Mining operations and infrastructure are growing to support the demands of hydraulic fracturing.
There’s a sand boom going on in the U.S. and a lot of companies – as well as the states in which they operate – are taking advantage of it.
Sand – a main ingredient in hydraulic fracturing – is becoming a hot item right now thanks to the growth of fracking in places like Pennsylvania and North Dakota.
According to PacWest, a consulting firm based in Houston, sand use has increased 25 percent since 2011 and another 20 percent rise is expected over the next two years. The firm also says companies are going to use about 56.3 billion pounds of sand this year for fracking operations.
Preparing sand for fracking involves sifting it for the correct-sized crystals, separating out contaminates, and washing and drying it.
In 2013, an amount of sand equal to four Great Pyramids, 200 Eiffel Towers or 45,000 Chevy Tahoes was used in fracking, according to Russell Gold, a reporter for the Wall Street Journal and author of “The Boom: How Fracking Ignited the American Energy Revolution and Changed the World.”
Wisconsin has seen a big impact from the increased demand for fracking sand. Wisconsin is a significant source of white sand ideally suited for the process, and has seen a huge increase in sand mines and other facilities.
According to Deb Dix, environmental enforcement specialist with the Wisconsin Department of Natural Resources, there are now more than 100 sand mines, loading and processing facilities in Wisconsin, up from five sand mines and five processing plants operating in 2010. Many fracking outfits prefer sand from Wisconsin because it is bigger and has rounder grains better suited for holding open larger pathways.
“It is definitely an industry that has grown quickly in Wisconsin and continues to grow,” Dix says.
Railroad companies are also benefiting from the boom, with a growing number of boxcars carrying sand to shale fields in Texas, New Mexico, North Dakota and Pennsylvania.
Union Pacific Railroad says they shipped 94,000 railcars of fracking sand in the first half of 2013 – an increase of 20 percent over the same period in 2012. Canadian National Railway Co. is spending in excess of $68 million over the next several years to upgrade more than 100 miles of track in Wisconsin so it can boost its shipments of sand out of the state.
Bryan Shinn, chief executive of U.S. Silica, says it takes about 25 railcars of sand to frac one well, and some companies are experimenting with even larger volumes.
Instead of using the typical 4 million pounds, they are experimenting with pumping as much as 8 million pounds of sand into a well, adding around $600,000 to the cost of an oil well while potentially doubling its output, according to Matt Conlan, a Wells Fargo analyst.
PacWest reports that demand was so high last year that prices hit an average of $75 per metric ton.