Texas frac sand boom puts truckers in high demand

Published: Friday, 10 November 2017

As frac sand demand more than doubles, trucking capacity in Texas is being squeezed to the limits.

A huge boost in demand for frac sand for use in oilfields in West Texas is putting pressure on local trucking capacity, with drivers in short supply.

"If you released all the convicts in Texas prisons you wouldn’t have enough drivers," Joel Schneyer, director of minerals consultancy Headwaters, told Industrial Minerals. "I’m not aware of a way around the problem."

Frac sand usage has rebounded strongly in 2017 and is set to grow further next year, largely due to an increase in oilfield activity.

As of November 3, there were 380 active oil rigs in the Permian oil basin in West Texas, according to oilfield services company Baker Hughes.

This is up from just 132 rigs in April 2016, reflecting both a more stable oil price and increased confidence that fracking projects can be made profitable even when oil dips below $50 per barrel. The front-month West Texas Intermediate oil price stands around $57 per bbl.

But sand demand is also being driven by a shift in fracking philosophy, with oil companies increasingly focusing on "touching more rock," meaning getting as much sand down the hole as possible.

Horizontal wells are getting longer, with slickwater technology allowing proppants to be pumped further underground. The amount of proppant per foot of drilled well has also been rapidly increasing.

The US Energy Information Service sees 2016 frac sand demand at just 37 million short tons while most of the industry expects 2017 consumption at more than 80 million tons.

With millions of new tonnages to be delivered, the pressure on the trucking industry is mounting.

"Definitely there is a squeeze starting to happen as these Texas mines start up," Chris Tucker, director of business development at Resource Logistics, said. "As this happens, we’re seeing limitations on driver availability."

Resource Logistics handles sand logistics and delivery of frac sand, along with commodity broking services, but does not have its own truck fleet.

The shortage of truckers is a recurring theme that was brought up by several attendees at Industrial Mineral’s Frac Sand Conference in Denver in September.

The president of one major frac sand producer painted a gloomy picture of truck availability, noting that the rebounding chemical sector along the Gulf Coast, as well as the reconstruction work in Houston after Hurricane Harvey, would draw drivers away from the remote West Texas oilfields.

But there is room to streamline operations, with frackers increasingly sourcing sand supply from local mines rather than rail depots, Tucker suggested.

"You’ll have more efficient use of routes, as you pull from the nearest mine," he said. "Instead of pulling from different rail terminals you’ll be pulling all of that production from one mine."

And Headwaters' Schneyer points out that a shift toward boxed sand systems could help reduce bottlenecks, allowing sand to be loaded over a broader area. This would reduce the queues at rail depots, which has been a bane for the sector.

"One of the advantages of these infield boxes is that in effect you can have fewer drivers but they're always working," he noted. "There are fewer drivers required because peak is lower."

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