Except for the oil and natural gas themselves, one of the oilfield’s hottest commodities these days is the sand used to fracture or “frac” the bedrock formations and loosen them up for extraction.
It takes a lot of sand and the question is, will there be enough for next year’s production and beyond?
The Permian Basin Petroleum Association consulted Charley McIntyre, director of business development and support services at Cudd Energy Services, who cited “a significant shift in the supply.
“The traditional suppliers of sand to the Permian Basin, primarily a combination of Brady in Central Texas and Northern White Sand from Wisconsin, have been largely replaced by local and regional sand mines within the Basin,” McIntyre said. “Current estimates suggest an overwhelming transition with 96 percent of the sand now being sourced locally or regionally and marking a stark decline in outside Basin procurement to a mere 4 percent.”
McIntyre said the region’s externally acquired sand is still primarily the Northern White because of its superior qualities of sphericity, strength, crush resistance and purity.
“Prevailing wisdom seems to indicate that 2024’s sand supply in the Permian is adequate if not slightly oversupplied at the moment with the current drilling and completions activity plans,” he said. “There are some small fit-for-purpose projects planned to add slight incremental capacity in the Permian but not enough to exacerbate the oversupply.”
Texas Independent Producers & Royalty Owners President Ed Longanecker said Atlas Energy Solutions is the biggest Permian Basin producer with the largest sand reserves.
“The Basin is uniquely positioned with quality sand reserves that are optimal for fracking horizontal wells, particularly in the Winkler Sand Trend between the Midland and Delaware basins,” Longanecker said from Austin. “These large dune deposits meet the majority of the demand of Permian Basin operators and that supply is supplemented by smaller and thinner localized sand deposits that are logistically positioned to service area operators.
“In general the sand market appears to be in balance with adequate supply to meet demand in 2024.”
Panhandle Producers & Royalty Owners President Judy Stark of Amarillo said Permian frac sand mining continues to increase to support the surging Texas oil industry, but not with fast-rising costs.
“Wells are getting deeper and longer and consumption per well has significantly increased and it is projected to become more difficult,” Stark said. “Along with demand, the lacks of clean sand availability and service company support for hauling and delivering the sand exaggerate the issues.
“Logistics from the sand facilities to locations are far and few between and like everywhere good DOT drivers are hard to find and cost a premium when you find them. I anticipate the sand markets to improve in the Permian Basin as manufacturing or mining facilities grow production in 2024.”