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BRADY, TX — Pioneer Natural Resources Company will save $400,000 per well by closing the frac sand mine in Brady and shifting supply to its mines in west Texas, closer to its oil and gas extraction operations.

The company announced the closure and move late last week.

Pioneer expects to wind down operations during the first quarter of 2019 and transition to 100 percent west Texas sand by May 2019.

The Brady mine closure will not be inexpensive in the near term. The publicly traded corporation will take a noncash after-tax charge of $350 million to $400 million in the fourth quarter of 2018 related to the closure.

“The new west Texas sand mines with their low cost of mining and proximity to our Permian acreage position have provided us a more cost-effective, long-term source of sand supply,” said Timothy L. Dove, Pioneer President and CEO.

Frac sand, or proppant, is used for hydraulic fracturing, commonly referred to as fracking within the oil and gas industry.

The news of Pioneer shuttering its Brady sand mine comes after Ohio-based Covia Corp. said it was also closing its two mining facilities southeast of Brady in the town of Voca.

Like Pioneer, the company is moving its sand mining operations closer to the pil fields. Covia just opened two new mines in the Permian Basin near Kermit and Crane, according to the Houston Chronicle. The trend towards sourcing sand in west Texas may impact Texas Pacifico Railroad. The Mexico-owned rail line has created a niche business of transporting frac sand from northern U.S. states like Wisconsin to west Texas.

The last long train I saw moving through San Angelo didn't have frac sand cars. It had cars and cars of pipe for building much-needed pipelines that will deliver oil to coastal refineries and for export via the Port of Corpus Christi and the Houston Ship Channel.

“The sand business is on its head as we've all known it over the past several years,” said Stan Meador, Marketing Director for Texas Pacifico. He added that the railroad is transporting oil out of the Permian as well. Long term, once the pipelines are on line, Meador said the international bridge currently under contruction in Presdio will open new and different opportunities for exports into Mexico.

Texas’ oil and gas industry is seeing a boom — thanks in large part to the relatively new oil-drilling method called fracking. Late last year, Texas oil helped push the country to become the largest producer of crude in the world. Around the same time, however, the boom came to an end for one town in the Hill Country.

If you follow State Highway 71 west, it ends in Brady, a town of about 6,000 people in McCulloch County. The stretch of Hill Country has a unique geology.

“Sand goes back a long, long way here in Brady,” Mayor Anthony Groves says. "I had cousins that worked in the sand plant in the '50s and '60s timeframe, so sand plants have been here for a long, long time."

The sand here has a nickname in the oil industry: Brady Brown. It’s had many uses over the years, but mining operations were turned up a few notches when fracking came into vogue. Sand — good sand — is an essential ingredient for the technique.

“Some people looked at Brady as a mining town, or McCulloch County as a mining county, because of so much of the central steady part of the income came from the sand mines,” Groves says.

The success of fracking — and drillers’ thirst for sand — brought bigger, international mining operations to Brady. Some bought existing mines. Some started new ones. Most bought up neighboring ranchland and deer leases for expansion. Tiny McCulloch County was eventually home to seven sand plants.

Until last November.

“They told everybody no vacation, no nothin’, we have the big guys coming in,” Arturo Aguirre says. "So, they come in, and Tuesday they told us we’re shutting down.”

Aguirre has lived in and around Brady for most of his life. He spent the last 21 years running heavy equipment in a sand mine for Unimin, which recently changed its name to Covia.

A few weeks before Thanksgiving, Aguirre got the news that he wouldn’t be working there anymore.

“So, we picked up our toolboxes and our personal property – our coats, our gloves, whatever we had in our lockers, you know, lunchboxes and all that,” he says. "We had to sign papers that we was cut from the company, because they was shutting down. And they shut down the doors. Packed it up. We left.”

It was terrible news for the workers, of course. But it was just the beginning of a wave that would hit the rest of the county’s mines.

Closer To Oil Operations

The sand in the Brady area was deposited millions of years ago. It’s coarse and difficult to crush. That’s important in fracking, which uses sand to fill wells and keep them open after shale has been broken to reach oil.

“Crush strength is definitely one of the biggest factors, because if it’s not strong enough, it’s not going to hold those cracks open,” says Brent Elliott, a research associate with the University of Texas Bureau of Economic Geology.

For years, Brady Brown was the industry standard. But then oil companies developed ways to use — geologically speaking — finer, younger sand.

“These are just wind-blown sands that have only been collected there,” Elliott says. “They’re really young, just a few thousand years old.”

With oil supplies up and prices down, companies are trying to figure out how to squeeze profits where they can: Reducing transportation costs lowers other costs. No longer reliant on Brady Brown, the sand-mining operations are moving west to be closer to oil operations.

“It’s easier to get sand 5 miles than it is to get 500 miles,” Aguirre says. "That’s why West Texas [sand mines were] built. It’s easier to get that sand.”

'We Need Jobs Out Here'

Some of the sand companies are offering the Brady workers similar jobs out west, but whether they can leave depends on their individual situations.

Aguirre cannot. He’s 62 years old, three years short of the retirement he planned. His wife works in Brady, and he has elderly family members who need his help.

“We made pretty good money here,” he says. "I’m not saying we made it rich, but we made a living. And it was a decent living. And I paid my bills. Like everybody else, you pay your bills one day at a time, you go to work one day at a time, hope you don’t get sick and you try your best.”

With his severance ending, Aguirre's not sure what’s next.

“We need jobs out here,” he says. "We need something that’s stable ... and it makes it hard. I don’t know what I’m going to do. I really don’t know.”

Carol Henderson lives just outside Brady with her husband of 57 years, L.D.

They have a small ranch off Highway 71 in Voca, next to a deposit of Brady Brown. L.D. was born and raised in Voca, and when the sand mine opened in Brady, he was there.

“Well, L.D. went to work for one of them in 1958, and I was really happy about it," Carol says.

L.D. had just been laid off. Carol was hoping for something a little more sustainable, and the sand mine provided it. He had steady employment for 36 years, a pension, health care.

New Opportunities

With the sand mines closing, what's to come of the plants and the Brady Brown left behind?

“They’re supposed to fill them back up,” Carol says. "Leave them like they found them."

"They won’t now,” L.D. says. "They say they’ll never fill them up now. At one time, I thought by law, they had to fill them up and plant trees or something. But then a fella that worked for the sand plant said that’s no longer the case."

"So, that’ll just be a hole in the ground,” Carol says.

“It’s a blow to have the sand plants leave,” Groves says. "There’s all kinds of rumors about who has bought those spaces. I don’t know anything about, for sure, who did that or if they’ve been purchased.”

Two months after the first mines began closing, rumors and hearsay are all over town. What the mayor does know is that about 15 percent of the households in Brady are hurting right now. There may be ripple effects from the closings down the line. People have less to spend. Other mine-related businesses could close. People may need to leave to find new jobs.

But Groves is optimistic.

“We don’t need to be screaming, ‘Woe is me. The world’s coming to an end because the sand plants left,” he says. "We got an opportunity that closed. We got new opportunities that we don’t even know about yet that may make things better than they were before.”

And there’s always the chance that someday there’s a new use for that Brady Brown sand.

Posted by Jaime Tankersley, Natural Resources Conservation Service, Texas in Conservation

Jan 24, 2014

The National Organization of Professional Black Natural Resources Conservation Service Employees recently honored three farm families at their annual outreach and agricultural education exposition.

The Lloyd Wright Small Farmer Award is named after the organization’s founder. The award is given to producers who share a passion for improving awareness and development in the field of agriculture. The organization selected Kentucky rancher William E. Boulden, Jr. for first place, Texas grape growers Alphonse and Martha Dotson for second, and Mississippi ranchers Percy and Emma Brown for third.

“Our organization recognized the three farming operations to showcase not only their excellent stewardship of the land but also their partnership with NRCS and their conservation activities in the communities,” said Drenda Williams, the organization’s past president.

Boulden’s career in agriculture began during his youth. He assisted his grandfather and neighboring farmers with their cattle herds and was active in the local 4-H chapter. Today, Boulden runs a commercial beef cattle operation.

Working with NRCS, Boulden has implemented a rotational grazing system and expanded his livestock watering facilities. These improvements help him provide good food for his cattle, prevent soil erosion and conserve water. He was recently named the 2013 Kentucky Prescribed Grazing Hero from the Kentucky Association of Conservation Districts.

The Dotsons were recognized for their extensive conservation efforts and soil improvement techniques used on their Voca, Texas vineyard. Their story is not typical, but that could be what makes their grapes a little sweeter and their wine the winner of awards.

After retiring from the Oakland Raiders and spending 15 years in Acapulco, Mexico, Dotson purchased his ideal grape growing property in Voca. Dotson worked with NRCS staff to create topographic maps that showed the land’s contour, field elevations and soil types.

Using technical and financial assistance from NRCS, the Dotsons removed mesquite and treated prickly pear cactus on rangeland near their vineyard. These practices have helped them conserve water and improve their property’s soil health.

The Browns are living their retirement dream of raising commercial cattle on their Port Gibson, Miss. farm. The beginning farmers are passionate about conservation practices that benefit their land and livestock.

To achieve their goals, the Browns have worked with NRCS staff to install cross-fencing, one key to implementing a rotational grazing system that can help reduce the pressures caused by overgrazing. They also have installed the farm’s first-ever livestock water troughs. The Browns are truly enjoying their retirement days working on the farm.

The 2013 award winners are leading by example and putting conservation at the forefront of their management decisions.

Category/Topic: Conservation

Tags: 4 H Beginning Farmers Conservation Farmers grapes Kentucky Livestock Mississippi NRCS Producers Ranchers Texas

The Center for Coffee Research and Education of the Norman Borlaug Institute for International Agriculture at Texas A&M University in College Station will establish a new coffee academy and laboratories in Honduras to provide training for coffee farmers as well as badly needed youth employment opportunities.

The name for the facility will be the Honduran Coffee Academy and will offer both in-person and virtual training, said Roger Norton, regional director for the Borlaug Institute and director of the Center for Coffee Research and Education.

Project Goals

“This project is in keeping with a primary objective of the Borlaug Institute, which is part of Texas A&M AgriLife,” Norton said. “And that is to continue the legacy of Dr. Norman Borlaug, the father of the Green Revolution, by helping improve the livelihoods of smallholder farmers throughout the world.”

The project is intended to reach existing trainers who work with smallholder coffee farmers, including those in non-governmental organizations and agricultural cooperatives, and the coffee producers themselves.

“While the project’s purpose is to benefit all coffee farmers, we are emphasizing promoting coffee industry opportunities to Honduran youths,” Norton said. “We will also place emphasis on helping women coffee farmers develop the knowledge and skills they need to succeed.”

The five-year project is funded by the U.S. Agency for International Development and is being implemented in collaboration with nonprofit ACDI/VOCA. The project will establish two laboratories for training in the most advanced technologies for coffee processing, roasting, cupping and developing barista skills. It will also implement a complete curriculum related to all aspects of coffee production and the coffee industry, from plant genetics onward.

Laboratories and training facilities will be located in a facility of the Honduran Coffee Institute, IHCAFE, in western Honduras.

“We anticipate this project will have a positive impact on the Honduran economy, both by improving the country’s vital coffee industry and helping provide additional employment opportunities for Hondurans, especially Honduran youth,” Norton said.

Data from the Honduran vocational education institution shows 14.2% of youths in the Honduran labor force are unemployed and an additional 25.5% neither study nor actively seek employment.

Norton noted the Center for Coffee Research and Education is one of the premier coffee research facilities in the U.S., and the Borlaug Institute has already implemented six other coffee-related projects in Africa and Latin America.

“This expertise and knowledge of the coffee industry that our team has acquired makes us uniquely qualified to lead this new initiative,” Norton said. “We can provide Honduran coffee farmers with the technology, technical assistance and science-based data they would otherwise not be able to access.”

Norton said through coordination with Honduran partners, including IHCAFE, the academy will also fully train Honduran trainers and position them to carry on post-project training.

The Honduran Coffee Industry

Honduras is the largest coffee producer in Central America and the third largest in Latin America. It ranks fifth in coffee production globally, accounting for about 4% of the world’s coffee supply. Between 2017 and 2019 more than 7.5 million 132-pound bags of green coffee were produced per year in Honduras.

More than 100,000 families across Honduras are involved in coffee production, with 95% being small-scale farmers and 70% producing on farms of less than about 5 acres.

“While prices for coffee have improved recently, they have been relatively low for the past decade and will probably go back to being lower in the future,” Norton said. “Not only that but farmers in Honduras and other Central American countries are typically confronted by climate change, coffee diseases, especially coffee leaf rust, as well as economic challenges.”

He said a primary goal of the project is to provide coffee farmers with the knowledge, skills and technology needed to increase yields and improve the quality of their product as well as receive higher prices and increase their operational profitability and sustainability.

The Need For Training

The necessity for an improved, modern training program was underscored in a 2018 report by Heifer International and the Honduran Coffee Institute with support from the United Nations Development Programme.

The report highlighted several facility and value chain deficiencies for training, including limited access to modern technologies, poor storage and drying facilities, lack of quality controls and product uniformity, and limited access to wet processing methods.

It also noted deficiencies in training practices and more human aspects of industry sustainability, such as the advanced age of many of the country’s producers, insufficient technical advisory services, lack of training on entrepreneurial approaches, outmoded curricula in training for quality and cupping, and weak innovation capacity.

“Many Honduran coffee producers are missing the potential for a better livelihood due to a lack of knowledge about the overall industry,” said Eric Brenner, assistant director of the Center for Coffee Research and Education, who will be among the project trainers. “We will help local farmers by providing in-country training resources and personnel support.”

Brenner said another goal of the training will be to improve Honduras’ overall coffee culture by showing farmers how to develop high-value specialty coffees, improve their harvesting and brewing processes, and “better understand each link in the coffee supply chain.”

“We also want to enhance the expertise and value of cuppers and baristas in coffee-producing countries,” he said. “Currently, this expertise has been provided by those in coffee-consuming countries, and we’d like to bring it closer to home.”

Training Curriculum

Training will be imparted in a modular format, so participants can select the topics that are most relevant for them given their professional background and knowledge. Texas A&M AgriLife certificates will be given upon successful completion of each module. Courses will be given in intensive format: in five days or on multiple weekends to accommodate the work schedules of participants.

The academy’s curriculum is based on three modules:

— Coffee from the grain to consumer. — The botany and production of coffee. — Technologies for managing coffee plantations and processing.

“The training curriculum will include the topic of coffee by-products, which can substantially increase producer incomes,” Brenner said. “It will also address themes related to the entire coffee value chain.”

Brenner said topics will range from coffee genetics and phenology to crop management, flowering and fruiting of the trees, water requirements and management, production of seedings, plant nursery management, pruning and shade, and renovation of coffee plantations.

“Most coffee production is in the context of cropping systems, so we also want to emphasize diversification in cropping systems for both family food security and a means to grow profitable crop alternatives to coffee within these systems,” Norton added. “We will also go through all aspects of coffee processing as well as address how those in the industry may improve their marketing and barista skills.”

While most training will be done in-person or virtual from project facilities at IHCAFE, additional in-person training will be also provided in other locations in the western and central regions of the country where most of the coffee is grown.

“We will collaborate with trainers at the institute to identify opportunities and locations for more educational outreach to coffee growers,” Brenner said. “Often coffee producers respond better when they can see something in person or when they learn about it from another grower.”

Purpose Of The Training

The training program will have three primary objectives:

— Updating the technical field experts who advise coffee producers. — Improving the crop management techniques of coffee farmers, especially women. — Preparing young adults for employment in the coffee value chain and for possibly developing their own businesses within the value chain.

“Fulfilling the first objective will ensure that those who train coffee producers will have the most recent technical information about genetic material for coffee and management of coffee farms in the face of climate change,” he said. “It will also provide them access to the most recent information on the new modalities of coffee processing and utilization of coffee by-products.”

He said fulfilling the second objective will promote generational continuity in coffee production and help create new employment opportunities for youth.

“And all three of these objectives will contribute to strengthening the livelihoods of coffee farming families and the international competitiveness of the sector,” Norton said. “We believe this collaboration with Texas A&M University’s Center for Coffee Research and Education and IHCAFE will help Honduras become one of the world leaders in knowledge and adoption of coffee technology.”

Locally sourced frac sand gets the job done at a discount

Last week, Alpine Silica, a private supplier of frac sand, announced that it will open two new frac sand projects—one in Van Horn, Texas and the other in Fay, Oklahoma, further adding to its existing sand portfolio.

Alpine estimates that the Oklahoma plant and the Van Horn facility will each produce about three million tons of frac sand per year. Alpine expects the Oklahoma project will break ground within the next 30 days and will have a 6-month construction period. Van Horn will be on a similar schedule.

There are currently 32 operating frac sand facilities in Texas. Most are in the Kermit, Voca, and Van Horn areas.

Emerge Energy subsidiary Superior Silica Sands announced last week that it had secured a 25-year lease agreement that encompasses mining rights on 600 acres of land located approximately 60 miles northwest of Oklahoma City in Kingfisher County. Emerge said it expects volume to be about one and a half million tons per year, and it’s planning a 2018 startup for the facility.

In May, Preferred Proppants, or Preferred Sands, said it had begun construction of an in-basin frac sand mine and facility in Oakwood, Oklahoma. The mine is expected to come online in the third quarter of 2018 and will serve the prolific SCOOP, STACK and other Midcontinent formations. Previously Preferred had opened a mine in South Texas and an expansion into West Texas.

The shale boom began with operators fracing only with sand sourced from Wisconsin and Minnesota—Northern White sand. Northern White was preferred for its strength in successfully holding open fissures during fracing operations, but it comes with a price not only for its physical qualities, but to pay for the cost of transporting millions of tons of the heavy material by rail to Texas or Oklahoma or Louisiana.

As cost-cutting became the oil and gas industry’s uniform of choice in the downturn, many operators turned to local, in-basin sand because it’s cheaper and gets the job done. One or two oil and gas companies opened their own in-basin mines.

Pioneer Natural Resources (ticker: PXD) saw the benefits long before the downturn. In April of 2012 Pioneer acquired a large U.S. industrial sands company, which was renamed Premier Silica and later became known as Pioneer Sands in June 2017. This move gave Pioneer a supply of low-cost and logistically advantaged brown sand to use for its own fracture stimulation requirements in the Permian Basin.

Texas sand is located in dunes, making it easier to mine than Wisconsin sand locked in sandstone deposits, IHS analyst Samir Nangia told the AP in January.

“You wash it, you dry it, you put it on a truck and you send it where it needs to go,” Nangia told the AP. “You don’t need a rail load out terminal, you don’t need to do any blasting, you don’t need to do any heavy moving, and then on top of that you only need to truck it 50 miles to 75 miles.”

After being battered with the rest of the oilservice sector in the downturn, proppant suppliers today are seeing a return to busy times.

Demand for sand from the Midwest and demand for local sand in Texas has risen to pre-downturn levels with the return of growth to drilling and completions in 2017 and 2018, and also because of the trend of many companies to use much more sand per foot in their completion schemes.

The return to high demand is “partly what sent Wisconsin sand companies scrambling to build on the Union Pacific line, which offers a direct route to the Permian,” the La Crosse Tribune reported in March.

“Sand producers invested hundreds of millions of dollars in rail terminals where they can store hundreds of cars and build fully-loaded unit trains to trim shipping costs. Still, getting a ton of sand to a well site in Texas can add more than $80 in delivery costs to the $44 price.”

On June 1, two large industrial materials providers—Unimin and Fairmount Santrol closed their merger, resulting in a new public company that controls nearly a dozen Wisconsin facilities in addition to three of Minnesota’s industrial sand operations. The combined companies operate under the name Covia (NYSE: CVIA with 50 plants and 94 operating terminals, including a large number of energy-focused sand operations in Texas and Oklahoma.

Hi-Crush Partners (ticker: HCLP) is another player in-basin. Hi-Crush owns and manages four mines supplying Northern White sand to the industry. In 2017 the company opened the Permian Basin’s first in-basin production facility at Kermit, Texas.

Demand for sand is not just in Texas and Oklahoma. In Louisiana’s Haynesville shale play, for example, last summer Goodrich Petroleum (ticker: GDP) initiated a new completion design using 3,000-5,000 lbs. of proppant per foot, versus the prior design which utilized approximately 1000 lbs. of proppant per foot. Combine that with longer laterals—up to 10,000 feet—the demand for sand is only going to get stronger.

Goodrich Chairman and CEO Walter Goodrich said earlier in the year that its participation in 10,000 ft., high-proppant wells had exceeded expectations.

As operators tweak well completion formulae in different plays, the concentration of sand will vary, but the trend since the beginning of the shale boom has been moving in the direction of longer laterals, more perf stages and more sand per foot.

Most wells need about 12 million pounds of sand, according to Fairmount Santrol product director Brian Goldstein who spoke at the EnerCom Oilfield Tech and Innovation Conference in Dallas in March. “That means bringing 250 truckloads or 50 railcars’ worth of sand to a wellbore,” Goldstein said.

With Texas home to more than half of all U.S. working drilling rigs, and the majority of those engaged in drilling horizontal wells, the demand for in-basin sand isn’t expected to dry up anytime soon.

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