The demand for proppants in unconventional gas and tight oil activities is expected to increase more than 11 percent per year to $6.1 billion in 2017, with volume reaching 57.1 billion pounds. Volume growth will result from continued high levels of oilfield activity and ongoing increases in the average number of fracturing stages per well. Operators continue to experiment with different types and amounts of proppants to optimize well output and minimize stimulation expenditures. As a result, coated sand will gain market share because it offers a balance between performance and cost in many applications. However, raw sand’s volume will remain dominant, and all proppants will register strong overall advances. Unconventional production from tight oil and shale plays is expected to make up a large part of the overall growth for proppants in the U.S. during the next decade. The fastest growth is expected in the Permian Basin and Eagle Ford Shale formations in Texas, the Marcellus Shale in the Eastern region, and the Utica Shale in Ohio. Advances in the Bakken formation in North Dakota, currently the largest market for proppants in the U.S., will remain strong.
In the longer term, growth will accelerate in the predominantly dry gas plays, such as the Haynesville and Woodford Shales, as natural gas prices rise to a level that will make activity in these plays more profitable. Future growth will depend greatly on continued operations in these established plays and the development of newer plays—such as the Wolfcamp in Texas, the Tuscaloosa Marine Shale in Louisiana and Mississippi, and the Niobrara and Mancos formations in the Rocky Mountains. The greatest long-term potential may lie with the Monterey Shale in California, which is believed to hold enormous oil reserves. However, the full scale development of this play may be a decade away, if state regulators allow it at all. The slowest growth in proppant demand is expected in the mature plays, notably the Barnett Shale in Texas and the Antrim in Michigan, where drilling activity will decline and the amount of proppant per well is static. Both sand and ceramic proppants can be resin coated to impart a number of additional performance properties. Sand will continue to dominate volume sales, with faster increases in resin-coated products. Growth in ceramic proppant demand will continue to be favorable although considerably slower than during most of the past decade because of competition from lower cost alternatives. Demand for other proppant types—mainly lightweight proppants made from walnut shells and crosslinked thermoplastics—in shale gas and tight oil formations will remain small, accounting for less than one percent of the overall proppant volume in 2017.