Here’s a really interesting presentation (with some great maps) that the Wisconsin DOT presented in Winona recently.
WI 53 transload facility
These are the bullet-points on the last page
Supply:
2011 – 28 million tons in US Production
Estimates project 15% annualized growth
Existing NW Wis mines have capacity exceeding 60 million tons/year
Demand:
Oil Prices/Supply
Gas Prices/Supply
New Technology
Proppants
Alternate Methods to fracking
Other Energy Sources
International Markets
Logistics:
Getting sand to transload facilities
Rail/Barge Limitations
Increasing Market Share to Limited Number of Firms
Several things leap out at me. Current demand projections indicate that existing mines are more than capable of handling demand for a good long time — so my “first mover advantage” argument stands. Late-comers (like the promoters here in Buffalo County) are going to find it hard to compete with existing suppliers on cost or price.
There’s a map in the presentation that cheers me up about Highway 88 — they show the whole road as having “geometry” issues. Just as we’ve been saying for months.
They mention the trend toward vertical consolidation, where the fracking companies are moving toward owning their own mines. This a) stacks the deck against our late-arriving small-guy operators and b) also stacks the deck toward them adopting a “flipping” strategy.
There are some fabulous pictures of the transload facility up on Highway 53 looks like. I’ve posted one here, but there are more. This is what’s coming to Highway 35 if the proposals get approved. Interestingly, the BN line doesn’t have the capacity to add many trains right now — so it’s not clear that the facility would actually be able to ship much product even if it’s built.
All that and a box of chocolate.
Click HERE for the full presentation (3.5 mByte PDF file)