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Stuart Hampton

Another US Shale Oil and Gas Winner: Sand Mining

by Stuart Hampton | Dun & Bradstreet Editor

June 2, 2015 | No Comments »

Fracking-Sand_FlickrCC-webethere_8429704684_cb8ed9dc2a_k_1100pxAcross the US, a decade of shale-based oil and gas production has created another growth industry — sand mining.

According to a new report from the US Geological Survey, the US continues to be the world leader in frac sand production.

Though hydraulic fracturing (fracking) was not new to the oil and gas drilling industry, it was Mitchell Energy & Development in the 1990s that first used fracking to break up shale (a 250-foot-thick layer of impermeable shale rock in the Barnett formation near Fort Worth).

That company proved that volumes of natural gas could flow freely from fracked layers of shale, setting the stage (with EOG Resources’ adoption of horizontal drilling technology) for the boom in developing North American shale plays (Bakken, Eagle Ford, Marcellus, and others) in recent years.

Fracking with horizontal drilling has enabled the discovery of more than 1,000 trillion cu. ft. of gas and tens of billions of barrels of oil across the US.

A key ingredient in the fracking process is the use of proppants — solid materials, typically sand or man-made ceramic materials, that keep a hydraulic fracture open during fracturing activities to release oil and gas from the shale.

While ceramic materials and even a hard little bean from India called guar are also used as proppants, the most readily available source for US drillers is sand, in particular highly pure silica sand from deposits in the Upper Midwest.

The US is the largest producer and consumer of frac sand in the world, with nearly 70% of 2014 domestic production coming from the Great Lakes Region, primarily Wisconsin and Minnesota, where the premium sand is known an Northern White (with a high silica content, crush resistant, and with a low solubility).

Texas is also a major player (although the Texas frac sand, known as Brady sand, is of slightly lower quality). Additional secondary frac sand sources are located in Oklahoma and Arizona.

Wisconsin leads the country, producing 24 million metric tons in 2014. Since 2010, Wisconsin has gone from five frac sand mines and five processing plants to 63 mines and 45 processing facilities (as well as another 27 railroad loading facilities for shipping sand across the US).

The massive increase in fracking over the past few years has caused the US frac sand industry to take off. According to the report, the $2.2 billion North American frac sand market is expected to expand almost 9% by the end of 2016.

As with the US chemicals industry (which has benefited by tapping the supply of the liquid by-products of shale gas drilling to build new chemical plants), the shale boom has created another winner — the sand mining industry.

British editorial veteran Stuart Hampton has been covering oil and gas companies for Hoover’s since the Neogene-Quaternary period. Well, actually, since the early 1990s. For the best overview of the oil industry and its history he recommends Daniel Yergin’s “The Prize.” You can also follow Stuart on Twitter.

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Photo by Carol Mitchell, used under a Creative Commons license.

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