The Rising Influence of Rising Affluence

[DewDiligence]

WSJ feature on (fracking) sand:

https://www.wsj.com/articles/the-cheap-resource-that-worries-oil-shale-drillers-1488817549

Most Silicon Valley companies would kill for the sorts of gains made by sellers of plain old silicon [heh].

Even after a recent selloff, leading producers of sand used by oil and gas producers—companies like Hi-Crush Partners and U.S. Silica Holdings—are up between 170% and 380% over the past year. Their gain is turning into oil producers’ pain, though, and could affect the global energy market.

Used after shale formations have been fracked, sand was a hot commodity during the boom that ended in 2014. Now that activity is again on the upswing, sand producers have rebounded from crisis to expansion mode. Some analysts see demand for sand equaling or exceeding the prior peak even with drilling activity far lower.

Drillers have discovered that more sand produces more oil or gas. Praveen Narra, an equity analyst at Raymond James, estimates that the amount used per foot of well depth last year was 40% to 50% greater than in 2014.