If someone were to ask you to name the most-extracted materials on Earth, you might answer with fossil fuels or biomass. However, by weight, the answer is actually sand and gravel. Picture sand and most people think of seas, river deltas, deserts and endless miles of beaches — a never-ending resource that seemingly will last forever.However, the exploitation of sand, caused by increased urbanization and unregulated mining of this global resource has already caused environmental damage, impacted water supplies and caused violent conflict. Over the years, very little thought has gone into the socioeconomic and environmental impacts sand mining may have on a region or community."Sand is one of the most extracted materials after fossil fuels and biomass," says Aurora Torres, ecologist and sand mining researcher at the German Centre for Integrative Biodiversity Research. Sand, an unflashy and seemingly infinite resource, is
As oil production has soared, the U.S. frac sand mining industry has boomed over the past 18 months. Yet one frac sand operation in Shakopee was recently idled and another one in western Wisconsin was partly shut down.
The cutbacks may be part of a fundamental shift in U.S. frac sand production away from the Midwest, home to the highest quality Northern White, to lesser-grade sands. As a result, Northern White’s market share is expected to be 43 percent in 2019, down from 75 percent in 2014, according to global consulting firm Rystad Energy.
“That is the reality of things,” said Thomas Jacob, a senior analyst at Rystad.
Oil producers in Texas and eastern New Mexico — by far the nation’s largest shale oil-producing region — have increasingly switched from Northern White to sand produced at a growing number of regional mines.
“Some of this is definitely a structural change,” said Kent Syverson, a geology professor at the University of Wisconsin-Eau Claire and a sand industry consultant.
Regional sands mined in places like Texas are inferior to Northern White, but they are far cheaper since transportation costs are minimal. And so far, oil production hasn’t suffered from using lesser-quality sand, analysts say.
Regional sand has turned out to be “good enough” for the oil industry, Syverson said.
The shifting sand market doesn’t portend the end of frac sand mining in Wisconsin and Minnesota. Northern White is still the staple sand used in North Dakota’s fields, the second-largest producer of oil in the U.S. Even in the Southwest, there will still be some demand for Northern White, as some oil wells — due to local geology — will require a superior quality sand. But the frac industry in the Midwest may have peaked, the data show.
Fracking entails blasting torrents of water, sand and chemicals into an oil well, creating cracks in the shale rock below. Grains of sand keep the cracks open, allowing oil and gas to flow.
Western Wisconsin, Illinois, Minnesota and a few other states are geologically blessed with the best sand for fracking. It’s almost entirely quartz, notably strong and spherical, two essential traits.
The frac sand industry blossomed over the past decade with the rise of shale oil, creating jobs and economic activity — particularly in western Wisconsin, and somewhat in southeastern Minnesota — but also controversy.
Opponents have feared among other things the destruction of scenic areas, health problems from blowing sand and groundwater contamination.
Wisconsin is by far the nation’s largest producer of “industrial sand,” a market driven by frac sand. Minnesota ranks eighth, still making it a significant producer, according to the U.S. Geological Survey.
U.S. demand for frac sand peaked at 61.8 million short tons in 2014, then sank to 42.3 million tons in 2016 after oil prices tanked, according to Rystad data. But as oil prices rallied, it swelled to 79.2 million tons in 2017, and is expected to hit 108 million tons this year.
Not only are higher oil prices spurring more oil production, and therefore more frac sand demand, producers are blasting more sand and water into individual wells, to increase productivity and because the wells themselves are longer.
While 2018 is expected to be a record year for frac sand production, demand flattened in the third quarter and is expected to stay that way through year’s end.
Oil and gas producers have essentially spent much of their budgets for the year putting a damper on drilling and fracking new wells, analysts say. Plus, oil pipeline capacity in the Southwest is currently maxed out, a hindrance to more crude production.
“From 2017 to the middle of this year, we couldn’t produce enough sand for customers,” said Scott Sustacek, CEO of Jordan Sands, a frac sand producer near Mankato. “But then a few things came together to cause a pause in the market.”
Jordan Sands runs one of four mines in Minnesota that together account for most of the state’s frac sand output. Tax data from Le Sueur County indicate that business also has slowed at Minnesota’s largest frac sand producer, the Kasota mine south of St. Peter.
Gravel taxes collected from the Kasota mine slipped from a peak of $81,632 during the last half of 2017 to $77,073 during the first half of 2018.
The Kasota mine plus two other frac sand mines, near St. Peter and in Shakopee, are owned by Covia, a publicly traded Ohio-based company. In late September, Covia said it would idle the Shakopee mine along with three others. Covia didn’t return calls for comment.
When oil prices tumbled in 2015, some mines were idled, including the Shakopee mine, which only reopened in mid-2017. “But this time is different,” said Rystad’s Jacob. Oil prices and overall sand demand are still relatively high.
The U.S. frac sand market was recast after oil prices sank from more than $100 per barrel in mid-2014 to around $30 per barrel in February 2016.
Oil producers had to cut costs to stay in business, and sand wasn’t spared. Since transportation is a big part of the cost of Northern White, oil producers in the Permian Range were able to save thousands of dollars per well by using local sand.
The Permian, which spans west Texas and southeastern New Mexico, has powered the U.S. oil industry’s growth in recent years. It pumps around 3.5 million barrels per day, about the same output as the next three largest U.S. shale oil ranges put together, including North Dakota’s Bakken.
About 50 percent of U.S. frac sand demand comes from the Permian. There are now 16 regional sand mines in the Permian, and while a few of those have been around for years, many have come online in just the past 18 months, said Brandon Savisky, senior analyst at IHS Markit, a research company. More are planned.
And the use of regionally mined sand is growing in other shale oil ranges in south and east Texas, Oklahoma and Louisiana, Savisky said.
Sand mined in these areas doesn’t have the strength or roundness of Northern White.
Still, operators so far haven’t seen initial productivity declines in wells fracked with the finer regional sand, analysts say. However, they don’t have a good picture yet of these wells’ longer-term production.
Their production decline rate may be steeper than wells fracked with Northern White as fissures in rock give way sooner. In other words, the wells might not produce for as long or as much.
“The jury is still out,” Savisky said.
Alfred Tennyson wrote:We are not now that strength which in old days
Moved earth and heaven, that which we are, we are;
One equal temper of heroic hearts,
Made weak by time and fate, but strong in will
To strive, to seek, to find, and not to yield.
Tanada wrote:Still no sign of Peak Sand. Even worse for the doomers the development of alternate types of sand have now reduced the demand for 'premium fracking sand' to the point that demand has actually fallen a little bit despite the boom in additional fracking taking place. Based on the numbers in the article 'Northern White' was 75% of the 61.8 million tons used in 2014 or 46.35 million tons and this year (2018) production is estimated to be 43% of 108 million tons or 46.44 million tons, effectively a distinctions without a difference. IOW the demand from the Permian boom is being met by sand mined in Texas and New Mexico instead the sand being hauled half way across the continent from Wisconsin.
Sand Mining
Texas-Size Glut of Frack Sand Means 19% Drop in Prices
Just a year after rushing into America’s busiest oil field with new mines, frack-sand producers may have overdone it.
West Texas sand used in the hydraulic fracturing process will drop 19 percent this year to about $30 a ton compared to 2018, according to industry consultant Rystad Energy AS. Sand pricing is a key financial input for oil explorers because fracking is the most expensive phase in drilling an oil well.
coffeeguyzz wrote:Cog, please don't give those whack jobs another reason to display their ignorance.
(If only Mr. Short had a computer model to assess Peak Stupidity. Now THAT is something I'd consider shelling out a few bucks to see).
rockdoc123 wrote:There has been a significant shift from sand or silica proppants towards ceramics or other types. Ceramics as an example have higher yield stress under compression (they don't crush as easily and hence keep fractures open) their size and shape can be controlled such that fracture porosity and permeability are maximized and they are thermally and chemically very stable which means there is little chance of diagenesis which could destroy permeability. Operators tend to use sand because it is currently cheaper but as it becomes more scarce and costs rise there will be further converts to using the alternative proppants.
The middle east has oil and sand. Nobody wants the sand.
Newfie wrote:VT,
Off topic but I can’t resist, and you should appreciate.The middle east has oil and sand. Nobody wants the sand.
They have the wrong kind of sand. There is a global shortage of sand with the right characteristics, rough enough. Apparently the right sand is found in river deltas. NK was just found harvesting and shipping sand to China in contravention of UN sanctions. Dredging is destroying everything deltas.
IIRC the desert sand is weather worn, too smooth, too soft.
My Wife drove to a market near a sea wall they had just built. Looking for a parking spot she wheeled into a nice flat area of clean rocks. But it wasn’t the broken rock used in road beds, they had scraped it up off a beach and they were all nice round pebbles. The car immediately sank right to the frame.
Alfred Tennyson wrote:We are not now that strength which in old days
Moved earth and heaven, that which we are, we are;
One equal temper of heroic hearts,
Made weak by time and fate, but strong in will
To strive, to seek, to find, and not to yield.
vtsnowedin wrote: Actually sand quality comes from the parent rock it was crushed from (or eroded in the case of natural sand). The best parent rock is quartz due to it's hardness. Some sandstones would be fine and others not, depending on what sand was compressed into the stone millennia ago. Yes they can crush out any sand they want from solid rock but that takes energy so costs more then just digging it out from a glacial moraine deposit.
Alfred Tennyson wrote:We are not now that strength which in old days
Moved earth and heaven, that which we are, we are;
One equal temper of heroic hearts,
Made weak by time and fate, but strong in will
To strive, to seek, to find, and not to yield.
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