Mason County News
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Proppant Responses to Local Questions
Wednesday, November 30, 2011 • Posted November 30, 2011

Q1 (Michael Murphy). What landscape restoration plans does Proppant Specialists have for the operations in the Katemcy area?

A1. The company plans a long-term investment at this site, with mining lasting possibly up to 60 years. As mining is completed in individual areas of the property, unsold sand, fine sand, and clay and silt washed from the sand will be placed in the mined areas to fill in those spaces and prepare them for future reclamation. These individual areas can be reclaimed as the work progresses. When all mining is completed, the land will be restored to its current state or better, and will generally be suitable for agricultural use.

Q2. Who are the persons or consultants who have been commissioned to prepare these reclamation plans?

A2. When permitting for Proppant Specialists’ (Proppant) Mason County operation is completed and approved, the company will engage experts to develop a formal reclamation plan for the site and will make this available for review by the community.

Q3. What experience does Proppant Specialists have with the reclamation of previous locations where it has conducted sand mining operations?

A3. Both of our current sand mines, one in neighboring McCulloch County, Texas, and one in Missouri, are still operating. We work hard to be good neighbors in our current operations and we intend to continue being good neighbors when mining operations cease. As each location is different, no single reclamation plan will fit all properties, but it is our goal - as stated above - to return each site to its current or better state.

Q4. If Proppant has reclaimed previous sites, is it possible to see these sites to learn what has been done in the past at other locations?

A4. All of Proppant’s mines are still operating.

Q5. Are there any previously mined Proppant Specialists operated sites that are no longer active but where reclamation activity has not taken place?

A5. All of Proppant’s mines are still operating.

Q6. If so, can these sites be seen?

A6. All of Proppant’s mines are still operating.

Q1 (Cherie Glass). Mason County is experiencing the worst drought in 70 years. The residents of the City of Mason are not allowed to water between 9 a.m. and 7 p.m. and then on one specified day per week. Don’t you think it is inconsiderate of your business to demand 400 acre feet of water per year in order to wash sand? Will you expect to be able to pump it any time of day or night on any/all days of the week? The pumps on that property had previously been permitted for agricultural use - to feed people. Your plant will be using water for the purely financial interest of a majority of foreign investors – correct? What are you going to do to protect the water in Mason County so everyone that lives here will have enough?

A1. Almost all businesses and industries use some water. A community that will not make water available for business and industry usage will not be able to support economic development and growth, and thus will not be able to provide new jobs or maintain existing employment for its citizens. The good news is that, compared to many other industries – including farming, sand processing is a relatively low water-use business.

The seven wells permitted by the Hickory Underground Water District (HUWD) on Proppant’s property have been in existence for decades. These same wells were previously permitted to allow usage of an amount of water far in excess of the amount now permitted.

If these wells were used for farming irrigation, as wells on some nearby properties are used, there would be a much more significant drawdown of water per hour of operation during the growing season. In other words, a greater volume of water could be pulled from the wells in a shorter period of time – with a greater potential to negatively impact the water supply.

In contrast, Proppant’s mining and processing operations will have a slower, stable water usage that should have less impact on the water supply. As a comparison, public records document that Proppant’s similar operation in neighboring Voca, Texas, used significantly less than 400 acre-feet of water in 2010.

Water conservation is important to our company, not only to be a good steward of the environment, but also because it is good business — pumping water costs money. In addition, Hickory Underground Water District (HUWD) rules provide that, if more stringent water restrictions are needed in the future, Proppant may be required to curtail or even cut off its water usage to ensure sufficient water for citizens’ use. We have a vested interest in conserving water because if our company negatively affects the availability of water, it could also affect our ability to operate our business.

As for foreign investment in Proppant’s parent company, FTS International (FTS), economic research reveals that foreign investment in companies increases the amount of capital in the local economy, such as equipment, buildings, etc. The increase in the quantity and quality of tools for use in converting one set of goods (labor and other inputs) into another (finished output) raises productivity and gross domestic product (GDP). Because about two-thirds of GDP goes to labor as wages, salaries and fringe benefits, rising output means higher wages or more employment. Thus, foreign investment raises labor productivity, income and employment. 1

In addition, I myself am also an investor in Proppant’s parent company, FTS. I was raised in Kansas and now make my home in Fort Worth. As Chief Executive Officer of FTS and Proppant, and a Texas resident, I have a personal stake in this company’s success and in caring for the environment in Texas. The president of FTS, a Texan who lives in Weatherford, is also a shareholder in the company.

FTS employs more than 4,000 people in the United States, with almost 3,000 of those based in Texas. Our company continues to grow domestically and internationally, and we plan to hire more employees into 2012. With the U.S. unemployment rate staying around 9 percent for most of 2011, it goes without saying that we should help support a growing U.S. industry that hires American workers. Proppant’s jobs will remain in the U.S. because this is where the sand that we mine and process is located. If not for companies like FTS that are generating new jobs with good pay and benefits, including health insurance, paid time off and a 401(k) plan with a company match, both the Texas and U.S. economies would be negatively affected.

(Endnotes)1 From The Concise Encyclopedia of Economics, Foreign Investment in the United States, by Mack Ott, an economist with the Barents’ Applied Economics Group. He was previously a research economist with the Federal Reserve Bank of St. Louis.

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