Source: Chicago Tribune, May 12, 2015
Posted on: http://envfpn.advisen.com
For some people here, the farm field across the road from Tim O’Regan’s factory was supposed to be this struggling town’s land of opportunity, a way to reap economic benefits from the oil fracking boom. For others, it represents a public health threat.
An international oil and gas company proposes to bring to that field a 230-acre transportation center to ship and store silica sand, a central ingredient of fracking — shorthand for the controversial hydraulic drilling process that fractures shale rock to release oil.
The plan to build a multimillion-dollar sand shipping facility could mean jobs, increased tax revenue and perhaps more businesses coming to Earlville, a LaSalle County community of 1,800 about 70 miles southwest of Chicago, where sand mining has been deeply associated with the county’s economy since the 1860s.
But over the past six months, the encouraging prospects for sand have begun to fade in Earlville, the latest front in the war over fracking. Dogged by environmental concerns, regulatory delay and a downturn in fracking production, the promise of hydraulic fracturing so far has come up short in many small towns across Illinois.
“I don’t think this is viewed as progress,” said the Rev. Del Keilman of the 163-year-old United Presbyterian Church in Earlville. A sizable group of citizens would prefer economic progress of a different kind in Earlville, Keilman said. He maintains that he hasn’t taken a position in the debate, and that he’s listening to both sides.
The City Council approved the plan. The school district superintendent supports it. But opponents showed up in big numbers to protest at public hearings, and O’Regan filed suit in February asking to stop the plan in part because he believes the shipping center would kill his plastics molding business.
In a 93-page complaint filed in LaSalle County Court, O’Regan contends that Earlville and the energy company, Houston-based EOG Resources, Inc., exhibited a “fundamental lack of procedural due process.”
The complaint states that city officials privately agreed to the proposal before holding public hearings, and that the city made its decision without conducting sufficient analysis. O’Regan also says the city failed to give him proper notice of the transport center plan, and that excessive sand from the center would blow into his equipment — ruining it and his products — and pose an environmental health hazard. In addition, trucks and trains would block traffic to his plant, O’Regan claims.
Earlville Mayor Mike Hall said those confidential discussions with EOG were informational and that no promises were made before public hearings were held. He also maintains that the center would be a safe addition to the community.
A court hearing in the case is set for Wednesday in LaSalle County, where attorneys are expected to argue over who should be excluded as defendants.
EOG’s transport center would accept sand from hundreds of trucks traveling from mines in the county, then load the sand on rail cars and ship it to wells throughout the U.S. where fracking is ongoing.
All that silica sand being unloaded, reloaded and shipped by rail has raised worries about sand and dust blowing throughout town, a concern underscored by dozens of wind turbines west of Earlville that harvest energy in a particularly open and windy swath of the state.
“It’ll carry sand over everything,” said Peggy Hanna, who said she has lived in Earlville for about 20 years and signed a petition to block the transport center. “For people who have trouble breathing now, that’s going to be really tough.”
Tiny particles of silica sand can be small enough to pass through the body’s natural filters and damage the lungs. A 2012 report from the National Institute for Occupational Safety and Health concluded that 79 percent of air samples collected at fracking sites in Arkansas, Colorado, North Dakota, Pennsylvania and Texas registered above NIOSH limits for silica levels.
Mayor Hall, who supports the proposed transport center, said he spoke with a number of experts, including environmental engineers and officials from other communities where EOG has established facilities similar to the proposed sand transfer station.
“I’m confident from my research and the people I’ve contacted and dealt with … that it would be a safe entity for our community,” Hall said.
One of the communities in which EOG has built a sand shipping center is Refugio, Texas, where Mayor Joey Heard said EOG’s facility has damaged area roads and brought more artificial light to the area at night. It’s too early to say whether the facility has hurt Refugio residents’ quality of life, he added.
The center brought 62 jobs to the town of 2,800 about 45 miles north of Corpus Christi, said Heard, who added that EOG does “participate in giving back to the community.” Most recently, the company donated money for a new football field and new firetruck, Heard said.
“I’d say we’re better off having that here,” he said.
Earlville’s school Superintendent Wade Winekauf said his discussions with school officials in other communities where EOG has set up businesses yielded the same conclusion. The town’s three schools are about a half-mile east of the proposed sand shipping site.
The economic benefits are enticing, too, Winekauf said, especially for a district where the assessed valuation of property is declining.
Winekauf calculated that the new center would generate about $100,000 a year for schools through property taxes. Mayor Hall said beyond creating 20 full-time jobs on the site and an undetermined number of truck-driving jobs, the center would draw other related businesses to Earlville.
“Our community is in need,” Hall said. Earlville has lost several businesses and, like many small towns, was hit hard by the recession, he said. Too many homes are vacant, Hall added.
“This is a business we don’t have,” he said. “This is a sign that maybe we’re going to get something going, spur a little bit.”
Earlville also likely will lose a business — O’Regan’s Electrical Materials Co. — and its 30 jobs, if the sand transfer center is built, O’Regan said. He added that city officials have allowed uncertain economic hope to cloud their long-term judgment.
He told city officials the EOG representatives are great salesmen, “but more like used car salesmen” who have offered different versions and vague outlines of what’s being planned, O’Regan added.
In email responses to questions, an EOG spokeswoman said Earlville will benefit from jobs created by a company that “has a solid reputation for being a good neighbor.” EOG received the 2012 Business Friend of the Environment Award from Wisconsin’s largest business organization, the spokeswoman, K Leonard, noted.
“Historically EOG has been able to provide satisfactory solutions to issues raised by the public in other communities,” Leonard added. “We expect to be able to do the same in Earlville.”
But the overall outlook for fracking in Illinois is uncertain, a consequence of low oil prices that started dropping right about the same time the state finished composing its fracking permit process in November.
Not a single company has applied for a fracking permit in Illinois, the state Department of Natural Resources reports. Nationwide, about 1,000 oil and gas rigs have ceased operations since the recent peak in September 2014, said Ethan Bellamy, a senior analyst at Robert W. Baird & Co.
That development is expected to yield a 15 to 25 percent decline in the demand for fracking sand in North America, Bellamy said. But the market is tough to gauge because it lacks public price data and market statistics from a government agency, among other challenges, he added.
“Our estimates reflect the beginning of an oil-inspired downturn,” Bellamy said, “that we believe should last the balance of the year.”
Meanwhile, voters in Earlville’s April municipal election ousted three council members who voted for the annexation and rezoning that cleared the way for the sand transportation center. O’Regan has suggested that the new members will work to overturn the earlier decision.
The division and acrimony occurring in Earlville is something Mike Harsted has seen unfold elsewhere in LaSalle County.
Harsted, the county director of environmental services and land uses, said companies pulled about 10 million tons of sand from LaSalle County in 2013, the latest year for which he had statistics. Five years earlier, sand mining companies were taking less than 4 million tons a year, he estimated.
Whether that increase is a benefit or detriment largely depends on the location of sand mining and shipping facilities, Harsted said.
“If it’s in your backyard, you hate it,” he said. “And, if it’s not, you think it’s great.”