The commodity known as frac sand is a quartz silicate traditionally mined for use in foundries and glassmaking, with some application in the drilling industry.
The recent uptick in demand for the product is directly linked to the US shale fracking boom which began in 2005, hence the silicate’s newly popular name.
Fracking uses horizontal drilling and high-pressure injection of chemicals, water, and frac sand to produce trapped hydrocarbons from shale formations. High-pressure drilling liquids fracture rock formations around the wellbore, creating cracks and fissures and widening and continuing existing ones.
Frac sand is key to the finished well’s a success as its hard silica particles act to permanently prop open the new networks of cracks. After the well is fracked, frac sands or proppants remain to hold open the flow channels of hydrocarbon egress.
In addition to naturally occurring silicate sands, manufactured ceramic particles, also known as frac sands, are sometimes used for fracking. Either product can be resin-coated with greater resilience and smoothness. Smoother, rounder particles better facilitate hydrocarbon flow.
Ceramic-based frac sands are amenable to production controls and sensitive to reduced manufacturing costs abroad, and, predictably, Chinese frac sand suppliers have gained a sector of the ceramic market. Whatever their advantages, however, ceramic particles continue to be six or seven times the cost of natural frac sands.
Moreover, mechanical separation techniques employed in frac sand mining allow natural sand particles to be very accurately sized. Further, high-grade, crush-resistant sand is easily sourced through existing domestic mines, most notably in Wisconsin. For all these reasons, natural frac sand remains the industry choice.
However, not all natural frac sand wholesale suppliers are equally placed to enjoy the burgeoning market. Though most sellers benefitted from the initial bonanza in frac sand price and demand, there were immediate problems with delivery.
Transporting the heavy commodity was many times the cost of production. Moreover, truck and train links to oil fields were unprepared for the fracking surge. What followed was a market accommodation whereby logistics companies moved to acquire frac sand mining companies and larger frac sand suppliers invested in rail transportation, trans-loading docks, and storage facilities.
One of the larger suppliers, US Silica also moved to publicly traded shares. In 2013, frac sand demand experienced a hiatus; smaller suppliers were hit. The market that has now emerged is a consolidated one in which seven large frac sand suppliers appear poised to reap the benefits of the trade.
Rising share prices are only one sign of good times ahead. There is also a growing trend towards using greater frac sand volumes in initial drilling.
Additionally, increasing volumes of frac sands are being employed in refracting older wells, a practice is shown to increase production.
With no real signs of alternate energy resources obviating a need for gas and oil, and with frac sand volumes rising both overall and within existing fracking applications, most analysts predict that the frac sand market is set to enjoy seven to ten years of steady growth.
Good News for Frac Sand
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