Local impacts of foundry, sand mine
Waupaca Foundry accounts, either directly or indirectly, for more than 10 percent of Waupaca County’s total economy.
A study by Mike Koles, community development educator with UW-Extension, and Steve Deller, professor of applied economics at the University of Wisconsin-Madison, was recently presented at a public hearing on the proposed sand mine in the town of Union.
The study examined the economic impact of the sand mine and its primary customer, the foundry, on Waupaca County.
“One out of every $10 and one out of every 10 jobs in Waupaca County is due to the foundry,” Koles told the nearly 200 people at tending the Nov. 1 hearing.
Koles said the foundry in Waupaca employs a total of 1,620 people. Of those, 1,410 live within Waupaca County.
Foundry employees living within the county earn $82.5 million in total wages annually.
Foundry employees in turn spend their money at local grocery stores, restaurants, retail stores and medical clinics, purchase homes and cars, and pay taxes.
Due to the multiplier effect, a portion of every dollar earned in wages circulates several times through the local economy.
“When the employees spend their paychecks, they create an additional 425 jobs elsewhere in the county economy, and these additional jobs generate $11.3 million in labor income annually,” according to the study. “An additional $12.7 million in non-labor income is also generated, for an additional total income impact resulting from Waupaca Foundry employees spending their labor income in the county economy of $24 million.”
The study estimates that foundry wages have a total economic impact of more than $146.5 million in Waupaca County.
In addition to paying wages, the foundry also purchases $226.5 million in goods and services from area businesses.
“This money also spins in the local economy, leading to creation of 1,024 jobs, $30.9 million in labor income, $55 million in total income and $307.5 million in industry sales,” the report said.
The study concludes that if the foundry did not exist, “a total of 2,859 jobs would be lost.”
The foundry uses up to 900 tons of sand per day, according to John Weisbrock, vice president of chain supply at the foundry.
“Sand is a key raw material,” Weisbrock said. “Any time you can locate a supply that’s close to demand it creates efficiencies.”
Weisbrock said the foundry is competing to sell its products in a global market, while at the same time competing with the oil and gas industry for the supply of sand.
Due to the growing use of hydraulic fracturing to extract natural gas, the price of sand has risen dramatically.
“It’s not just about our jobs today, but for future generations living in our community.”
The UW-Extension study also projected that the proposed sand mine will employ 34 workers, who live in Waupaca County, with a total payroll of $2 million.
“After considering the multiplier effect, the sand mine will create 57 jobs, $2.8 million in labor income, $4.8 million in total income and almost $11 million in industry sales,” the study said. “The proposed sand mine would be a significant job and income creator.”
UW-Extension conducted a second study, examining the sand mine’s potential economic impact due to the loss of farmland.
Prepared by Koles and Greg Blonde, UW-Extension ag agent, the study said, “Soil at the projected mine site is classified by USDA soil scientists as Hortonville series or ‘prime’ farmland, the most productive soil in Waupaca County.”
The study calculated the loss of farmland over a 64-year period, beginning with 42 acres the first year when the mine is started and the processing facility built.
By the end of 64 years, a total of 117.3 acres productive farmland will be lost due to the mine.
Over the past decade, corn prices have ranged from $2.24 per bushel in 2002 and 2003, to a low of $1.86 in 2005 and a high of $5.67 in 2011.
As a consequence of the volatility of corn prices and yields, the study’s estimates for the economic impact of lost farmland ranges from $600 to $1,200 per acre. Those figures include the multiplier effects
Over 64 years, the lost farmland will have an economic impact ranging between $3 million and $6 million.
Koles also presented a fact sheet on how the sand mine’s high-capacity well may impact local groundwater.
The well is expected to draw up to 500,000 gallons of water per day.
Koles said the fact sheet was in response to questions the UW-Extension office had received regarding the sand mine.
Of the 23 questions and answers, the most common phrase was, “More data is needed.”
While noting that there was little concern that the aquifer where the sand mine would be located “is very prolific,” Koles said, “Until you do some groundwater modeling, you really don’t know.”
Paula Leher-Engelhardt, a geologist with HydroGeo Solutions LLC, discussed the cone of depression that would form in the aquifer around the sand mine’s high-capacity well.
The cone of depression is a model that measures the drop in water levels and pressure around a high-capacity pump.
At 500,000 gallons per day, the groundwater level would drop 50 feet to 70 feet within a 50-foot radius of the well, Leher-Engelhardt said.
At 500 feet from the pump, the water level would drop between 2.5 and 4 feet, and at 1,200 feet, there would be a drawdown of about 1 inch, she said.
Leher-Engelhardt also noted that 500 feet is within the boundaries of the sand mine parcel in three directions and a short distance across Dennison on the south property line.
“For the first two weeks, the well will run at full capacity 24/7. After that, the well will run three to four hours per day,” she said.
Steve Sorenson, a spokesman for AF Gelhar Mining Co., said most of the water used in the sand washing process is recycled through the settling ponds.
During the four months of winter, it is too cold to wash sand, so the pump will not be operating, he said.
He also assured those at the hearing that Gelhar does not add chemicals to its product that may contaminate the groundwater.
“We will replace any well that may go bad because of our activities,” Sorenson said.
When asked about private wells located around Gelhar’s mine in Markesan, Sorenson replied, “We’ve had no complaints. None.”
The UW-Extension groundwater information sheet compares the 500,000 gallons per day pumping rate to the aquifer’s replacement rate for 160 acres.
“Assuming an annual recharge rate of 10 inches per year, 160 acres would represent 43.4 million gallons per year,” the UW-Extension report said. “If the mine were pumping continuously at a rate of 500,000 gallons per day, this represents 182.5 million gallons per year. This amount is just over 4.2 times the amount of normal recharge of a 160-acre piece of land.”
The UW-Extension concluded that “more data is needed to show where the cone of depression will be located, as well as the area that will be impacted and what effect the water withdrawal will have on the surrounding rivers and streams and wetlands.”