IMs 2nd Frac Sands Conference
in Minneapolis at the end of September were broadly excited
about the growth in the silica (frac) sand industry, but this
optimism was tempered with concern regarding activism and
regulation, which many believe are holding back growth in the
With demand for frac sand expected
to grow threefold by 2019 owing to increased activity in
hydraulic fracturing (fracking) activity, both those involved
in the industry and protesters outside the conference stressed
the importance of evaluating the costs and benefits of
increased frac sand mining for the future.
Shale oil and gas is extracted by
fracking, which involves pumping water and minerals like frac
sand, barite (barytes) and bentonite into shale rock at high
pressure. Increased activity in fracking would mean higher
demand for these minerals.
Mark Kruminacher, principal and
senior vice president of GZA GeoEnvironmental - which provides
environmental and construction consulting services - addressed
the conference by discussing the economic benefits and the
apparent negligible costs of frac sand mining to meet
The number one concern
thats raised with any industrial sand mine, or indeed any
non-metallic mine, is that the mine will decrease property
values, he said. Thats always the number one
issue - but you cant find a study that backs this up and
thats quite simply because it doesnt
He also expressed frustration that
many anti-frac sand mining lobbies accuse mining companies of
promising the benefits and jobs created by mining, without
addressing the costs to the community or to the environment,
while failing to address economic costs of not allowing mining
to go ahead.
Among the benefits which
Kruminacher claimed are ignored by anti-mining campaigners are
the jobs created both directly and indirectly by the mining
According to a 2012 study by IHS
Global Insights, funded by the petroleum industry, Wisconsin
firms employed 20,000 people supporting the unconventional oil
and gas business, which was expected to rise to more than
33,000 by the end of 2020.
However, only around 10%, or 2,200,
of those jobs are directly tied to the fracking industry, with
the rest accounting for spinoff jobs such as at restaurants and
bars that have benefitted from increased sand-mine activity in
Moratoria on fracking have been
imposed in various states around the country including in
Minnesota, New York and Colorado.
However, while some bans on frac
sand mining have since been lifted, many remain in place as
various states study the health and environmental risks of
mining and fracking.
Houston in south eastern Minnesota
is one county that extended its moratorium on frac sand mining
in February and it could now run until 5 March 2015.
In response, several industry
bodies are now working on crystalline silica classification,
and earlier this year, OSHA proposed updated crystalline silica
safety standards aimed at reducing the risks of working in an
environment where silica particles are present.
Inhalation of respirable
crystalline silica particles can lead to the lung disease
silicosis, and OSHA recommended a new permitted exposure level
(PEL) for respirable crystalline silica as well as new
provisions for measuring how much silica workers are exposed
Not in my back yard
According to Krumincher, the
opposition and alternatives proposed by the anti-frac sand
mining campaigners boils down to one thing: NIMBYism.
Many campaigners are concerned
regarding the implications of relying on shale gas as an energy
source and one movement which is certainly more than a NIMBY
response to fracking is that of Greenpeace, which is pushing
for a shift to clean, renewable energy sources.
According to international
experts, we need to keep two-thirds of known fossil fuel in the
ground to avoid runaway climate change - the point
at which global warming becomes irreversible, the
organisation said as part of its anti-fracking campaign.
Rather than scraping the
bottom of the fossil fuels barrel and building up costly
infrastructure that will lock us into a high-carbon future for
decades to come, we need strong government investment in clean,
renewable energy, it added.
Aside from concerns regarding the
mining of frac sand, a major worry for locations considering
fracking is additional water pressure and contamination of
groundwater, which can occur through various pathways such as
surface spills, well integrity failure - such as leaks or poor
construction - the fracking process itself and natural geology
As a result, New Yorks
highest court ruled in July that towns can use zoning
ordinances to ban fracking, which enables towns to rule whether
or not to frack in different parts of the state, as well as
upholding the current state-wide moratorium on fracking.
Fracking policies have also been
debated across Europe, with the environment agency in Germany
recommending that that countrywide moratorium imposed in 2012
be maintained while its environmental risks are assessed.
The decision, which could limit the
fracking process to rare cases rather than implementing a
national policy, comes as a blow to business leaders in the
country who have lobbied to lift the moratorium on fracking all
The 2nd Frac Sand
Conference was also attended by local activists who staged a
protest outside the conference hotel.
IM spoke to
activist, Joe Kruse, who expressed his hope for an increased
dialogue and awareness of the thoughts and opinions of
activists at industry meetings.
I think there is a big
disconnect with how the communities are actually being
impacted, how they feel that fracking and frac sand mining are
affecting them, Kruse told IM.
Because we have a lot of very human and raw pain that
people are experiencing as a result of frac sand mining and
Rather than looking to ban frac
sand mining outright, Kruse said he hoped that organising such
protests would create a space for both sides to enter into a
discussion and look for a mutual solution.
The other big message we want
to get across is that we see frac sand mining as participating
in a fossil fuel thats ultimately a dead end that
doesnt have a future if we hope to sustain life on the
planet, he told IM.
We need to seek alternatives
to fracking, as fossil fuels will be used rapidly. The reality
of climate change is really dire and people are already
suffering from the impacts of it, he added.
In terms of alternatives to
fracking, Kruse suggests pooling together all resources rather
than looking to a single solution.
I think we need to implement
at a rapid rate all of the possible alternatives, I dont
think theres one alternative fuel thats going to be
the silver bullet, I think were going to have to do a
whole bunch of things at the same time, he said.
And I think whats stopping us from doing that are
folks who have influence in our government who have a lot of
money and with that money are able to sway laws.
Oilfield Minerals News Review
Potential frac sand shortage
US-based financial services company
Morgan Stanley has suggested that frac sand supply could be a
strong growth limiting factor for the rapidly expanding
We believe the industry now
sits on the verge of a prolonged frac sand supply
shortage, said Morgan Stanley in a research report. The
report follows US Silica Holdings prediction in September
of this year that demand for silica sand could triple over the
next five years.
The supply constraints are being
compounded by the trend of putting greater volumes of frac sand
in each well, which enables a higher yield of petroleum
products per site for the operator.
US-based Halliburton, the
oilfield services company, has opened a frac sand storage and
loading facility in Argentina, which has the second largest
potentially recoverable shale gas reserves in the world,
according to 2013 USGS data.
Located in La Meseta, North
Patagonia, the multi-million dollar facility is 10.46km from
the companys Neuquen operations base. It includes a
warehouse, three storage silos, and a quick, gravity-based
loading system for trucks.
This new facility
helps us solve the logistical challenges that occur when moving
to the development phase of the production cycle, said
Halliburton Argentina country manager, Fernando
Argentina has been
suggested as a possible leader for the shale gas market because
of its large reserves and low water risk supply
The UK government has said
it will continue its support of the fracking industry despite
widespread opposition from the UK public.
In a report published at
the end of September, the government said it had not changed
its stance on its Proposal for Underground Access for the
Extraction of Gas, Oil or Geothermal Energy, despite a public
consultation in which the majority of respondents opposed
fracking or the change to underground access
The change to land
guidelines propose to simplify existing regulation by offering
right of access to rock beneath properties to companies looking
to drill for shale gas and oil by fracking.
However, according to the
governments response statement, around 90% of the total
responses did not address the consultation
Baker Hughes revenue
Oilfield services provider
Baker Hughes saw its revenue increase year-on-year (y-o-y) to
$6.25bn for the third quarter of 2014, driven by demand from
both Latin and North America. Net income for the quarter also
increased to $375m in Q3, up from $341m in Q3 2014 and $353m in
the second quarter or 2014.
Increased revenue was
driven partly by Latin America owing to increased activity in
Argentina and offshore Mexico. Revenue growth in North America
was driven by an increase in service intensity in the
companys pressure pumping product line and the seasonal
rebound of its Canadian business.
However, disruptions in Libya and Iraq, the
declining Russian rouble and activity delays in the Gulf of
Mexico all negatively impacted the business.