Rising Shale Gas Extraction Driving Demand for Sand-Based Proppants
Despite efforts to use renewable energy, crude oil and natural gas continue to fuel the world. Though the growth of the oil & gas sector has slowed in recent years, new offshore and onshore wells are still being dug around the world. The gas and oil are buried deep within the bedrock, which needs to be cracked open for the commodity to flow. After the cracks are created, they need to be kept open with the application of continuous pressure, so that they don’t close up over time.
Proppants are majorly used during the extraction of tight gas, shale gas, liquified natural gas (LNG), and coal-bed Methane and oil refining. Among these, the highest volume of proppants is used for the extraction of shale gas, as the E&P activities for this commodity are growing around the world. This and the fact that frac sand is the most-cost-effective of such materials are also the reasons frac sand is being increasingly used as a proppant. To put things into perspective, the Oil & Gas Journal had projected an increase in the demand for cheaper sand proppants to 110 million tons in 2018 to 45 million tons in 2016.
Along with sand, ceramic- and resin-based proppants are also finding increasing usage, as these materials are stronger and can withstand the stress inside deep wells better. Additionally, resin-coated materials are ideal for wells that display a low permeability and multiple-stage fracturing. Same is the advantage offered by ceramic proppants, which can withstand a pressure of up to 10,000 pounds per square inch (psi), thereby letting E&P companies drill way deeper into the earth for shale gas.
Most of the resin-coated materials used to keep hydraulic fractures open are the non-phenolic kind, and they lead to air and water pollution. To deal with this problem, an eco-friendly resin-coated material, which is non-phenolic in nature, has been introduced by several chemical companies. This variety doesn’t impact the environment much during its application, and it is also energy-efficient to produce. Therefore, with the increasing awareness about eco-friendly E&P activities, Dow Chemical Company and Preferred Sands, which came out with this material, can expect to target more oil & gas companies.
In this regard, North America, which is the largest proppant market, is expected to witness the highest consumption of such cost-effective materials. This would be a direct result of the increasing E&P activities in the region. For instance, the Railroad Commission of Texas (RRC) says that between January and March 2018, 2,712 wells became operational in the U.S., compared to 1,925 during January–March 2017. In recent years, E&P companies have been encouraged to increase their activities by the slight recovery in the prices of oil and gas.
Therefore, the demand for various types of proppants will be driven by the constant increase in oil & gas drilling activities, especially in North America.