North Dakota Oil Patch Amongst Prime Markets for Wisconsin Sand | Texas Information

By ERIC LINDQUIST, Eau Claire Chief-Telegram

EAU CLAIRE, Wis. (AP) — After greater than a decade of alternating boom-and-bust cycles, the regional frac sand trade seems to be stabilizing — no less than for now.

That’s the assesssment of UW-Eau Claire geology professor Kent Syverson, who additionally serves as a marketing consultant for the frac sand trade.

“It’s adjusted now to a special base degree. Now it’s form of in equilibrium I’d say,” Syverson stated.

Whereas he doesn’t count on the trade ever to return to the way in which it was from 2011 to 2014 when new mines and processing vegetation had been popping up like dandelions throughout west-central Wisconsin to benefit from the area’s silica sand reserves, Syverson stated the surviving services appear to have discovered dependable markets for his or her sand, together with some that shifted to producing for different industries resembling glassmaking.

Political Cartoons

Wisconsin mines wanted to seek out alternate locations to ship their sand to exchange the enormous market that principally evaporated when power firms constructed numerous sand mines nearer to oilfields in Texas, the Eau Claire Chief-Telegram reported.

The manufacturing enlargement pushed down costs and enabled oil drillers to get native sand for lower than the price of transport it from Wisconsin, forcing a number of fracking sand firms to pause or shut down Wisconsin operations lately. Syverson estimated that fewer than half of the frac sand services constructed within the area — primarily the lowest-cost producers — stay viable.

Nonetheless, the freefall has stopped and the marketplace for the northern white sand produced in Wisconsin is strengthening as soon as once more, stated Brandon Savisky, senior analysis analyst at IHS Markit.

Annual manufacturing capability for northern white sand has elevated from about 12 million tons in early 2020 to 21 million tons now, an increase of roughly 75%, Savisky stated, noting that Wisconsin stays the nation’s No. 2 shipper of sand behind Texas.

“Demand for sand has positively picked up all throughout America,” Savisky stated, “and northern white sand was in all probability extra secure than native sand all through final yr.”

Whereas some Wisconsin sand is being shipped by rail to Texas as soon as once more in response to trucker shortages which can be a part of nationwide provide chain points associated to the COVID-19 pandemic, a lot of it’s being delivered to oilfields in western Canada, North Dakota and Appalachia that haven’t developed native sand provides, he stated.

“The panorama has gone from chaotic nervousness as we got here out of 2020 to changing into extra cautiously optimistic as mines started to restart and exercise recovered,” Savisky stated. “Now just about all sand mines are working close to capability.”

Supply Power Companies, which owns and operates Wisconsin frac sand mining services in Weyerhaeuser, Blair and Preston, has been the main provider of fracking sand to the Western Canadian Sedementary Basin for near a decade, stated SES spokeswoman Meghan Somers.

Whereas the Calgary, Canada-based firm additionally provides different basins within the U.S., the Canadian market will proceed to be a spotlight, she added.

Somers agreed that the change to native sand, mixed with low commodity costs, has made it particularly tough for Wisconsin sand trade individuals.

The overwhelming majority of the mines producing northern white sand are in Wisconsin, with the majority of them situated inside 80 miles of Eau Claire.

The sand is utilized in hydraulic fracturing — the drilling approach generally referred to as fracking that entails injecting a mix of sand, water and chemical substances deep into underground wells to power oil and pure fuel to the floor. The sand is used to carry open fissures within the rock.

Northern white sand, prized by fracking firms for its coarseness, sturdiness and the spherical form of its grains, continues to be thought-about to be of upper high quality than the sand produced in Texas, however producers have developed strategies to make the decrease high quality sand work properly sufficient to fulfill their wants.

Most significantly to producers, the Texas sand is cheaper as a result of it doesn’t must be shipped greater than 1,000 miles by rail from Wisconsin to the oil and fuel deposits within the Permian Basin in west Texas and southeast New Mexico.

The opportunity of extra Texas trucking disruptions resulting in a surge in orders for northern white sand within the Permian Basin is a wild card that Syverson stated he’s watching, as a result of it might spark one other short-term growth within the demand for Wisconsin sand.

Copyright 2022 The Related Press. All rights reserved. This materials is probably not revealed, broadcast, rewritten or redistributed.

Related posts

Power Shares, Rising Markets Attraction to this Cash Supervisor


ShowingTime Knowledge Reveals Seattle and Denver are the Nation’s Most Lively Markets, whereas solely the South Area noticed an Uptick in Showings Per Itemizing Yr-Over-Yr


Ecuador sees a return to capital markets in an orderly method: economic system minister


Leave a Comment