Posted on 11/25/2014 5:39:45 PM PST by bananaman22
When it takes up to four million pounds of sand to frack a single well, it’s no wonder that demand is outpacing supply and frack sand producers are becoming the biggest behind-the-scenes beneficiaries of the American oil and gas boom.
Demand is exploding for “frac sand”--a durable, high-purity quartz sand used to help produce petroleum fluids and prop up man-made fractures in shale rock formations through which oil and gas flows—turning this segment into the top driver of value in the shale revolution.
“One of the major players in Eagle Ford is saying they’re short 6 million tons of 100 mesh alone in 2014 and they don’t know where to get it. And that’s just one player,” Rasool Mohammad, President and CEO of Select Sands Corporation told Oilprice.com.
Frack sand exponentially increases the return on investment for a well, and oil and gas companies are expected to use some 95 billion pounds of frack sand this year, up nearly 30% from 2013 and up 50% from forecasts made just last year.
Pushing demand up is the trend for wider, shorter fracs, which require twice as much sand. The practice of downspacing—or decreasing the space between wells—means a dramatic increase in the amount of frac sand used. The industry has gone from drilling four wells per square mile to up to 16 using shorter, wider fracs. In the process, they have found that the more tightly spaced wells do not reduce production from surrounding wells.
(Excerpt) Read more at oilprice.com ...
Wow, 4 million pounds, that’s a lot! But not as much as 64 million ounces. Now THAT’s a lot sand, prolly more than in all the deserts on Erf!!
I suppose the sand mixes with the oil for extraction and separation? Is it recoverable for reuse? Or does it stay in the fracked cavities?
The sand is mixed with gel’ed (thickened water) on the surface and pumped down into the horizontal length, which is lined with perforated pipe. Then the pressure is raised enormously and stage by stage, the rock is fractured. The rounded sand embeds itself in the fractures so that when the pressure is removed, the 2 miles of rock pressing down doesn’t reclose the fractures.
Oil then can flow. About 1000 barrels per day on day 1, down to 600 by the end of month 1 and maybe 400 bpd end of year 1. The gel’ed water also comes back up, as does very salty natural water that is in the rock down there. It comes up with the very thin oil that is in shale. Both are collected in onsite tanks and hauled by truck. The water goes to a disposal well that it is pumped down into. The oil goes to the train railhead.
In the Bakken, because of the salt, more water is frequently hauled to the well site and pumped down into the well, to dissolve salt encrustation. That water comes back up and has to be hauled to the disposal well.
It’s all VERY expensive. Wells cost $10 million to drill and frack, and then mineral royalties take 16ish% of the revenue, and North Dakota taxes another 5%. The $10 million is borrowed money at about 6% with 5 year repayment reqmt(often).
The train transport means about $15/barrel is deducted from the refinery price they are willing to pay. What’s left is south of $60/barrel and with all those costs, the industry will fail. If oil gets much cheaper, probably by the end of this winter.
Only a govt subsidy could save it.
My wife told me that I need to quit swearing so much. From now on, when somebody cuts me off in traffic I’ll say,
“Hey Buddy! Pack some fracking sand in your drill hole!”
She can’t get mad at me for saying that.
Thanks for the very clear info. I live in the middle of Cline Shale activity and -—hard to believe-—have never really understood the technology of fracturing. The sand trucks are running day and night here and will likely continue in order to hoard sand on the assumption oil prices will go up. I also have mineral rights for 13 acres in the Eagle Shale formation which supposedly has the possibility of drilling in the next few years or so (if like you say, things don’t go south).
The intent is for the sand to get stuck in the fissures of the shale and keep it propped open so that the oil can flow. If the rock is fractured and then collapses on itself, there are no gaps for the oil (or gas) to flow through. The frack sand is needed not only for the shales of Bakken in North Dakota and the Eagle Ford of south Texas, but also the Permian in west Texas and the Marcellus gas wells in Pennsylvania.
My wife’s family partnership has signed 4 Eagle Ford leases in the last six months, two of them with enough royalties to put the family name on the well. (Wells around here are typically named after the two largest royalty owners.)
Gives “go pound sand” a completely different meaning.
If OPEC goes broke they can always sell their sand to the fracking companies.
There probably aren't many who lament an oil price decline but what I know is when oil flows in my neck of the woods, I can buy groceries.
And I like groceries.
Probably worth noting that if that industry is destroyed, and make no mistake this is a VERY real possibility, it may be permanent.
Yes, the liquid (many don’t call it oil) is still down there, but when the death of the industry occurs, particularly in NoDak, the small operators will just leave — and leave all their stuff behind at wellsites. NoDak will have to clean it all up. The surety bond is only $20K. That won’t pay for nearly anything. With NoDak having gotten burned, they will hugely elevate the costs presented to anyone who wants to start up again (after an oil price increase). Also, because it’s all borrowed money and those lender will get stiffed by default, they won’t lend again.
The price destroying shale may be $74 WTI (which is about $58 for the NoDak discount). It may take WTI $150 or $200 to have companies able to pay all the restart obstacle costs and get producing again. In other words, industry destruction may effectively remove that oil from accessibility forever — sort of like natural gas on Titan exists but will probably never be accessed.
The alternative would be . . . stop pretending capitalism matters and have the Fed insure any and all loans. Essentially nationalize the industry just to get the oil out.
There’s about 8,000,000,000 tons (rough calculation) 20 miles east of Fallon off Highway 50 in NV, and it’s probably just about perfect... ;-)
No. No. and no.
Not just any sand will do. Has to be right particle size and shape. Raw sand is usually filtered.
Most of which is a protected zone for a butterfly.
Aolian sands are frequently tight in grain size distribution and that pile is probably 99.9% quartzite.
It was tongue in cheek though, it’s an OHV recreation area and a pretty damn cool structure to boot ;-)
Hey, you gotta break some eggs ya know... ;-)
,,, the small operators will just leave — and leave all their stuff behind at wellsites.
After completion, pretty much all that’s left is the wellhead and Christmas Tree. And even those get reclaimed if the well is shut down. They’re too expensive to just leave there.
What is all the stuff that you think they will leave?
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