Well Stimulation Demand to Reach $7.35 Billion in 2014

US demand for oil and gas well stimulation materials is projected to increase 14 percent per year to $7.35 billion in 2014, buoyed by renewed efforts to reduce dependence on foreign energy sources, particularly from unfriendly or unstable countries.  Well stimulation is necessary in order to maximize the output from aging US oil and gas fields, and to optimize production in unconventional settings such as tight gas, shale and coal bed methane.  These and other trends, including market share and product segmentation, are presented in Well Stimulation Materials, a new study from The Freedonia Group, Inc., a Cleveland-based industry market research firm.

Overall, gains for proppants and other stimulation materials will result from the recovery of US oil and gas production activity, which plummeted in 2009 after a precipitous decline in prices.  With prices so low, there was little incentive to increase production, and oilfield activity shriveled.  The US active rig count, which had topped 2,000 in mid-2008, dropped to less than 900 in 2009 before beginning to rebound later in the year.

In order to optimize production in US oil and gas fields -- both in mature production zones and in newer, unconventional producing regions -- well stimulation techniques such as hydraulic fracturing and acidizing have become more widely used, and will continue to expand their market presence as drilling activity continues to grow.  Perhaps the greatest level of enthusiasm for increasing domestic production lies with shale gas formations.  These formations contain immense amounts of gas, but have been underdeveloped due to technological infeasibility.  Many of the technical challenges have been overcome, allowing for fuller exploitation of these promising resources.  Even so, well stimulation itself has become the target of considerable scrutiny about the potential for environmental damage.  Legislation proposed in the US Congress aims to remove hydraulic fracturing’s exemption from the Safe Drinking Water Act’s stipulations regarding underground chemical injections near groundwater supplies.  The bill would also require companies to disclose the chemicals used in fracturing fluids.

The Freedonia Group is a leading international business research company, founded in 1985, that publishes more than 100 industry research studies annually. This industry analysis provides an unbiased outlook and a reliable assessment of an industry and includes product segmentation and demand forecasts, industry trends, demand history, threats and opportunities, competitive strategies, market share determinations and company profiles.