"Sand Is The New Gold"?

Tyler Durden's picture

Thanks to the growing use of fracking, or extracting oil and natural gas from shale formations, shares of U.S. companies which supply sand to energy producers are surging, and as Bloomberg reports, it does not look set to stop anytime soon. “Sand is the new gold,” says Ivaylo Ivanov, founder of Ivanhoff Capital, as Ole Slorer, a New York-based analyst at Morgan Stanley, expects demand for fracking sand in 2016 will be 96 percent higher than last year’s level. Nope, no bubble here...



As Bloomberg adds,

Emerge Energy, a Southlake, Texas-based partnership that made its initial public offering at $17 a share, changed hands for more than $140 yesterday. Hi-Crush, based in Houston, and U.S. Silica, based in Frederick, Maryland, more than tripled during the past 15 months.




Demand for fracking sand in 2016 will be 96 percent higher than last year’s level, Ole Slorer, a New York-based analyst at Morgan Stanley, wrote two days ago in a report. The sand helps prop open fractures in shale, which eases the flow of oil and gas. He expects shortages for years, with supplies in 2016 trailing demand by 10 percent.


Slorer raised his 12-month price estimate for U.S. Silica by 36 percent, to $80, and wrote that the stock may reach $95. U.S. Silica traded yesterday at a record $71.29 and closed at $70.72, up 4 percent. Emerge Energy, whose main business is fuel processing and distribution, rose 2.6 percent. Hi-Crush added 3.2 percent.

Source: Bloomberg

*  *  *

Nope, no bubble here at all...

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blu's picture

How long before there is an ETF for sand. Oh how about dirt. Maybe another for dust bunnies under the fridge.

I refuse to believe it. I just refuse. I can't stand it anymore.

Stackers's picture

It takes a special sand that has to be "mined". Only a few places to extract it. Wisconsin has the biggest deposits.

Jethro's picture

That's right.  Construction grade sand actually isn't all that common.  The gradation isn't quite the same as common river sand.  You can process it, but it costs money.

OldPhart's picture

We've got mountains of it.  Forwarded article to Chief Peddler.

0b1knob's picture

But...But....   Fracking doesn't make any economic sense!   And all the oil companies that do it will collapse soon!

Everybody on Zerohedge says so.  And have said so for years now....

GooseShtepping Moron's picture

Fracking doesn't make any economic sense apart from ZIRP, which is why it was not done on a vast scale prior to that. It is no coincidence (as the Marxists say) that the peak in conventional oil production shortly preceded the financial crisis, which preceded ZIRP, which preceded "frack the shit out of every square inch of North America." I can pull up to the link to the chart that shows American oil majors being cash-flow negative since 2012, if you really want to see it. They can't amortize their production costs with a real income stream, so they finance them through the interest rate Ponzi. The normalization of interest rates will do to the fracking industry what Asian blast furnaces did to Pittsburgh steel.

hedgeless_horseman's picture



Fracking doesn't make any economic sense!   And all the oil companies that do it will collapse soon!


Everybody on Zerohedge says so.  And have said so for years now....

...well, not everybody.




Wed, 11/17/2010 - 13:48 | 734632

Hey man, I am peak oil aware.  Check my history on this blog.  Nevertheless, you do know that producers in Eagle Ford are using horizontal drilling and fracking technology to produce oil, not gas?  They are having success all the way up to Dallas county.  I know this only buys a few months of global demand, but Kunstlers statement re shale requiring huge investment is false.  This I do know, and with this knowledge has come some excellent returns.

McMolotov's picture

Wisconsin: Come smell the dairy air.

studfinder's picture

Some deposits (central WI area) the sand that comes out of the ground is almost perfect...very little cleaning involved.  Other areas might have sand that needs to be cleaned more (washing/drying).   Its best to have a rail line near.  Last winter was very hard on the industry here...rail doesn't like subzero temps, neither do workers.   The problem i see is rail lines are fighting for freight, coal (some power plants here are complaining they might run out of coal this winter if they don't get supply in here now), sand and of course oil (the stuff that goes boom).

Good industry.  Good pay.  You work as much as your body can handle.  Plants can go 7 days a week/24hr a day. 

Kirk2NCC1701's picture

Given: "Sand is the New Gold"


[1] Sand = New Gold

[2] Sand + Heat = Glass

[3] Desert = Sea of Sand

[4] Nukes = Sea of Heat

Req'd:  Solve the above Equations for making the Saudis the Kings of Gold (Hint: need Sea of Glass)

thatthingcanfly's picture

The desired sand grade depends on the depth of the well. And the E&Ps use it all, depending on what and where they're drilling. Regarding sand grade deposits: in the northern states, the coarser grades like 20/40 are prevalent; while here in Arkansas (I work for a competitor for U.S. Silica), we make more 40/70 and 100 mesh, with some 30/50 as a by-product. 

I can confirm that the business is booming. The fracking isn't going away any time in the next 5 years (or more). My company is investing in expanding our capacity. Too bad we're not public; I'd be buying company stock hand over fist. No sarcasm at all here.

boattrash's picture

Thatthingcanfly Thanks for the informative post. Maybe you can elaborate on this thought...Today I was discussing former sandblasting (silica) jobs we (our family) have done,  yet did not realize it is considered such a hazardous substance, that nearly all of the locals have stopped diong it, and it's practically unavailable for purchase.

If that's true nationwide, the country should be completely FLUSH with sand, and glad to have a replacement market. Is it just another make-shift bubble? How bad are production Regs? (Ark. Also)

thatthingcanfly's picture

The hazards to which you refer are most certainly references to silicosis; and are most certainly overrated. Silicosis can be avoided by design engineering and PPE - both of which are used by all serious users and producers of silica sand. The operational hazards are well known, easily mitigated, and not a serious impediment to their usage.

The regulations are provided by MSHA. The silica sand producer I work for meets and greatly exceeds the MSHA standards. I do not believe we're unique in that regard.

boattrash's picture

That's my take as well. Good answer. Have a great Labor Day & enjoy these Ozarks.

PS 25 years ago, I blasted w/supplied air (air conditioned) hood. You didn't want to come out of it on a summer day.

prmths2's picture

Silicosis isn't overrated in the context of sandblasting. The high velocity impact of sand against a hard surface fractures the sand grains and produces small, very sharp particles. I once spent a few days sandblasting the grain storage bins of a brewery that was under construction. In the darkness the impact of the sand against the concrete wall produced a hemispherical region of blue light with a radius of 1-2 inches. The light was due to the energy released by the fracture of the sand particles. It was strange watching that blue light sweeping back and forth for hours on end. I had a hood and air supply, but  looking back, I wonder about the people working on the ground floor, where all of the spent sand and dust was being deposited. This was in the '70s and my awareness of silicosis was practically nil.

thatthingcanfly's picture

Forty years ago, silicosis knowledge wasn't quite what it is today. Design engineering (read: air filtration baghouses) and PPE (respirators) have rendered silicosis a thing of the past. Today, it's said that if you work at a sand mine, you'll inhale more silica dust driving down a gravel road with the windows down than you will at work.

Obadiah's picture

Hey there thatthingcanfly  I tried to contact you thru chat.  I would like to discuss this business with you.  My familys been in the gravel biz in the past and now I m thinking I need to explore this idea more in depth.

reach out to me szutavern at yahoo  dotcom



FreeMktFisherMN's picture

Don't forget the triple leveraged inverse and bullish ETFs. USAND and DSAND

TalkToLind's picture

You'll know sand's time has arrived when its value plunges 2 - 3% every night in pre-market.

Yancey Ward's picture

Its symbol will be POUND.

Stoploss's picture

Gonna have to be PACK.  Four letter limitation.

End result is the same anyway.

garypaul's picture

That's it. I'm putting all my money into Sandgold Resources. How can I go wrong?  lol

buzzsaw99's picture

In Philadelphia it's worth fifty bucks. [/pawn shop owner]

Jethro's picture

One of the very first engineering projects I had was to design a rail spur for a frac sand company.  The paid in full, up front, and never constructed it.  The perfect project. 

stant's picture

What did Milton Friedman say about the gov and sand?

jon dough's picture

Not sure what Uncle Milty said but I say the Gov should go pound it up their ass.

stant's picture

If the gov was incharge of the Sahara desert in 5 yrs there would be no sand

FreeMktFisherMN's picture

Too bad Friedman was an apologist for the monetary politburo. There is a huge gulf between the Austrians and the so-called 'free market' Chicago School. Austrian ownage!

hotrod's picture

How come there was never a shortage in Gold,  Seems like the demand was always met.  Oh  GLD

I guess with Sand you actually got to have the Physical.

ozzzo's picture

Time for JP Morgan and Goldman to start building sand warehouses. Or maybe they can use the "recently" vacated gold vaults...

SpanishGoop's picture

Well there will never be a shortage of sand.


SpanishGoop's picture

SNDUSD, paper sand...


edifice's picture

Paper beats Rock. (sand is just small rocks)

Bendromeda Strain's picture

Sand is the new Gold...

Well alrighty then, he's in luck because my cat is selling.

(don't mind the chunks)


lasvegaspersona's picture

We still make stuff?

...even the fact that we make dirt surprises me...

Yancey Ward's picture

How long before Robert Redford and Matt Damon make a movie about the disappearing beaches in Florida and Hawaii, and the broken souls that it causes?

thatthingcanfly's picture

... with George C. Scott shouting, "We cannot afford a sand gap!"

10mm's picture

I always knew that fuckin Jersey sand was Gold lol.

esum's picture

AS HOWARD HUGHES PREDICTED .......  without a bra tis sag.....LSMFT .... LOOSE STRAPS MEAN FLOPPY TITS (redd fox)

any ZH readers remember LIUCKY  STRIKE  .... ???


he planned for the eventual collapse of kalifornication into the pacific ocean

and vegas as waterfront prop....  he lived in the old SANDS.. RIP and thanks for San Simeon


BeansBulletsBandaids's picture

There's about half a dozen new sand mines near the small town in Texas where I live. The little town is booming now, but the locals sure don't like the mines. Or the influx of new folks.
We just moved there and the first question I get is, "you work at the sand mine?"

hmmmm's picture

New high-purity silica play apt to run imo RRS.V http://sectornewswire.com/release082914rrs.htm "With ~35.3 million shares outstanding (~55.2M fully diluted), RRS.V has a tight share structure, and is apt to rise on good news. The Company appears undervalued with a market cap under $4 million; it is well capitalized to execute on near-to-mid-term objectives (with recent (August 26, 2014) closing of ~$2 million financing), and clearly possesses large inherent value in its diversified portfolio which justifies a market cap several times the current."

oddjob's picture

Adjusted for share consolidations that stock has gone from $190 to 9 cents.


Rootin' for Putin's picture

They need more frackins sand?   Fracking more wells or fracking the same wells more?

bilbert's picture

Now is a good time to take Sand profits, and short Sand vigorously.


1.  You can't eat sand

2.  Sand costs less than $5 an ounce to bring it out of the ground.

You're welcome.


TalkToLind's picture

You're hired!  Please report to CNBC's HR offices next Tuesday, you will be placed on air straightaway.

DarthVaderMentor's picture

Is it Ivanhoff Capital or more like IVANHOE CAPITAL? I smell a Robin Hood somewhere.

TalkToLind's picture

<-- Fiat paper

<-- Sand paper

Just wondering which is more absorbent for when the SHTF.

bid the soldiers shoot's picture



S4F  (sand for fracking)

Fracking gas doesn't need any help.  There's more gas around than at the Guermantes' annual Beanfest.

Fracking oil, of course, is a very expensive proposition and railroad cars full of sand aren't going to make the EROEI of shale oil any more palatable.

According to Tyler "the sand helps prop open fractures in shale, which eases the flow of oil and gas.

Conceivably a producer can extract more shale oil with this method, but won't he lose a lot of the oil that gets absorbed into the sand?

No doubt, Goldman Sachs and Smith Barney would love to sell you some of their sand stock at top dollar that they bought for pennies before they started the rumors.

Without those rumors and all that talk about the collapse of every computer on January 1, 2000, the NASDAQ never would have made it to 5000 and I wouldn't have recouped all the money I lost since 1965.