Right now, though, the economic benefits of that drilling are planting roots throughout the upper Midwest. It's obvious in North Dakota, the epicenter of the oil and gas boom. But it's also showing up in Minnesota in places you might not expect.
The Federal Reserve Bank of Minneapolis notes the sand mining in southern Minnesota and western Wisconsin is triggering a resurgence in local freight rail. The Fed writes:
In Wisconsin, many sand mining companies have built facilities adjacent to rail lines--a cost-effective way to ship raw or processed sand, often in "unit trains" of over 100 cars. In response to increased demand, railroads have ramped up their operations and rehabilitated little-used or dormant lines, at a cost of roughly $1 million to $2 million per mile.We've seen communities in southeast Minnesota put the brakes on new mining as they try to balance the huge potential economic payoff with quality of life concerns.
Lakeville, Minn.-based Progressive Rail operates a 62-mile line running north from Chippewa Falls to Rice Lake and Almena, in Barron County (see accompanying map). Freight volume has increased fivefold to about 1,800 cars a month since EOG Resources completed a new sand processing plant in Chippewa Falls last December, said company President Dave Fellon. Over 90 percent of that volume consists of frac sand from the EOG plant and other mining facilities along the route.
Rising revenue has allowed Progressive to invest in human capital (payroll has increased from 65 to 100 workers over the past year) and critical line improvements. Fellon said the firm will spend $30 million to $50 million over the next five years on new railroad ties, bridges, loading facilities and other infrastructure.
Canadian National and Union Pacific have also refurbished long-neglected rail lines linking Wisconsin frac sand operations to distant markets. This summer, CN began clearing brush and laying new ties on a 45-mile section of rail between Cameron and Ladysmith to connect existing and proposed sand mines with a main CN line running north into Canada and south to Texas. The railroad backed out of a pending sale to the state that would have let Progressive operate the line, opting to retain ownership of a potentially profitable sand route.
But as often happens, the economic payoff gets a huge head start in the debate. It's hard to have a discussion about long term stability when there are needed jobs being created and big money to be made in the short-term.
-- Paul Tosto(7 Comments)
It's only a short stroll, then, to some grim, newly published data showing many of the folks near retirement have little savings beyond Social Security.
The Schwartz Center for Economic Policy Analysis writes:
Despite the growing tax breaks and intensive advertising campaigns for retirement accounts ‐‐ most of which are 401(k) plans and Individual Retirement Accounts (IRA) ‐‐ Americans ages 50‐64, 58 million of them in 2010, will likely not have enough retirement assets to maintain their standard of living when they reach their mid‐sixties. The addition of a weakening labor market for older workers means we are headed for a retirement income security crisis. Three quarters of near retirees (ages 50 to 64) have annual incomes below $52,201, with an average total retirement account balance of $26,3952.The data's led one New School researcher to conclude the system of voluntary retirement accounts has been a disaster.
Individuals with incomes over $52,201 per year have more in their retirement accounts, but their balances are not high. Their average retirement account balance for this income group is $105,012.
Teresa Ghilarducci argues for "guaranteed retirement accounts on top of Social Security. These accounts would be required, professionally managed, come with a guaranteed rate of return and pay out annuities."
Her essay doesn't provide detail on how the accounts would be administered or how the money would be spent. And, of course, Americans don't like being told what to do.
"You don't like mandates? Get real," she says. "Just as a voluntary Social Security system would have been a disaster, a voluntary retirement account plan is a disaster."
-- Paul Tosto
(h/t Carpe Diem blog)(2 Comments)
Posted at 3:31 PM on July 23, 2012
by Paul Tosto
I'm kind of enjoying the new Minnesota Department of Public Safety ads about the creative excuses people use for speeding.
I'm learning a valuable lesson, too, of course.
Using the Twitter hashtag #droptheexcuses, the Department of Public Safety is featuring some of its favorite speeding excuses.
Check them out below. It'd be interesting to look at some data on what impact these campaigns really have on driving habits and how long those effects last.
Anyway, feel free to chime in with your favorite. I like "I have five wood ticks climbing up my leg." Really? You took a count?
-- Paul Tosto(3 Comments)