Global Hydraulic Fracturing Market Overview, 2024-29

Market Dynamic

Market Drivers • Rising global energy demand: As the global population grows and economies continue to develop, the demand for energy is expected to rise steadily in the coming years. Hydraulic fracturing plays a crucial role in meeting this demand by unlocking vast reserves of unconventional oil and gas that were previously inaccessible. This increased supply of hydrocarbons contributes to energy security in many countries and provides a cost-effective alternative to traditional oil and gas sources. • Depletion of conventional oil and gas reserves: Many mature oil and gas basins around the world are facing declining production from conventional reserves. Hydraulic fracturing offers a solution to extract remaining resources from these basins and extend their productive life. Additionally, it allows for the development of unconventional resources in new areas, replenishing the global oil and gas resource base and ensuring a more stable energy supply. • Economic benefits associated with hydraulic fracturing: The development of unconventional oil and gas resources through hydraulic fracturing can create significant economic benefits for producing countries. These benefits include increased government revenue through taxes and royalties, job creation in the oil and gas sector, and a boost to the overall economy. The economic potential of hydraulic fracturing is a major driver for governments in many countries, particularly those seeking to reduce dependence on energy imports and bolster domestic energy production. Market Challenges • Regulatory landscape and public opposition: Concerns regarding the environmental impact of hydraulic fracturing, particularly water usage and potential for induced seismic activity, have led to stricter regulations and public opposition in some regions. The industry needs to work collaboratively with regulators and communities to develop robust environmental regulations, implement best practices, and ensure transparent communication to address public concerns. • Water management and sourcing: Hydraulic fracturing requires significant volumes of water, which can be a scarce resource in some regions. Developing and implementing water management strategies that minimize water usage, prioritize recycling and reuse, and explore alternative water sources like produced water or brackish water is crucial for the long-term sustainability of the industry. • Volatility of oil and gas prices: The global hydraulic fracturing market is directly linked to the fortunes of the oil and gas sector. Periods of low oil and gas prices can lead to a significant decline in drilling activity and a corresponding decrease in demand for hydraulic fracturing services. This volatility can create uncertainty for service companies and impact their investment decisions. The industry needs to be adaptable and prepared to navigate these price fluctuations to ensure long-term sustainability. Market Trends • Increasing role of automation and digitalization: The global hydraulic fracturing market is witnessing a growing adoption of automation and digital technologies. This includes the use of automated fracturing equipment, real-time data monitoring and analysis during fracturing operations, and the integration of digital tools for well completion optimization. Automation can improve safety by reducing worker exposure to risks, while digitalization allows for better decision-making based on real-time data insights. This trend towards a more data-driven and automated approach to hydraulic fracturing is likely to continue in the coming years. • Emergence of unconventional resource development in new geographic regions: While North America has been the traditional leader in hydraulic fracturing for unconventional oil and gas, other regions are starting to explore this technology's potential. Countries in Latin America, like Argentina and Bolivia, are actively pursuing shale gas development through hydraulic fracturing. Similarly, China is increasingly looking towards its vast shale oil resources to bolster domestic energy production and reduce dependence on imports. This geographic diversification of hydraulic fracturing activity presents new growth opportunities for the market. • Increasing focus on environmental stewardship and social responsibility: The hydraulic fracturing industry has faced criticism regarding its environmental impact, particularly water usage and potential for groundwater contamination. In response, there's a growing trend towards "green" fracturing technologies that aim to reduce water consumption, minimize the use of harmful chemicals, and ensure proper wastewater management. Additionally, the industry is placing greater emphasis on social responsibility by engaging with local communities, addressing their concerns, and promoting transparency in operations. Addressing these environmental and social considerations is crucial for the social license to operate and the long-term viability of hydraulic fracturing in a global context.

Key Development

April 2024: ProPetro Holding Corp. (NYSE: PUMP) has secured a three-year hydraulic fracturing services agreement with ExxonMobil for the Permian Basin. This landmark deal marks a significant step towards electric fracturing in the region, with ProPetro deploying two FORCE electric-powered fracturing fleets alongside wireline and pumpdown services in the first half of 2024. The agreement includes the option for a third electric fleet to be deployed in early 2025.