April 24, 2017

HMM: How Rising Sand Prices Could Undermine U.S. Shale Recovery.

The techniques used to wring increasing volumes of crude oil, natural gas and natural gas liquids (NGLs) out of shale continue to evolve, and as they do, producers are facing mounting costs for securing frac sand and for disposing of produced water from the wells. These costs are squeezing producer profits, and—in an era of sustained low hydrocarbon prices—sometimes even flip production economics from favorable to unfavorable.

Historically, American business has thrived on solving logistical problems just like these. If prices are rising for sand and waste-water disposal, that’s a strong profit motive for entrepreneurs to create new efficiencies — not a mortal threat to the fracking industry.