MADISON, Wis. (AP) — Some energy producers are still willing to pay more for Wisconsin’s high-quality fracking sand despite increasing competition from Texas producers.
Mining-industry publications estimate there could be more than 20 new frack-sand mines in western Texas this year, Wisconsin Public Radio reported. The growth is happening in the Permian Basin, a major region for oil production.
Frack sand is used in process known as hydraulic fracturing to extract oil and natural gas from rock.
Texas sand is found mainly in dunes, making it easier to mine than Wisconsin sand, which tends to be locked in sandstone deposits, said Samir Nangia, an oilfield-services expert for analytics firm IHS.
“You wash it, you dry it, you put it on a truck and you send it where it needs to go,” said Nangia. “You don’t need a rail load out terminal, you don’t need to do any blasting, you don’t need to do any heavy moving, and then on top of that you only need to truck it like 50 miles to 75 miles.”
That ease of obtaining the sand in Texas drives down the price, making sand from that state attractive to oil-drilling companies, Nangia said.
“The costs are really low of producing this sand and of course they’re putting up too many mines, which basically means that they could sell that sand for as little as $30 a ton,” said Nangia.
Moving sand from Wisconsin to Texas can cost as much as $60 a ton.
Although new mines in Texas will take away some market share from their competitors in the Midwest, they aren’t likely to get more than half, Nangia said.
Many energy companies still value Wisconsin sand because of its strength, Nangia said. Companies can drill deeper and keep oil wells producing longer. Some companies are mixing Wisconsin sand with cheaper Texas sand when using hydraulic fracturing to drill in oil-rich shale deposits, he said.