Frac sand producers are seeing less demand for Wisconsin sand used to drill for natural gas. Low prices are being blamed but industry experts expect them to bounce back as natural gas continues to replace coal as a fuel of choice.
Natural gas prices have been falling since 2008 according to the U.S. Energy Information Administration. That has slowed drilling in places like North Dakota, Texas and Pennsylvania. Baker-Hughes, a company that tracks drilling developments around the world estimates there are 192 fewer gas drilling operations than last year.
Eau Claire attorney John Behling, who represents the frac sand industry, says that means less need for Wisconsin sand, “First there is quite a bit more sand becoming available on the market than there was two or three years ago and number two with the deflated prices of natural gas it’s not in as much of a demand right now.”
There are different grain sizes used for different types of drilling, smaller grains are used to get at natural gas while the larger ones are used to extract oil. Rich Budinger is the president of the Wisconsin Industrial Sand Association, he says frac sand mines in Wisconsin produce many different sizes for their customers.
Even if there is a lull in demand for one type he says it’s not a problem, “I don’t see it affecting our industry that much because these mines are also fairly diversified in their gradation. If they’re not supplying natural gas they’re supplying petroleum.”
Budinger and the Energy Information Administration expect natural gas prices to rise in the future as more industries move away from coal and cheaper easy to reach deposits of natural gas are exhausted. He says that means Wisconsin frac sand will be a player in the domestic energy industry for years to come.