Record oil and gas prices to drive US demand. Demand for oil and gas well stimulation materials will surpass $3 billion in 2012, buoyed by historically high oil and gas prices and increased efforts to optimize energy production as part of an effort to reduce dependence on foreign energy sources, particularly from unfriendly or unstable countries. Well stimulation services are necessary in order to  maximize the output from the aging US oil and gas fields. In addition, the increasing prevalence of deeper wells in harsher environments -- such as in deep offshore waters -- will  increase the demand forhigher performance  engineered proppants and other value-added materials. The exploitation of coal beds and tight sands for the production of natural gas will intensify the need for hydraulic fracturing systems that are less damaging to low permeability formations. Finally, oil and gas prices  are expected to remain historically high in the coming years, which will encourage new drilling and efforts to maximize the output from marginally producing wells, for which stimulation efforts are generally not justified in low energy price environments.

Alternative uses to present greater gas opportunities

Nitrogen and carbon dioxide are the dominant gases in well stimulation. Nitrogen is used in fracturing operations  in more sensitive formations, such as coal beds and seams, where unconventional techniques are used more frequently.  Carbon dioxide is finding increasing use as the primary constituent of fracturing fluids. Liquid carbon dioxide can carry  proppant without the aid of gelling agents or additives.

Proppants of all types will continue to lead

Proppants are expected to remain the largest product category. Inexpensive sand proppants will continue to be replaced with more expensive engineered  proppants to meet the strength requirements for deeper wells, although sand proppants will continue to dominate the market in volume terms due to their low  cost and performance in less stressful environments. Finally, new lighter weight proppants currently in development will add to the average price of proppants and further increase the amount of proppants used relative to transport fluids.

Changes in product mix boost value gains in gelling agents, other base fluid materials

Growth in gelling agent market value will be driven by the increased use of higher priced gelling agents such as micropolymer and polymer-free gelling agents,  which are particularly well-suited to tight sands formations and other low permeability geophysical structures. These  formations, which are highly susceptible to damage from gelled polymer residues, are expected to become an increasingly important source of natural gas in th US during the forecast period.

Study coverage

This new industry study, Well Stimulation Materials, is available for    $4600. It presents historical demand data (1997, 2002 and 2007) plus forecasts for 2012 and 2017 by product type and by  region of the US. The study also assesses market environment factors, evaluates company market share data and profiles selected competitors in the US industry.

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