As our firm has discussed in previous Business Hours, the booming natural gas industry is creating a surging demand for water. Drilling a single horizontal well can require upwards of 5 million gallons of water. This massive water use, which will only increase with the continued development of the industry, is driving rapid innovation with respect to the delivery, recycling, and disposal of water used for fracking.
However, the impact of the burgeoning shale industry is not limited to water. The Wall Street Journal published an excellent article earlier this week describing the shale-driven skyrocketing demand for sand. Sand is a typical “proppant” used in the hydraulic fracturing process. The simple, unscientific explanation is this: highly pressurized liquids crack the shale, and the proppants contained in those liquids serve to hold the cracks open and allow for continued oil and gas production. A single horizontal well can require more than 4 million pounds of sand.
Like water, sand has plenty of industrial users outside of the shale industry who are vying for a limited supply. While sand producers will certainly attempt to meet this new demand, the constrained sand supply will likely spur innovation elsewhere. Alternative ceramic proppants are already widely used in the industry but typically come at a higher price. If sand producers struggle to meet new demand, we will likely see continued development in the ceramic proppant arena.