A judge has declined to reinstate a key permit for a Georgia company seeking to build a controversial frac sand operation in Monroe County.
Monroe County Circuit Judge Todd Ziegler ruled Monday that the state Department of Natural Resources violated the law when it granted Meteor Timber a permit to fill 16.25 acres of wetlands for the $75 million project.
Ziegler’s oral ruling affirms an administrative law judge’s decision to revoke the permit, finding that Meteor failed to demonstrate its project would not result in significant adverse impacts to the environment.
“The application was not complete. That requires the application to be denied,” Ziegler said. “The law as interpreted by the (administrative law judge) is correct in this regard.”
Environmental advocates and the Ho-Chunk Nation, who had challenged the permit, applauded Ziegler’s decision as a victory “for all those who value our natural resources and the public’s role in protecting them.”
Ho-Chunk lawmaker Rep. Conroy Greendeer Jr. said the nation is “relieved that the law can balance economic development and the harmful impacts of environmental exploitation.”
“The homelands of the Ho-Chunk Nation and our people are being defaced by each of these frac sand operations,” Greendeer said. “Every truckload and train full of sand that comes out of Wisconsin leaves behind scars on our landscape, upon this habitat, and in our lungs.”
“We must listen to the science, and to scientists, when making decisions that permanently affect the environment in Wisconsin,” said Evan Feinauer, staff attorney for Clean Wisconsin. “Today’s ruling also makes clear that all permit applicants must meet the same legal standards, irrespective of their wealth or political influence.”
Attorneys for Meteor Timber did not immediately respond to requests for comment.
The decision marks the end of another chapter in Meteor’s four-year effort, which has spanned two administrations, multiple courts and a boom-and-bust cycle for Wisconsin’s frac sand industry, which supplies silica used to extract oil and gas from deep rock formations.
Meteor applied for the permit in 2016, saying it needed to fill the wetlands to build a processing and rail loading facility near the town of Millston that would serve two nearby mines on land the company acquired when it purchased nearly 50,000 acres of Wisconsin forest.
Despite finding that the project would result in “permanent and irreversible” impacts and the loss of 13.4 acres of “exceptional quality” imperiled habitat, former Gov. Scott Walker’s DNR granted a permit in May 2017 that included dozens of conditions and questions. The agency issued a final permit five months later with some of those questions unanswered.
It would have been the state’s single largest destruction of wetlands for a frac sand project.
Clean Wisconsin and the Ho-Chunk Nation challenged the permits, saying the agency failed to meet statutory requirements when it issued the permits.
Administrative Law Judge Eric Defort agreed, ruling after a five-day hearing in 2018 that the DNR didn’t have all the information required by state law.
Meteor petitioned then-DNR Secretary Dan Meyer to overrule the judge’s decision, saying it contained factual and legal errors.
Secretary Preston Cole, appointed by Gov. Tony Evers in January 2019, closed the case on April 30 without modifying, affirming or repealing Defort’s decision, saying in his order that the issue would be best resolved by mutual agreement or in the courts.
Meteor challenged Defort’s ruling, saying it contained legal and factual errors.
Attorney General Josh Kaul, representing the DNR, argued Defort got it right when he overturned the original and amended permits.
Ziegler, who earlier this year denied Meteor’s motion to introduce new evidence that the company’s attorneys discovered after the 2018 hearing, agreed.
Ziegler said he anticipates the case could end up in the court of appeals.
“We’ll see where this leads,” he said.
A recent change in Union Pacific's operations throws into question the need for the multimillion dollar investments, as well as the justification for filling in some of the state’s wetlands.
The ruling comes as the frac sand industry weathers the worst conditions since the late 2000s, when high oil prices and technological advances unlocked previously untapped oil reserves and led to new demand for the silica sand found under much of western Wisconsin.
“There has never been a worse time to add Northern White Sand capacity,” said oilfield supply chain analyst Joseph Triepke, president of Infill Thinking. “We are seeing plants sold for literally pennies on the dollar of original cost because there is no buyer appetite.”
Two of the largest sand producers, Hi-Crush and Covia, declared bankruptcy this year and have seen the value of their mines fall by hundreds of millions of dollars, and Smart Sand last week paid just $2 million in stock for two facilities from Eagle Materials that Triepke said cost hundreds of millions of dollars to develop.
Anyone adding capacity is essentially betting on oil prices returning to $100 a barrel, Triepke said. “And they could buy that option in the (mergers and acquisition) market much, much cheaper than building new capacity, which no one needs at the moment.”