The Ouroboros of the natural gas industry: now more natural gas needed for sand production
It’s well established that the boom of natural gas production in the US has led to increased demand for things used for production — more rigs, more trucks, more workers, more proppants.Related:
For those who don’t know, proppants are the particles used in hydraulic fracturing to hold open tiny underground fissures caused by fracturing, allowing gas or liquids to escape and be recovered. Sand, the most widely used and often cheapest proppant, saw its demand begin to skyrocket a few years ago, and now things have come full circle: more gas is needed to produce more sand in order to keep producing more gas and oil.
And also for those who didn’t know, an Ouroboros is a symbol of a snake or dragon eating its own tail, often used to represent cyclicality. And the relationship between proppants and Ouroboros will become clear in a moment.
According to an early January report from Bentek Energy, a unit of Platts, WE Energies, a primary utility provider in Wisconsin, is considering building a new $150 million pipeline in the western part of the state in part because of more gas demand for industrial silica (aka frack sand) production. Wisconsin, Illinois, Minnesota and Michigan are among the top producing states for sand in the US....MORE
What the Frack? U.S. Silica Up 24% since Feb. 1 IPO (SLCA)
Commodities: "Midwest Sees a Sand Rush "
