US demand for well stimulation materials is projected to increase more than 10 percent annually to nearly $12 billion in 2016.  Growth will be sustained by continued advances in hydraulic fracturing technology designed to increase the productivity of both new and existing wells.  Ongoing growth in horizontal drilling activity and development of shale resources will boost demand for proppants and the fluids used to deliver them into formation fractures.  In the early portion of the forecast period, use in oil well drilling will provide most of the impetus for growth, as oil prices are high by historical standards and natural gas prices are not.  However, shale gas development activity was strong in 2009, 2010, and 2011, despite low prices.  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.  

Through the forecast period, shale gas producers will continue to embrace innovations such as multiple-well drilling pad systems and advanced hydraulic fracturing materials in order to improve drilling efficiencies and increase per-well output, all of which will benefit well stimulation material demand.

Well stimulation technologies have had a commercial presence for more than 60 years, but for much of that time these techniques were used fairly selectively.  A number of factors have combined to transform well stimulation from a niche technology used on a minority of wells drilled in the US to one of the most common oilfield activities.  Technological advances have improved well stimulation techniques to the point that their use -- and cost -- is nearly always justified by increased well productivity.  Going forward, gains for well stimulation materials will remain strong, despite some deceleration in growth.  A decade or two ago, most wells drilled in the US were not fractured.  That is no longer the case.  Moreover, much of the recent growth in demand for well stimulation materials has been attributable to the emergence of horizontal drilling and multistage fracturing.  Although it is expected that the number of stages per fracturing job will continue to grow, it is anticipated that this growth will be slower than the pace seen in the past several years.  The expansion of hydraulic fracturing and other well stimulation techniques has not been without controversy.  Concerns about the effects of fracturing on local water supplies have led to calls for restrictions (if not outright bans) on the practice.  While hydraulic fracturing activity is generally expected to continue to grow, opposition to the practice may curb fracturing activity in certain locales. 

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.