American Oil and Gas Reporter - September 2018 - 20

IndustryDigest
Minnesota Court Backs
County Ban On Mining
Sand For Fracturing
WINONA, MN.-A three-judge panel
of the Minnesota Court of Appeals ruled
Minona County's ordinance ban on
mining sand used in hydraulic
fracturing is legal.
Court documents state Minnesota
Sands LLC secured leases in 2011 and
2012 with Winona County landowners
to mine silica sand from their properties
to use as proppant for fracturing
operations. The count denied requests
for conditional use permits (CUPs) for
other sand mining projects, and
imposed a moratorium to allow county
commissioners to study the issue. After
the moratorium expired, another
company received a CUP for its silicasand mining project.
On Nov. 22, 2016, commissioners
amended the zoning ordinance to
prohibit all industrial mineral mining
within Minona County. The revision-
which differentiated between
construction minerals produced and
used for local building projects, and
industrial minerals, including high
quartz-level stone, silica sand, quartz
and graphite and other materials used in
industrial applications-allowed mining
for construction minerals.
After another company sued the
county, alleging the ordinance was
arbitrary and violated the state and
federal constitutions, Minnesota Sands
filed its own lawsuit, using similar legal
claims. A district court granted the
county's request to dismiss both
lawsuits, and Minnesota Sands appealed
that decision.
According to the appeals court, it
considered two issues: whether the
county may ban all silica-sand mining
without infringing on congressional
authority under the Commerce Clause
of the U.S. Constitution, and whether
the ordinance constituted a regulatory
taking of Minnesota Sand's property.
Minnesota Sands claimed the
ordinance discriminated against out-ofstate interests and was a ban on
exporting industrial minerals mined in
the county, and thus violated the
Commerce Clause. The appeals court
decision stated mined silica sand only
became fracture sand after it underwent
a specific process involving crushing,
cleaning and screening. It pointed out
20 THE AMERICAN OIL & GAS REPORTER

the ordinance outlawed all silica-sand
mining, not just silica sand to be
processed and used in fracturing.
Discussing Minnesota Sands' second
allegation, the court noted that of the
company's six leases, four were
conditioned specifically on it obtaining
required zoning or governmental
approval before the leases' effective
date. Minnesota Sands never applied for
a CUP before the county amended the
zoning ordinance it adds, and thus it
does not have a compensable property
interest for which it is owed
compensation. r

Gas Storage Levels
Increase By 232 Bcf
WASHINGTON-Underground
natural gas storage in the United States
stood at 2.505 trillion cubic feet on Aug.
24, 19.0 percent below the five year
average, according to the U.S. Energy
Information Administration. That was
up 232 billion cubic feet from the 2.273
Tcf in storage on July 20, which was
19.7 percent below the five-year
average. The Aug. 24 storage number
was 645 Bcf less than a year ago, when
gas storage stood at 3.150 Tcf.
According to EIA, gas storage in the
East Region was 640 Bcf on Aug. 24,
13.2 percent below the five-year
average, but 113 Bcf more than on July
20, when storage stood at 527 Bcf,
which was 16.3 percent below the fiveyear average. East Region gas storage
on Aug. 24 was 106 Bcf less than it was
a year ago.
Gas storage in the Midwest Region
stood at 667 Bcf on Aug. 24, 18.2
percent below the five-year average and
143 Bcf more than the 524 Bcf in
storage on July 20, which was 23.6
percent below the five year average.
Aug. 24 gas storage in the Midwest
Region was 170 Bcf less than a year
ago.
In the Mountain Region, EIA says,
gas storage was 157 Bcf on Aug. 24,
16.9 percent below the five-year
average and 12 Bcf more than the 145
Bcf stored on July 20, which was 16.7
percent below the five year-average.
Gas storage in the Mountain Region
was 48 Bcf less than a year ago.
Gas storage in the Pacific Region
was 241 Bcf on Aug. 24, 25.4 percent
below the five-year average and 16 Bcf

less than the 257 Bcf stored on July 20,
which was 17.4 percent below the fiveyear average. Pacific Region gas storage
on Aug. 24 was down 59 Bcf from a
year ago.
In the South-Central Region, gas
storage levels on Aug. 24 were 800 Bcf,
22.3 percent below the five-year
average and down 20 Bcf from the 820
Bcf in storage on July 20, which was
20.2 percent below the five-year
average. The Aug. 24 gas storage level
for the South-Central Region was down
262 Bcf from a year ago. r

Buckeye, Phillips 66 Unite
On Gulf Crude Terminal
HOUSTON-Buckeye Partners LP
has formed a joint venture with Phillips
66 Partners LP and Andeavor to develop
a deepwater, open access marine
terminal in Ingleside, Tx.
The South Texas Gateway Terminal
will be built on a 212-acre waterfront
parcel at the mouth of Texas' Corpus
Christi Bay, Buckeye says, adding the
facility will be positioned to serve as the
primary outlet for crude oil and
condensate volumes delivered off of the
planned Gray Oak Pipeline from the
Permian Basin.
The terminal, to be constructed and
operated by Buckeye, will offer 3.4
million barrels of crude oil storage
capacity, connectivity to the Gray Oak
Pipeline, and two deepwater vessel
docks capable of berthing very large
crude carrier petroleum tankers, the
company says.
"The South Texas Gateway Terminal
will serve as a premier open-access
deepwater marine terminal in the Port
of Corpus Christi," says Khalid Muslih,
executive vice president of Buckeye and
president of Buckeye's global marine
terminals business unit. "The terminal
will provide customers with logistics
solutions that connect the region's
rapidly growing crude oil production
with advantaged access to global
markets." r

Coming In October
The Official Convention Section
for the Oklahoma Independent Petroleum Association fall conference,
Nov. 13 outside Branson, Mo.
American Oil and Gas Reporter - September 2018

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