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Oil price fallout starts to hit Wisconsin’s frac sand mines

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Hi-Crush frac sand mine in Tomah, Wis.

The coronavirus pandemic has had a ripple effect on frack sand mining plants in Wisconsin. At least three plants have shut down this month amid crashing oil and gas prices.

The latest plant closure was reported this week to the state Department of Workforce Development. Eau Claire-based Smart Sand said it was laying off 55 workers at its plant in Tomah, the Journal Sentinel reported.

Hi-Crush Inc. said it would permanently lay off 67 workers. A total of 35 jobs will be cut at a plant in Whitehall and 32 at a plant in Taylor.

“The layoff is in response to unforeseen business circumstances related to the acute and precipitous downturn in oil and gas prices driven by the Saudi/Russia oil price war and the related impacts of COVID-19 on the demand for the company’s sand product,” Hi-Crush said in a letter to state officials.

Hi-Crush did not indicate whether it would be forced to permanently close the facilities, but that is a possibility, according to the letter to the state. 

Western Wisconsin sand has the shape and composition to be widely used in the process of extracting oil and gas from shale rock.

The price of benchmark U.S. crude oil closed at $12.34 a barrel Tuesday. At the start of the year, the price was around $60. In March, drilling for oil was down 25% compared with last year.

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