Raymond James Energy Stat of the Week
by J. Marshall Adkins
Energy Stat: Logistic Challenges and the North American Sand Rush
September 2, 2014
Over the past decade, the energy industry has seen a shale revolution driven by hydraulic fracturing, or fracking-a technique where a slurry of water, proppant, and a small quantity of various chemicals are pumped into wells. The increasing amount of overall activity (particularly horizontal activity) has led to an approximate 30-fold increase in sand consumption over the past decade, and a doubling of sand demand over the past three years! While recent growth has been steep, we expect future sand demand growth to continue at a breakneck pace on the back of increasing proppant intensity. However, this ever-increasing sand demand has seen one primary concern: a strain on the logistics front in moving high quality sand geographically concentrated in the Northern Midwest States to oil and gas plays scattered throughout the country. Today's Stat of the Week is a summarization of a recent report done in collaboration with our transportation teams, North American Sand Rush, and will discuss the solid demand outlook along with the potential infrastructure challenges.
This is a summary of a much more detailed commentary. Please contact your financial advisor for the full report.
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