premium Domestic Sand Project (filed on SEDAR November 6th, 2019), as well as mineral reserves and mineral resource estimates for AMI’s Richardson and Firebag Projects (filed on SEDAR December 11th, 2019).

About Athabasca Minerals Inc. (AMI)

Athabasca Minerals Inc. (www.athabascaminerals.com) is an integrated group of companies focused on the aggregates and industrial minerals sectors, including resource development, aggregates marketing and midstream supply-logistics solutions. Business activities include aggregate production, sales and royalties from corporate-owned pits, management services of third-party pits, acquisitions of sand and gravel operations, and new venture development. Athabasca Minerals Inc. is the parent company of Aggregates Marketing Inc. (www.aggregatesmarketing.com) – a midstream technology-based business using its proprietary RockchainTM digital platform, associated algorithm and QA/QC services to provide cost-effective integrated supply /delivery solutions of industrial minerals to industry, and the construction sector. It is also the parent company of AMI Silica Inc. (www.amisilica.com) – a subsidiary positioning to become a leading supplier of premium domestic in-basin sand with regional deposits in Alberta and NE British Columbia. It is the joint venture owner of the Montney In-Basin and Duvernay Basin Frac Sand Projects. Additionally, the Corporation has industrial mineral leases, such as those supporting AMI’s Richardson Quarry Project, that are strategically positioned for future development in industrial regions with historically and consistently high demand for aggregates.

Demand For Frac Sand Expands Into Canada

The frac sand boom continues to gain traction in the Southern United States, where drillers are pumping more sand than ever down wells in an effort to boost crude oil and natural gas production. Drilling is ramping up North of the border as well, as Canada looks to maximize production of the commodities.

In addition to increased demand for the proppant sand, the industry is seeing a shift in the type of sand used in the hydraulic fracturing process, with premium sand becoming less favorable.

DEMAND FOR FRAC SAND

On the back of recovering oil prices, drillers are again ramping up production, particularly in Texas. The lone star state’s Permian Basin is experiencing a flurry of activity as drillers look to obtain as much oil and gas as possible from hydraulic fracturing operations. This has again brought rise to a frac sand boom reminiscent of the one experienced in previous years. The proppant sand is pumped down wells to hold open fractures so oil and/or natural gas can freely flow out for collection.

Similarly, a race for oil and gas in Canada, particularly in Alberta’s Duvernay shale formation, which many are comparing to the prized Eagle Ford, is also causing a push for more sand.

A recent article states that Source Energy Services, a supplier bringing sand to Canada’s Western Sedimentary Basin, saw sales increase by 255% in 2017’s third quarter compared to 2016.

According to Global News, the Alberta Energy Regulator states that in 2016, 82 wells were fracked in the first two months of the year; that number jumped to 140 wells for the same time period in 2017.

In addition to increasing demand for oil and natural gas prompting a requirement for more sand, demand for sand is further being pushed as a result of the amount of sand employed per well. Longer wells are requiring more sand, and drillers have discovered that increasing the amount of sand per well increases hydrocarbon recovery. In a report by Carbo Ceramics, the company cites a staggering statistic from ProppantIQ: since 2011, the amount of sand used per well in the US has increased by 210%.

While the industry looks to accrue frac sand in an effort to meet demand, the difference between this frac sand boom and the last, is that producers are looking to reduce costs by opting for lesser quality, more local sand sources.

THE SHIFT AWAY FROM PREMIUM SAND

In the initial frac sand boom, producers used premium quality sand, steering away from the cheaper “brown” sands, despite their closer proximity and lower cost. The Midwest, and in particular, Wisconsin, is home to North America’s most high quality frac sand, known as “Northern White,” or “Ottawa White.” The sand is embedded in sandstone deposits in the western portion of the state, as well as in northern Minnesota.

The Upper Midwest’s sand is prized for its purity, high crush strength, spherical shape, grain size, and uniformity – all key characteristics in utilizing sand as a proppant in the hydraulic fracturing process.

A recent industry downturn forced producers to cut costs wherever possible and this prompted them to experiment with lower quality sands in their operations. The industry found the sand, despite being of a lesser quality, was sufficient for their fracking needs in most cases. Now that the industry has recovered, the low quality sand trend continues to progress as producers use the brown, or “Brady” sands in place of premium sand in an effort to maximize economic returns.

While Texas previously relied primarily on the Midwest to satiate its demand for sand, frac sand mines have been cropping up closer to home, mitigating the high shipping costs that come along with Midwestern sand. Shipping costs are a key consideration in the procurement of frac sand – before Texas began mining its own sand, shipping costs from the Midwest could account for up to 65% of the sand’s cost, according to IHS Markit.

And while this has slowed some of the demand from the South, activity north of the border is helping to provide an outlet for the region’s high quality sand, but some suspect that the demand may not last for long.

A similar trend as was seen in Texas is emerging in Canada; Canada’s shale formations currently rely on high quality sand from the Midwest, but like Texas, more local sand mines are beginning to crop up in the region, supplying a lower quality, but sufficient product at a reduced cost.

According to Global News, Mike Burvill, VP of Fracturing at STEP Energy Services, a Canada-based provider, says that prior to the industry downturn, only about 10% of frac sand was coming from their domestic operations, but in recent times, domestically supplied frac sand has grown closer to ⅓ of what they supply.

NORTHERN WHITE FRAC SAND STILL HOLDS VALUE

Despite the growing trend toward employing lower cost sands, Northern White sand still accounts for around ⅔ of the market share. This premium sand boasts a higher crush strength than sands mined in Texas, allowing it to be used in deeper wells. Furthermore, some producers still prefer the higher quality sand over the lesser cost types.

Some people in the industry are skeptical that brown sand will overtake Northern White, due to its lesser quality. Additionally, some worry that insufficient infrastructure exists near the Permian to meet the demanding logistical requirements of the booming industry, which could result in some producers hauling in sand from the Midwest. Other industry experts anticipate that demand will be so high, Texas will still require sand from the Midwest on top of what it can supply itself. Kent Syverson, industry consultant and chairman of UW-Eau Claire’s Geology department told Wisconsin State Journal: “If the projections hold true and they’re going to need so terribly much sand, then they will need the Texas sand and all of the other sand as well, or they won’t be able to meet demand.”

And while Northern White is primarily mined in Wisconsin and Minnesota, the premium sand can also be found (albeit in much smaller formations), in Missouri and Arkansas. These deposits are geographically closer to the drilling activity, and could provide a source of Northern White with a reduced price tag on shipping to the region. 

FRAC SAND MINING & PROCESSING

Mining frac sand is similar to many mining operations, where overburden is removed to expose the sandstone formation, after which the sand may be extracted, sometimes with the assistance of blasting to break up the sandstone.

Upon extraction, frac sand goes through a series of steps to optimize its properties for use in the hydraulic fracturing process. The sand is first crushed to reduce the particle size of the sand into grains. The sand is then washed in order to remove impurities such as clay and silt that would ultimately clog wells in a hydraulic fracturing setting, defeating the purpose of the proppant sand.

After washing, sand is typically stockpiled for storage. During stockpiling, the sand will naturally reduce in water content. However, a further drying step is required in order to bring sand down to the desired moisture level. This also helps to reduce shipping costs, as less water is being transported. Drying is most commonly carried out using a rotary drum dryer – an industrial drying system known for its robust build, reliability, and tolerance of variations in feedstock.

In addition to the shift away from Northern White sand, the industry has also been switching low-cost dryers out with higher quality systems. Dryer systems designed with the unique challenges frac sand can present have proven to offer a better processing solution, boasting reduced carryover and dust, improved product integrity, engineered customizations, and increased reliability.

CONCLUSION

Despite a shift from premium Northern White sand to “brown” sands, the frac sand industry is showing signs of growth and optimism in the wake of recovering oil prices, and as drillers increase the amount of sand they use per well.

And while local sources of sand provide a greater economic return, premium Northern White sand still holds a valuable place in the market, allowing deeper wells to be fracked than what brown sands can tolerate.

FEECO is a preferred provider of rotary dryers to the frac sand industry. Our rotary dryers are designed around the unique challenges that frac sand can present in order to provide the most efficient and long lasting solution possible. We can also supply an array of material handling equipment to support the process. For more information on our frac sand capabilities, visit our frac sand page, or contact us today!

Huge increase in Canadian frac sand deliveries boosts Source results

By Deborah Jaremko Nov. 13, 2017

Image: Joey Podlubny/JWN

Increased drilling activity in the Montney, Duvernay and Deep Basin plays in Western Canada is driving significantly improved financial performance for Source Energy Services.

The company, which delivers Source White frac sand to the Western Canada Sedimentary Basin from Wisconsin, reported a 255 percent increase in sand sales in the third quarter of 2017 compared to the previous year.The company sold 510,446 metric tonnes of sand in the third quarter of 2017, compared to 157,210 metric tons in the third quarter of 2016.

This generated $62.2 million in sand revenue in the third quarter of 2017, up from $19.1 million in the third quarter of 2016, contributing to Source’s 2017 third quarter net income of $3.0 million, compared to a a net loss of $12.3 million in the previous year period.

“Average Canadian well completion sand intensities continue to lag the average US well completion sand intensities; however, the Canadian average is rising as US style completions are being gradually adopted by Canadian exploration and production companies,” Source said in its earnings statement.

“Provided that commodity prices remain at similar levels to what they are today, and that exploration and production companies continue with their previously announced capital plans, significant improvement in sand sales compared to 2016 is expected to continue through the remainder of 2017. Source also expects that activity levels and sand intensity levels will continue to rise in 2018.”

The company has also “taken critical steps behind the scenes to meet growing proppant requirements,” noted CEO Brad Thomson. This includes the recent purchase of the company’s third Northern White Wisconsin mine and processing facility.

“As an organization, it's important that we continue to expand our ability to produce and distribute more northern white proppant,” Thomson said.

“Standing still is not an option."