U.S. sand suppliers are under significant pressure as a result of developments in the unconventional hydrocarbons industry, Reuters reported on November 11. As shale oil and gas operators scale back their drilling plans, the gap between supply and demand of the sands used in hydraulic fracturing (fracking) operations is widening, the agency said.
On the supply side, sand companies have worked so diligently to meet oil and gas developers’ need for fracking sand that they have created a glut. More than 20 new mines have opened in West Texas in recent years, enough to push prices down significantly.
Joseph Triepke, the president of Infill Thinking, noted that sand companies had boosted supply by almost 150% over the last few years, even though demand grew by only 50% during the same period. “If you look at Permian frack sand prices, we estimate they are down about 80% from the peak,” he told Reuters in an interview.