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Researched by Industrial Info Resources (Sugar Land, Texas)--U.S apparent consumption of industrial sand and gravel fell by 10% in 2016, while domestic production dropped nearly 11%, largely as a result of a decline in the market for hydraulic-fracturing sand (frac sand), which is used in the extraction of shale-bound oil and gas, according to the U.S. Geological Survey (USGS). Even so, the U.S. continued to lead the world in both production and consumption. Industrial Info is tracking more than $847 million in active U.S. sand and gravel projects.
The United States produced 91.7 million metric tons of sand and gravel in 2016, compared with 103 million tons in 2015. Apparent consumption was 89.4 million tons last year.
"Production of hydraulic-fracturing sand to support extraction of natural gas and petroleum from shale deposits continued to decline in 2016, but remained at historically high levels," according to a USGS report. "New and more efficient hydraulic-fracturing techniques, which require more silica sand use per well (mostly for secondary recovery at mature wells) could stabilize demand for hydraulic-fracturing sand."
Indeed, U.S. Silica Holdings Incorporated (NYSE:SLCA) (Frederick, Maryland) plans to build a $225 million frac sand mine and plant this year in West Texas to serve the Permian Basin. According to a June 12 announcement by the company, the operation will produce about 4 million tons per year and is part of Silica Holdings' plan to produce 8 million to 10 million tons of new capacity to meet frac sand demand. The company said construction would begin immediately, with initial production expected late in the fourth quarter of this year. For more information, see Industrial Info's project report.
U.S. Silica Chief Executive Officer Bryan Shinn said in a press release that the company's customers "told us clearly that they want more local sand supply in the Permian to support future well completions. Their willingness to negotiate long-term supply agreements for this new capacity and to potentially commit their own capital to the project demonstrates the confidence they have in U.S. Silica and the tightness of the frac sand market now and in the future."
U.S. Silica isn't the only company with plans to get in on the Texas Permian action. High-Crush Proppants LLC (Houston, Texas) is expected to complete a $48 million frac sand mine and processing plant later this year in Kermit, Texas. The mine is expected to produce three million tons per year of frac sand over an 18-year mine life. For more information, see Industrial Info's project report.
Up north, South Dakota Proppants plans to build a $66 million silica sand mine and plant in the Black Hills National Forest, 14 miles from Hill City, South Dakota. Construction of the 1 million-ton-per-year operation would begin in early 2018, with completion in the first quarter of 2019. For more information, see Industrial Info's project report.
The USGS reported that industrial sand and gravel producers were concerned with safety and health regulations and environmental restrictions, especially those dealing with crystalline silica exposure. In 2016, the Occupational Safety and Health Administration (OSHA) finalized new regulations to further restrict exposure to crystalline silica at mine sites and other industries that use it. Phased implementation of the new regulations were scheduled to take effect from 2017 through 2021. OSHA has delayed enforcement of the respirable crystalline silica standard for construction until September 23, 2017, to conduct additional outreach and provide educational materials and guidance for employers.
Local shortages of industrial sand and gravel were expected to continue to increase owing to local zoning regulations and land development alternatives, including ongoing development and permitting of operations producing hydraulic-fracturing sand, according to the USGS. Natural gas and petroleum operations that use hydraulic fracturing may also undergo increased scrutiny, the agency said, adding: "These situations are expected to cause future sand and gravel operations to be located farther from high-population centers."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.
The United States produced 91.7 million metric tons of sand and gravel in 2016, compared with 103 million tons in 2015. Apparent consumption was 89.4 million tons last year.
"Production of hydraulic-fracturing sand to support extraction of natural gas and petroleum from shale deposits continued to decline in 2016, but remained at historically high levels," according to a USGS report. "New and more efficient hydraulic-fracturing techniques, which require more silica sand use per well (mostly for secondary recovery at mature wells) could stabilize demand for hydraulic-fracturing sand."
Indeed, U.S. Silica Holdings Incorporated (NYSE:SLCA) (Frederick, Maryland) plans to build a $225 million frac sand mine and plant this year in West Texas to serve the Permian Basin. According to a June 12 announcement by the company, the operation will produce about 4 million tons per year and is part of Silica Holdings' plan to produce 8 million to 10 million tons of new capacity to meet frac sand demand. The company said construction would begin immediately, with initial production expected late in the fourth quarter of this year. For more information, see Industrial Info's project report.
U.S. Silica Chief Executive Officer Bryan Shinn said in a press release that the company's customers "told us clearly that they want more local sand supply in the Permian to support future well completions. Their willingness to negotiate long-term supply agreements for this new capacity and to potentially commit their own capital to the project demonstrates the confidence they have in U.S. Silica and the tightness of the frac sand market now and in the future."
U.S. Silica isn't the only company with plans to get in on the Texas Permian action. High-Crush Proppants LLC (Houston, Texas) is expected to complete a $48 million frac sand mine and processing plant later this year in Kermit, Texas. The mine is expected to produce three million tons per year of frac sand over an 18-year mine life. For more information, see Industrial Info's project report.
Up north, South Dakota Proppants plans to build a $66 million silica sand mine and plant in the Black Hills National Forest, 14 miles from Hill City, South Dakota. Construction of the 1 million-ton-per-year operation would begin in early 2018, with completion in the first quarter of 2019. For more information, see Industrial Info's project report.
The USGS reported that industrial sand and gravel producers were concerned with safety and health regulations and environmental restrictions, especially those dealing with crystalline silica exposure. In 2016, the Occupational Safety and Health Administration (OSHA) finalized new regulations to further restrict exposure to crystalline silica at mine sites and other industries that use it. Phased implementation of the new regulations were scheduled to take effect from 2017 through 2021. OSHA has delayed enforcement of the respirable crystalline silica standard for construction until September 23, 2017, to conduct additional outreach and provide educational materials and guidance for employers.
Local shortages of industrial sand and gravel were expected to continue to increase owing to local zoning regulations and land development alternatives, including ongoing development and permitting of operations producing hydraulic-fracturing sand, according to the USGS. Natural gas and petroleum operations that use hydraulic fracturing may also undergo increased scrutiny, the agency said, adding: "These situations are expected to cause future sand and gravel operations to be located farther from high-population centers."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.
