As frac sand demand more than doubles, trucking capacity in
Texas in the United States is being squeezed to its
limits.
The increased frac sand demand 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
[still] 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."
Over 2017, frac sand usage has rebounded strongly 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 was up by 248 from 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 prices
dip below $50 per barrel. The front-month West Texas
Intermediate oil price currently 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," which means 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 reported 2016 frac sand
demand at just 37 million short tonnes while most of the
industry expects 2017 consumption to be more than 80 million
tonnes.
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A frac sand truck is filled at source.
Petr Brož, Via Wikimedia |
Truck squeeze
With millions of new tonnages to be delivered, the pressure
on the trucking industry is mounting.
"There [definitely] 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.
Speaking to Industrial Minerals at the conference, the
president of one major frac sand producer painted a gloomy
picture of truck availability.
Truckers are already in high demand on the Gulf Coast of
Texas, due to the rebounding chemical sector, he noted, while
the reconstruction work currently taking place in Houston in
the wake of Hurricane Harvey is likely to further increase
demand.
With ample job supply in the more densely populated coastal
regions, there is also little incentive for truckers to move
to the West Texas oilfield in search of jobs, he said.
Shift to local mines
There is room, however, to streamline operations, with
fracking operators increasingly sourcing sand supply from local
mines rather than rail depots, Tucker said.
Along with a trend toward bigger sand volumes, the industry
is increasingly less concerned with quality.
This has driven a move away from the large, high-strength
sand found in Wisconsin and Minnesota, US, toward more
affordable sand mined near the fracking sites in
Texas.
This means more sand being collected nearby, rather than
arriving and needing to be unloaded in rail depots across the
regions.
"You’ll have a more efficient use of routes
[when] you pull from the nearest mine," Tucker said. "Instead
of pulling from different rail terminals, you’ll
be pulling all of that production from one mine."
A shift toward boxed sand systems could help reduce
bottlenecks, allowing sand to be loaded over a broader area,
Headwaters’ Schneyer said. This would reduce the
queues at rail depots, a common complaint in 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 said. "There are fewer drivers required
because peak is lower."
Boxed sand systems use preloaded containers of sand, which
are loaded onto trucks and carried to the wellhead, where they
are pumped into the formation in a closed system.
Such systems are increasingly popular because, in addition to
their logistic benefits, they help to reduce both particulate
air pollution and noise pollution, which is useful for
fracking operations close to inhabited areas.