FRAC SAND

In 2023, the hydraulic fracturing sand (commonly known as frac sand) market was valued at around $7.6 billion globally. Although demand for frac sand increased, spot prices declined significantly in 2023. The Permian Basin again accounted for just over half of total U.S. proppant demand, with consumption increasing 10 percent year over year. Frac sand is a high-purity silica sand with specific physical and chemical properties. In the fracking process, a mixture of sand, water and other compounds are pumped down a well at high velocities into very small, induced fractures. The frac sand particles become lodged in the fractures, “propping” them open to allow increased flow of oil and natural gas from the well. A range of particle sizes is typically used during the fracking process. These size ranges are often referred to as the mesh and are based on the ASTM International test sieve sizes. Product mesh sizes include 20/40 mesh, 30/50 mesh, 40/70 mesh and 100 mesh, which is sometimes referred to as 70/140 mesh. The name defines the particle size range, and the two numbers separated by a slash indicate sieve size. By convention, the size range includes particles small enough to pass through a sieve indicated by the first number but are retained on a sieve of the second number. The American Petroleum Institute (API) and the International Organization for Standardization (ISO) have published testing procedures and standards for frac sand, which are defined in API RP 19C/ISO 13503-2, “Recommended Practice for Measurement of Properties of Proppants Used in Hydraulic Fracturing and Gravel-packing Operations.” Beyond size, ideal frac sand material will exhibit the following: High silica content: Mineralogical purity is indicative of a mature deposit that has endured physical and chemical weathering, reducing impurities that are physically weaker or that may negatively interact chemically with other fracking fluids.Homogeneous grain size: Individual well conditions drive completion design, and desired grain sizes and mixtures are designed to optimize recovery. In general, larger grains increase permeability but are less durable, while smaller grains are stronger and result in less permeable conditions.High sphericity and roundness: Sometimes referred to as the Krumbein shape factor, sphericity and roundness primarily impact grain strength and completed porosity. More rounded and spherical grains are generally stronger and result in an increased flow of oil and gas during extraction.High crush resistance: In order to be effective, individual grains must be able to withstand pressures of 2,000 to 10,000 psi or more. Crush resistance is measured as a percentage of fines generated when a sample is exposed to increasing pressures. A k-value is assigned, indicating the greatest pressure withstood while generating not more than 10 percent fines by weight. For example, a k-value of 9 indicates a sample generating no more than 10 percent fines by weight when subjected to 9,000 psi, but more than 10 percent fines when subjected to 10,000 psi.Low solubility: Solubility tests provide an indication of the amount of undesirable contaminants. Exposing a proppant to a 15 percent solution of hydrochloric-hydrofluoric acid (HCl-HF) may result in the dissolution of part of the proppant, which can reduce fracture permeability.Low turbidity: Turbidity is a measure of clays, silts and other fine-grained impurities, which can negatively impact the fracking fluid. Figure 1 Total U.S. rig count, 2023. These API standards represent ideal proppant material. However, in recent years, operators have made compromises in proppant quality to drastically reduce well completion costs. Uses While there are few alternate uses for frac sand, geologic deposits yielding frac sand material can produce glass, foundry, recreational and construction sand, as well as high-purity ground silica products used in coatings, epoxies and ceramics. Production Although it was a challenging year for tight shale plays with the total rig count decreasing, U.S. frac sand demand continued to increase, according to estimates from Lium Research, an energy market research firm. With frac efficiency gains and drilled but uncompleted (DUC) well inventory being drawn down, frac sand managed to squeeze out a 7 percent increase in consumption year over year in 2023. A new all-time high demand of 121 Mt was pumped for the year, according to data prepared by Lium Research. The Permian Basin accounted for just over half of total U.S. proppant demand, and consumption there increased 10 percent year over year. The total North American rig count decreased in 2023. Based on data from Baker Hughes, the total rig count in the United States fell from a maximum of 775 to 622 by the end of 2023. The months of May through September saw the greatest reduction before the count leveled out in the fourth quarter. Pricing West Texas Intermediate (WTI) oil prices in the first half of the year fluctuated between $67 and $83 per barrel. Beginning in July, prices increased steadily to a high of $93 per barrel in late September. Prices then fell in the fourth quarter, ending the year in the low $70s per barrel, according to data from www.macrotrends.net. Although demand increased year over year in 2023, Lium Research estimates that spot prices for frac sand declined significantly in 2023 as supply additions outstripped demand growth and quarterly consumption peaked early in the year. For example, spot prices in the Permian Basin declined by about 40 percent during 2023, according to Lium Research data. As 2023 ended, both Permian and Eagle Ford local frac sand spot prices, free on board (FOB) from the mine, were hovering near two-year lows. In its Nov. 13, 2023 Benchmark and Analysis report, PanXchange cites a fourth-quarter average spot price for frac sand of around $33/t. Trends and outlook The market research firm IMARC Group projects a frac sand market compound annual growth rate of 7.4 percent during 2024 to 2032, bringing the market to an estimated $14.7 billion by 2032. Increased demand for petroleum products globally is cited as a major market driver for more oil and gas drilling, and thus demand for frac sand. Sustainable mining practices and logistics are gaining attention as energy efficiency and environmental responsibility occupy stakeholder concerns. North America continues to lead the market; however, markets in China and India represent growing market segments. References Baker Hughes: North American Rig Count https://rigcount.bakerhughes.com/na-rig-count PanXchange Sand: Benchmarks & Analysis 11.13.2023 https://panxchange.com/panxchange-sand-benchmarks-analysis-11-13-2023/ Gordon Brothers: Industry Insight https://www.gordonbrothers.com/insight/energy-frac-sand/ Frac Sand Market Report by Type (White Sand, Brown Sand, and Others), Application (Oil Exploitation, Natural Gas Exploration, and Others), and Region 2024-2032 https://www.imarcgroup.com/frac-sand-market Lium Research: Insights from Mr. Joseph Triepke https://lium.com/ USGS: Frac Sand in the United States—A Geological and Industry Overview https://pubs.usgs.gov/of/2015/1107/ USGS: Mineral Commodity Summaries - 2022 https://www.usgs.gov/centers/national-minerals-information-center/mineral-commodity-summaries US Silica: SIL-CO-SIL https://www.ussilica.com/products/sil-co-silr www.macrotrends.net: WTI Crude Oil Prices https://www.macrotrends.net/2516/wti-crude-oil-prices-10-year-daily-chart

FRAC SAND

Authored by:
Jack Sackrider P.G

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To view the past issues of the UCA magazine you must be a member of SME/UCA.

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