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For one couple, sand mining creates wealth — and friction

A farm couple cashed in on the soil that gave them fits for 40 years, gaining a new lifestyle -- and some enmity.

Article by: CURT BROWN , Star Tribune

Updated: December 2, 2012 - 2:34 PM

BLAIR, WIS. -- Lou Ellen and Jim Frei spent 40 years as hardscrabble dairy farmers, cussing the sandy soil that gave them and their tractor such fits.

Today they are finally breathing easy, thanks to that same gritty land. They just moved into a new one-story house on Sjuggerud Coulee Road. Now they don't have to worry about climbing their old farmhouse stairs on knees made sore by milking cows.

Once so poor they couldn't afford new shoes when their daughter started school, they now have more than $550,000 in the bank.

"We've even got a Jacuzzi tub now," said Jim, 66, chuckling about their sudden change of fortune.

Two years ago, the Freis sold that sandy farm to a mining company.

It's a story playing out across the Sand Country of western Wisconsin and southern Minnesota, as mining companies snap up farms and pastures to dig the round silica sand coveted by oil and gas companies for the drilling technique known as "hydro-fracking.'' As American oil and gas production soars to new heights, here, amid rolling hillsides and Amish farms, families such as the Freis -- and countless others -- are being swept up in the global energy game.

While they count themselves fortunate, the Freis acknowledge some heartache. They get envious glares from neighbors who were hay-baling partners for years. Some neighbors won't wave anymore as they pass on country roads.

"This has become a very divisive local issue, with some people becoming quite wealthy in what used to be a tough rural farming area," said Tom Woletz, who tracks frac sand mines for the Wisconsin Department of Natural Resources.

"It's certainly big money and a big change,'' he added. "And if you're not in, you're out. So you've got families and neighbors that aren't going to talk to each other for the rest of their lives and hillsides you looked over your whole life now cut wide open. Who could have imagined it?"

Turning sand to green

As they unpack boxes of dishes and rehang the two antlered buck heads Jim hunted on his old farm, the Freis pinch themselves.

"It was just too good a deal," Lou Ellen said. "And the impact it's had on our lives has been tremendous financially."

Jim admits he can be a smart aleck at times, such as when the real estate guy from the sand mine first stopped by and asked if his farm was for sale.

"I said everything's for sale for a price.''

They hopped in Jim's pickup and drove over to his grain bin.

"He took out a little hatchet and chopped a piece of the sandstone," Jim recalled. "Oh, he was just smiling."

Along with three neighbors -- Phineas Schrock, the Axnesses and the Neuenschwanders -- the Freis received $3,850 an acre for their 143 acres from Winn Bay Sand Co. The deal gave them 10 years of rights to continue farming, logging and hunting.

"When the guy named Harold drove into my driveway -- the guy who writes the checks -- I walked over and gave him a big hug," Jim said. "Then I turned around and said, 'Watch it, I'm not that kind of guy.' I was just happier than heck after all those years working my fool head off."

All told, there are more than 100 sand facilities, operating or proposed, in western Wisconsin. The boom is still emerging in Minnesota, where several counties have moratoriums in place. But mines are digging, or facilities are planned, near Shakopee, St. Charles, Le Sueur, Winona, North Branch and Wabasha -- to pinpoint just a handful.

Ancient landscaping

Why here? When the glacial ice sheets plowed through 10,000 years ago and dumped fertile sediment onto the landscape of southern Minnesota, they skipped a wide swath of the so-called driftless area of southwestern Wisconsin and southeastern Minnesota.

"That left what we call a bedrock landscape with a sandstone layer very close to the surface," said Tony Runkel, chief of the Minnesota Geological Survey. "One reason the area is so scenic, rugged and hilly is because it was spared from glaciation."

Now that landscape has changed the financial landscape for farmers who had struggled for years with low milk prices and stingy corn yields.

"They went from not wanting their kids to go into farming because it was like tying a millstone around their necks ... to these huge amounts of money," said Kent Syverson, geology chairman at the University of Wisconsin-Eau Claire. "These sleepy county roads are no longer so sleepy."

Or, as one of the Freis' neighbors, Lorna Tenneson, put it: "It's like the Beverly Hillbillies: Who would have thought these hills we've been tipping our tractors over on all these years would become such a hot commodity?"

Hot is right. Frac sand opponents have packed meeting halls and circulated petitions, worrying about increased dust getting into their lungs, heightened truck traffic pummeling their roads and all that water the mines would suck from the aquifers.

"There were two armed police officers at the back of one meeting -- that's how hot it got," Lou Ellen Frei said.

Laughing in his grave

Lou Ellen had lived at the old farm since 1950, when she was 3, learning to add by counting the train cars that rumbled past the farm. That proximity to the rail line, long a drawback, wound up attracting the mining company to their land.

Her father, Jerome Magnuson, originally paid $100 an acre "and he'd be rolling over in his grave, laughing," Jim said.

Jim met Jerome's daughter at a friend's birthday party right after John Kennedy was assassinated in 1963. She was 16 and attending Blair High School. Jim went to nearby Whitehall High.

He worked at a factory in Winona after they were married 46 years ago. Then his father-in-law offered him a chance to team up on the farm. By 1971, the Freis bought out her dad for $250 an acre -- the going price at the time and one-15th what the sand mine would pay in 2010.

"Jim bribed me with a promise of a new house, saying we'd build our own place within two years," she said. "Now I finally have my new house -- it only took 40 years."

About 30 years ago, a neighbor offered Jim 80 acres nearby for $28,000. He turned it down. "It's all sand," he said at the time. "I can't grow any crops to feed my cows on it."

That parcel sold for $250,000 in 2010 and is now the very spot where the mine's current owner, Preferred Sands LLC, has huge earthmovers ripping into the hillside. The company declined repeated requests for interviews and a tour. But from a nearby ridge, a visitor can see massive shovels piling up the sand, which is dried, stored in a series of silos and then piped onto train cars that take it to Texas, Pennsylvania and other frac well locations.

Tears well up in Jim's eyes when he remembers the way he built up his farm, only to tear down the barn and four silos during the sale. But Lou Ellen says they were ready. They had sold off the cows several years ago and were selling off machinery: "Just trying to survive," Jim said.

Their new house is six years old and sits 8 miles away on a few hilly acres. They bought it in a foreclosure sale for $160,000. They say they simply wanted a one-story house -- they weren't trying to get away from the mine site.

"I know what the talk is: 'Oh, Jim left, and now that he got his money, he's getting away from the sand mine.' But that didn't have a single thing to do with it," Lou Ellen said.

Lou Ellen admits the first night in the new house was restless. "But I slept great the second night."

Another benefit: They're excited to be able to give their kids some money every year to help support their eight grandchildren.

When the sale went through, Jim expected his neighbors to say, "Well, good going, Jim, good for you, you deserve it after all those lean years."

But Lou Ellen said, "It's been war. I'll tell you, it was bad."

Unhappy neighbors

Amy and Jeff Swanson have lived on 12 acres adjacent to the Freis' old place for seven years, raising 10-year-old Rayna and 8-year-old Jaren. They grow some crops and run landscaping, hauling, can-recycling and dog-breeding businesses. Unlike the Freis, says Amy, "our security is gone.

"They've had the opportunity to raise their family out here, they had the opportunity to live their life, but we're just starting out and we're extremely concerned about the potential health hazards."

Amy, 34, said she's not naive enough to think the area doesn't need the jobs that frac sand brings, but she wishes the mining company had bought up a buffer zone.

Jeff Swanson, 38, said they were ready to live with the mine under the original rules that shut down operations at 8 p.m. and left a ridge line of trees as a buffer. After the mine was recently annexed to a nearby town, many of those safeguards are gone.

"If we get a chance to get out of here and move, we're gone," he said. "This sand mining thing is starting to explode, and given a choice, nobody would live next to a sand mine."

But the economic arguments cut both ways: The Freis hope that mining will bring jobs and even retail development to tiny Blair, population 1,300.

Blair Mayor Ardell Knutson is optimistic, too.

"It's brought in some good-paying jobs, and any time you've got a car with working people driving through town, they're bound to stop by and buy some gas or spend some of that money," Knutson said.

Since the sale, the Freis insist, they've had no regrets. When the sand is tapped out in 20 years or so, the mining company assured them it would restore the land so, as Lou Ellen said, "It would look just like it does now, just a little bit lower."

They've heard about people getting $10,000 an acre in other places. A Texas oil and gas company, Windsor Permian, has offered more than $15,000 an acre for a possible mining site near Red Wing.

"But we're satisfied," Lou Ellen said, looking at her husband. "Gosh,'' he added, "it all seemed to work out real well."

Staff writer Tony Kennedy contributed to this report.

Curt Brown • 612-673-4767

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