How Are Oil and Gas Reserves in North America Driving Low Strength Proppants Demand?

The U.S. Energy Information Administration (EIA) estimated that the proven reserves of crude oil in the U.S. increased to 367 million barrels and the natural gas reserves in the country stood at 494.9 trillion cubic feet, in 2019. Furthermore, the proven reserves of natural gas from shale in the country surged from around 68% of the total reserves in 2018 to about 71% in 2019. Whereas, the proven crude oil reserves in Canada stands at 171.0 billion barrels. 

The presence of extensive reserves of oil and gas in North America is resulting in increased exploration and production (E&P) activities in the region. As a result of the surging E&P activities, the low strength proppants market will advance at a CAGR of 9.8% during 2020–2030. According to P&S Intelligence, the market revenue will grow from $3,713.3 million in 2019 to $5,294.8 million by 2030. Both the U.S. and Canada have been using low strength proppants in conventional and non-conventional oil and gas wells to increase the flow of gas or oil during the hydraulic fracturing process.

Currently, low strength proppants manufacturers are expanding their facilities and engaging in geographical expansion to reach out to a greater number of customers. For instance, in June 2018, Alpine Silica announced to establish two new plants in Fay, Oklahoma and Van Horn, Texas. With the construction of these new projects, the company has secured around 51 million tons of reserves for the Oklahoma initiative. Similarly, in August 2018, Black Mountain Sand LLC announced its plan to expand its presence in Western Oklahoma's Mid-Continent.

Geographically, the North American region led the low strength proppants market in the preceding years, owing to the surging number of drilled wells and the increasing focus of oil and gas companies and governments on discovering new oil and gas reserves in the region. Moreover, the abundant availability of conventional and unconventional resources also fuels the production of low strength proppants in North America. Furthermore, the region is also expected to consume low strength proppants at the highest rate in the coming years, due to the increasing E&P activities.

Thus, the rising E&P activities in North America and the surging technological advancements in crude oil recovery processes will fuel the consumption of low strength proppants in the foreseeable future.

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