With the boom in production of proppant, or frac-sand, used in the hydraulic fracturing process for oil and natural gas extraction, railroads are having a hard time keeping up with the demand for transporting this essential ingredient. Prices of frac-sand continue to rise even as the proppant industry sees double-digit annual increases in production.
Hydraulic fracturing has been a boon to domestic energy production in the United States. The price index for frac-sand reached its highest level since 2012 in October, according to a Moody’s Investors Service report cited by Oil & Energy Insider. Moody’s said proppant production could be slowed if the price of oil stays below $80 a barrel, but other groups are forecasting continued robust growth in North America.
Oil & Energy predicted annual double-digit increases for the foreseeable future because of increased demand abroad and fracking processes that are using an extra shot of frac-sand to increase oil and gas extraction. PacWest Consulting Partners expects 23-percent annual growth through at least 2016.
As a consumer, transporter or producer of proppant, are you equipped to meet your frac-sand storage needs?
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