The Northern frac sand industry is in a huge rut.
In western Wisconsin, 10 frac sand processing plants have closed over the past 18 months. That’s one-third of the industry’s dry sand milling capacity, said Kent Syverson, a geology professor at the University of Wisconsin-Eau Claire and a sand-industry consultant, speaking to the Star-Tribune.
Many other Wisconsin frac sand operations were operating well below capacity at the beginning of March, he added.
And all of this was before oil collapsed as the economic disruption caused by the coronavirus pandemic cratered global demand at the same time Russia and Saudi Arabia decided to flood the market with crude supply. Frac sand with water is used in the extraction of oil and natural gas.
“The situation has gotten worse,” Syverson said. “Now we have an oil-price crash, and some [oil producers] are cutting back their fracking and drilling budgets.”
Announced cuts already total billions of dollars.