Click HERE for a very detailed presentation about the economics of frac sand in the global fracking context. This is an industry presentation that is a great source of information, statistics, and context.
Here are the conclusions they arrive at:
• Drive for cheaper natural gas consumption worldwide to continue
• Assured future demand for proppants, esp. frac sand
• Enhanced by more shale gas plays and horizontal drilling
• O/G explorers looking to replicate shale gas boom worldwide
• Not all silica sands will make API spec, older deposits more likely
• SiO2%, roundness, sphericity, crush resistance very important
• But “off-spec” material will be consumed until new sources on line
• Prices still firming, but expect to level off 2012-2013 as new sources come on line – logistics continue to play major role
• Expect to see more activity from Chinese ceramic proppant suppliers
• Expect to see more vertical integration from end users
• Look out for impact on glass/foundry sand demand as producers switch or “favour” supplying frac sand market