Wisconsin is not unaccustomed to sand mining, as the practice has gone on in the state for centuries. But recent years have seen a significant uptick in sand mining proposals and projects in the Badger State, largely due to the need for frac sand to support the petroleum industry. As the frac sand industry has grown in Wisconsin, Ruder Ware has made sure it can provide the industry with the legal expertise it needs.
A full-service law firm, Ruder Ware employs more than 40 attorneys at its locations in Eau Claire and Wausau. The firm offers services in the following areas: business transactions such as commercial contracts, real estate, and intellectual property; litigation and dispute resolution of a variety of commercial issues including environmental and land use regulation; employment, benefits and labor relations on the management side; and trusts and estates. Ruder Ware traces its roots back to 1920, and although it has changed and evolved greatly in 90-plus years, its commitment has continued to be the provision of high-quality legal services and community service.
Much of the state’s sand has characteristics that are highly sought-after for fracking, which has driven growth in mining permit requests. After extraction, the sand is shipped outside of the state for use at oil and gas fields. Sand mines in Wisconsin are governed by state requirements that oversee all nonmetallic mining projects in the state. Their owners must obtain air and water permits and follow state reclamation laws. They are also subject to hazardous waste regulations and fall under the requirements of the Safe Drinking Water Act.
As the frac sand industry grew in Ruder Ware’s service area, the firm decided to put together a focus group of attorneys to serve mining companies and ancillary businesses. Because Ruder Ware is a full-service business law firm, it is familiar with the legal and regulatory issues impacting the frac sand mining industry.
“We naturally moved into this work so we could provide service to clients as they decided they wanted to locate facilities into this region of Wisconsin and needed help understanding regulations and dealing with townships,” says Derek Prestin, one of the firm’s attorneys and a member of its frac sand focus group.
“We saw a need as clients came to us around seven or eight years ago as the frac sand industry started to take hold in the area,” says Joe Mirr, attorney and member of the firm’s board of directors. “We began focusing our efforts on learning what we needed to support them.”
Companies involved in the frac sand industry need legal assistance in areas including real estate, environmental law, commercial contracts and other transactional and litigation matters. Ruder Ware can help clients with mining-related issues ranging from exploration through plant permitting, including regulatory approvals, real estate purchase and lease transactions, commencement of mining operations, and plant operating and personnel matters.
The firm has negotiated many royalty lease and land purchase agreements for landowners and mining companies. It has also provided clients with services on contracts that are exclusive to the frac sand mining industry, such as confidentiality and exploration agreements, royalty leases, options, easements, rail siding agreements, road agreements, mining agreements with municipalities, and trucking agreements.
Other Ruder Ware services include the formation of entities to carry out mining and to own real estate, and it can assist with obtaining permits, zoning, transportation contracts, employee matters and reviewing environmental reports and drilling test results. Ruder Ware can also review utility supply agreements for processing plants, handle financing and plant construction matters, help with mergers and acquisitions of mining companies and provide litigation and alternative dispute resolution services, as well as services around tax and estate planning issues.
“We can do any type of legal work that a mining company or landowner needs, from the beginning all the way through operations,” Prestin says. “We can research all the way down to the level of the towns and municipalities, because regulations around frac sand mining often drill down to the town and county level.”
In addition, the firm is experienced at working with many of the ancillary companies and organizations involved in the industry. These include engineering firms, railroad companies, trucking companies, surveyors, title companies and commercial lenders, as well as government officials in many state and municipal agencies.
“We work with a lot of small businesses inside and outside the frac sand market,” Mirr says. “Many small businesses provide services to the mines.”
Ready to Change
Ruder Ware is helping its clients adapt to changes in the market. Prestin says the number of regulations at the local level has increased as the industry has picked up steam.
Both Prestin and Mirr say the most important investment the firm has made is to ensure that its attorneys are educated about the industry’s specific needs. Ruder Ware attorneys regularly attend continuing education seminars and national conferences on frac sand mining and mining in general. This has helped the firm to learn about all aspects of the industry, from its laws and regulations to its technical and business aspects.
The industry is in a state of flux because the price of natural gas has gone down. This pulled down the price of sand, too. But as the economic conditions in the industry evolve, consolidation is likely to take place. Whatever the state of the market, it will need legal services.
“There will be some dominant players that will take over the market as the years go by, and in a few years the second tier of properties around projects will need to be acquired as the initial properties are mined out,” Mirr says.
“We feel well situated to continue to serve those companies in the frac sand mining industry as their business changes,” he adds.