Monday, October 1, 2012

Fracking Sand!! It is not what it sounds like. Sand is the newest natural resource craze.

When we study the Production Possibilities Frontier and the variables that can INCREASE the productive capacity of a nation, we list "New uses for existing resources" as one of those variables.

In the Mid-West there has been a boom in gas and oil drilling with a technique called "Fracking". See video below to see how this works.

Fracking requires a specific grade sand and there is plenty of it lying dormant in the farmlands of the Mid-West/Upper Mid-West.

A new industry is born to service another one.  It contributes to higher employment of a variety of resources (people being the important one), lower energy prices (theorhetically) and lowers the cost of producing goods. 


Sand boom creates prosperity, shovel-ready jobs, and ‘sand millionaires’ in America’s sandbox, but generates controversy
“High-grade frac sand commands a premium in the marketplace: $60 to $80 per ton, over five times the price of construction sand and gravel. Oil companies and oilfield service firms can pay over $300 per ton for processed sand delivered to the wellhead. No wonder that large mining firms, many of them based outside the region, have invested hundreds of millions of dollars in mines and processing facilities.

Unemployment in Barron County, Wis., topped 11 percent at one point during the recession. But since 2010, sand mining companies have invested hundreds of millions of dollars in the predominantly rural county—making its economic development director bullish on the future. “Frac sand is the biggest and best thing that’s happened in our lifetime in Barron County,” Bob Missling said. “I see frac sand becoming one of the county’s biggest sources of business revenue, moving forward.”

2 comments:

  1. http://blogs.scientificamerican.com/observations/2012/06/22/frackings-biggest-problem-may-be-what-to-do-with-wastewater/
    GDP cannot measure some things. There are some problems with Fraking.

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  2. Joe---absolutely. This is one of the big problems with measuring GDP. It only measures value going forward, not backward--as in the value of something destroyed. Break a window and GDP increases!! AND when the areas subject to Fracking start imploding on themselves, well, the repair of that area will increase GDP too. I wonder what GDP would acutally be if we included the minuses as well as the positives. Probably would be only $1 million dollars instead of $16 Trillon. :)

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