The greatest rise will be in the U.S. and Canada.
by Michael Richardson, The Freedonia Group
February 27, 2014

World demand for well stimulation materials is projected to increase more than 12 percent per year to more than 65 million metric tons in 2017, valued at $23 billion. Hydraulic fracturing and acidizing have been used for decades to boost production, especially in aging or damaged oil and gas wells. Recently, the combination of multistage hydraulic fracturing with horizontal drilling technologies has enabled the development of resources previously considered technically or economically unfeasible. Development in unconventional fields has been a driving force behind stellar growth in well stimulation materials demand during the past decade, mainly in the North American market. Increased activity in these unconventional production areas has boosted the sales of proppants and the fluids used to deliver them into downhole fractures.

World well stimulation materials demand

Recent growth in the U.S. has been in oil-producing and liquid-rich formations. Demand in these regions is driven by high oil prices. The depths and challenging geologies require greater amounts of proppants and chemicals for completion. Although oil and natural gas are produced in many countries, the U.S., Canada, China and Russia account for a large majority of well stimulation materials demand. U.S. demand for oil and gas well stimulation materials is projected to increase 11 percent per year to 48.2 million metric tons in 2017, valued at $15 billion. The U.S. is the world’s largest well stimulation market because of the efforts to maximize the output from aging U.S. oil and gas fields and to optimize production in unconventional plays. The Barnett Shale in central Texas and the Haynesville Shale in eastern Texas and western Louisiana were among the areas that helped create this demand, sustained by development activity in the Eagle Ford Shale in Texas, the Bakken Formation in North Dakota, and the Niobrara Shale in the Rocky Mountain region.

U.S. well stimulation materials demand

Despite this favorable outlook, well stimulation has become the target of considerable scrutiny because of the fear of environmental damage. Legislation proposed in the U.S. Congress aims to remove hydraulic fracturing’s exemption from the Safe Drinking Water Act’s stipulations regarding underground chemical injections near groundwater supplies. The bill would also require companies to fully disclose the chemicals used in fracturing fluids. Steps in that direction have occurred at the state level, but federal regulations are forthcoming.