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Proppant Demand in North America to Reach $8.2 Billion by 2019

Demand for proppants in North America is forecast to increase 7.6 percent annually through 2019 to 162 billion lb., valued at $8.2 billion. With oil and gas prices expected to remain subdued in the near term, demand for proppants will decelerate from the extremely rapid growth posted between 2004 and 2014 and future gains will result primarily from increases in proppant loadings in unconventional well completions. These and other trends are presented in Proppants in North America, a new study from The Freedonia Group Inc., a Cleveland-based industry market research firm.

In addition to growth in unconventional drilling and completion activity, dramatic increases in the volume of proppants used per well have also supported rising proppant demand and a changing product mix. According to analyst Jason Carnovale, “As oil and gas companies have gained experience in optimizing hydraulic fracturing design, they have increasingly shifted away from premium resin coated sand and ceramic proppants toward using much larger volumes of raw frac sand.”

While a period of high and relatively stable oil prices between 2011 and 2014 led to growth in well completion and hydraulic fracturing activity in the United States and Canada, prices have fallen substantially since and are not expected to recover fully until after 2019.

As a result, drilling activity in liquids rich unconventional plays is expected to be constrained through 2019, with export opportunities for natural gas providing some incentive to drilling in gas bearing formations. Improvements in drilling efficiency and falling well costs will allow for modest increases nonetheless. In large part, well productivity has increased as a direct result of the use of greater volumes of proppants in fracturing operations.

A number of specific unconventional resource plays are expected to see significant future growth in well completions, creating above average opportunities for proppants.

Among the largest proppant markets in the United States, Colorado, North Dakota and Oklahoma are expected to hold the best short-term prospects for volume demand growth, while Texas and Pennsylvania are forecast to grow more slowly.

In large part, this will result from the relative maturity of the Eagle Ford shale in Texas and the Marcellus shale in Pennsylvania when compared to the less developed unconventional plays in the former states. Canada is expected to see very strong growth, as the country holds a large volume of tight oil and shale gas resources yet lags the United States in their development, having focused investment more heavily on oil sands resources to date.


        % Annual Growth
Item 2009 2014 2019 2009-2014 2014-2019
Proppant Demand 19430 112200 161900 42.0 7.6
Raw Frac Sand 17430 104000 151000 42.9 7.7
Resin Coated Sand 1020 3800 5200 30.1 6.5
Ceramic 980 4400 5700 35.0 5.3
Source: 2015 by The Freedonia Group Inc.