Mike Shuster, left, and Lisa Zaccaglini, both of Sharon Springs, N.Y., hold signs during a rally against hydraulic fracturing for natural gas in the Marcellus Shale region of the state, at the Capitol in Albany, N.Y., on Monday, April 11, 2011. (AP Photo/Mike Groll) (Associated Press)
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This is one of Chesapeake Energy's hydraulic fracturing operations over the Eagle Ford shale formation near Carrizo Springs, Texas. Hydraulic fracturing, or fracking, is a practice used to coax natural gas and petroleum from rock formations like shale. The head of the well is the red, vertical extension on the bottom right corner. JOHN DAVENPORT/jdavenport@express-news.net (SAN ANTONIO EXPRESS-NEWS)
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Dust permeates the air at a Chesapeake Energy Co. fracking operation at a well site near Carrizo Springs, Texas Thursday May 5, 2011. The site is over the Eagle Ford shale formation where oil and gas is being extracted in the area. Fracking is also known as hydraulic fracturing. JOHN DAVENPORT/jdavenport@express-news.net (SAN ANTONIO EXPRESS-NEWS)
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An oil worker walks pass the manifold (right) and frac pumps (left) at a Chesapeake Energy hydraulic fracturing operation near Carrizo Springs, Texas Thursday May 5, 2011. Hydraulic fracturing is a method of removing oil and gas from rock formations such as the Eagle Ford shale formation in south central Texas. JOHN DAVENPORT/jdavenport@express-news.net (SAN ANTONIO EXPRESS-NEWS)
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A natural gas well operated by Northeast Natural Energy on Saturday, Aug. 6, 2011. The well is the subject of a dispute over a drilling ban recently enacted by the city of Morgantown, which is directly across the Monongahela River from the well. (AP Photo/David Smith) (Associated Press)
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Helge Lund (left), CEO of Norwegian energy company Statoil, speaks with Statoil Joint Venture Manager Cesar Alvarez (facing away) and Talisman Energy Frac Specialist Nabila Larsen (right) at a Talisman Energy fracking site near Cotulla, Texas. Statoil is working with Talisman energy to develop oil and gas ventures in the Eagle Ford shale formation in south central Texas. (Wednesday September 7, 2011) JOHN DAVENPORT/SAN ANTONIO EXPRESS-NEWS (jdavenport@express-news.net) (SAN ANTONIO EXPRESS-NEWS)
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An oilfield employee works at a Talisman Energy fracking site near Cotulla, Texas. Talisman Energy is working with Norwegian energy company Statoil to extract oil and gas from the Eagle Ford shale formation in south central Texas. (Wednesday September 7, 2011) JOHN DAVENPORT/SAN ANTONIO EXPRESS-NEWS/jdavenport@express-news.net (SAN ANTONIO EXPRESS-NEWS)
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Sandstone is washed and tumbled and put through a series of screens and sieves Wednesday August 31, 2011 until it is broken down into sand particles at the Frac Tech Services sand mining operation near Brady, Texas. Sand from the mine is being used nationwide by drilling companies using the hydraulic fracturing process. JOHN DAVENPORT/jdavenport@express-news.net (SAN ANTONIO EXPRESS-NEWS)
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Protestors scale a shale gas rig at Banks, near Southport, England bringing a halt to work at the Cuadrilla Resources site Wednesday Nov. 2 , 2011. Cuadrilla Resources, which is drilling for gas in northwestern England, said Wednesday that independent experts concluded that the tremors were due to an unusual combination of geology and operations, and were unlikely to happen again. The company said local geology would limit any future seismic events to around magnitude 3 on the Richter scale. The tremor on April 1 measured 2.3 on the Richter scale. Local campaigners have mounted a "Frack Off" campaign to oppose the drilling technique that cracks open rock layers to free natural gas. (AP Photo/Peter Byrne/PA) UNITED KINGDOM OUT NO SALES NO ARCHIVE (Associated Press)
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In western New York state near the Pennsylvania border, many signs can be found expressing support for both sides in the hydraulic fracturing debate. (August 2011)
BILL MONTGOMERY : CHRONICLE (staff)
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FILE - In this April 22, 2008 file photo, a natural gas well pad sits in front of the Roan Plateau near Rifle, Co. The director of the Colorado Oil and Gas Conservation Commission, David Neslin, said Monday, Dec. 5, 2011, that requiring drilling companies to publicly disclose what chemicals they use in hydraulic fracturing is only one tool for protecting public health and the environment. The comment was made during a hearing regarding a proposal to require public disclosures of fracking fluids that aren't trade secrets. More than 100 people packed the hearing. (AP Photo/David Zalubowski, File) (Associated Press)
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FILE- In this photograph taken April 15, 2009, an unidentified worker steps through the maze of hoses being used at a remote fracking site being run by Halliburton for natural-gas producer Williams in Rulison, Colo. The U.S. Environmental Protection Agency announced Thursday Dec. 8, 2011 in Wyoming, for the first time that fracking - a controversial method of improving the productivity of oil and gas wells - may be to blame for causing groundwater pollution. (AP Photo/David Zalubowski, File) (Associated Press)
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In this July 27, 2011 photo, Range Resources workers stand near the rig that drills into the shale at a well site in Washington, Pa. The company is one of many drilling and "fracking" in the area to release natural gas. The three different diameters of pipe at bottom are the casing tubings that each go inside the other to line the well. Experts say Marcellus Shale natural gas production is expected to keep rising in 2012, yet landowners may find that signing lease deals isn't as easy as in years past. (AP Photo/Keith Srakocic) (Associated Press)
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In this July 27, 2011 photo, Range Resources site manager Don Robinson stands near the well head by the drill that goes into the shale at a well site in Washington, Pa. The company is one of many drilling and "fracking" in the area to release natural gas. Experts say Marcellus Shale natural gas production is expected to keep rising in 2012, yet landowners may find that signing lease deals isn't as easy as in years past. (AP Photo/Keith Srakocic) (Associated Press)
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NEW YORK, NY - JANUARY 11: Opponents of hydraulic fracturing in New York state attend a news conference and rally against hydraulic fracturing, also known as fracking, on January 11, 2012 in New York City. The event, which was held on the steps of City Hall, called for an end to the controversial gas drilling method as environmental groups increasingly warn about contamination of the state's aquifers that could poison its drinking water. (Photo by Spencer Platt/Getty Images) (Getty Images)
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NEW YORK, NY - JANUARY 11: New York Senator Tony Avella speaks at a news conference and rally against hydraulic fracturing, also known as fracking, in New York State on January 11, 2012 in New York City. The event, which was held on the steps of City Hall, called for an end to the controversial gas drilling method as environmental groups increasingly warn about contamination of the state's aquifers that could poison its drinking water. (Photo by Spencer Platt/Getty Images) (Getty Images)
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In this photo made on Wednesday, July 27, 2011, a worker walks through a maze of pies connecting storage tanks and pumps in the hydraulic fracturing process in the Marcellus Shale layer to release natural gas was underway at a Range Resources site in Claysville, Pa. (AP Photo/Keith Srakocic) (Associated Press)
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In this photo made on Wednesday, July 27, 2011, a worker shovels the powder used to make a mixture with water used in the hydraulic fracturing process in the Marcellus Shale layer to release natural gas b at a Range Resources site where the process was underway in Claysville, Pa. (AP Photo/Keith Srakocic) (Associated Press)
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Daniel Morrissey of Latham leads anti-fracking demonstrators organized by Occupy Albany protest in front of the DEC building in Albany,NY Thursday, Jan.12, 2012. ( Michael P. Farrell/Times Union) (Albany Times Union)
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Abram Loeb of Afton dressed in a decontamination suit joins anti-fracking demonstrators organized by Occupy Albany protest in front of the DEC building in Albany,NY Thursday, Jan.12, 2012. ( Michael P. Farrell/Times Union) (Albany Times Union)
The worldwide market for hydraulic fracturing will grow 19 percent this year to a record $37 billion, one-third the pace of expansion in 2011 after tumbling natural-gas prices discouraged exploration for the fuel, said Spears & Associates Inc.
In North America, which accounted for 87 percent of the fracking market last year, spending on the technique used to extract oil and gas from shale will top $30 billion in 2012, said Richard Spears, vice president of the Tulsa, Oklahoma-based firm that advises about 400 oil producers, hedge funds, equipment providers and manufacturers.
Demand for fracking services this year will grow slower than 2011’s 63 percent rate because of declining interest in searching for gas, which as recently as three years ago dominated the market, Spears said today during a conference call sponsored by Credit Suisse USA Holdings Inc.
“Natural-gas drilling has not grown, it’s shrunk,” Spears said. “All the growth is on the oil side.”
Fracking is the practice of pumping millions of gallons of high-pressure water, chemicals and sand underground to crack fissures in the rock so oil and gas can flow.
Energy producers including Marathon Oil Corp. (MRO), Continental Resources Inc (CLR). and Exxon Mobil Corp. (XOM) have expanded use of fracking to penetrate geologic formations from North Dakota to Pennsylvania that were overlooked for decades because they were too difficult to crack.
Horizontal Oil Wells
Halliburton Co., the biggest provider of fracking in North America with 18 percent of capacity, rose 3.6 percent to $36.25 at the close in New York, the biggest increase since Dec. 20.
Shale formations contributed to a boom in U.S. oil output that reached a 9-year high in October, the most recent period for which Energy Department data was available.
In the U.S., horizontal drilling, the precursor to most fracking activity, is expected to rise to 18,600 new wells this year, breaking 2011’s record of 16,100, said Spears, a former Halliburton Co. (HAL) fracking engineer.
About 73 percent of this year’s new horizontal wells in the U.S. will be aimed at extracting oil, up from 12 percent in 2009, Spears said. The number of horizontal wells targeting gas will fall to 5,000 this year in the U.S., down from 6,000 three years ago, he said.
Four Companies
Four companies — Halliburton, Schlumberger Ltd. (SLB), Baker Hughes Inc. (BHI)’s BJ Services unit and FTS International Inc., formerly known as Frac Tech Services LLC — provided more than half the North American fracking services last year, Spears said. Halliburton was at the top of the group with almost one- fifth of capacity, followed by Schlumberger with 13 percent, BJ Services with 12 percent and FTS with 11 percent.
Fracking capacity in North America probably will expand 28 percent this year to about 18 million horsepower after growing 42 percent in 2011, Spears said. Capacity has more than tripled in the past five years, thanks in part to companies that previously didn’t exist or didn’t offer the service to oilfield customers, he said.
The mid-continent region that includes Oklahoma dominated the North American fracking market last year with $5 billion in sales, Spears said. Canada was second-largest with $4 billion in orders, followed by south Texas and the East Texas/Northern Louisiana region, which each accounted for $3.5 billion in fracking work.
The Rocky Mountains region, which includes the Bakken shale that underlies North Dakota and Montana, generated $3 billion in fracking sales, Spears said. The eastern U.S., which includes the Marcellus and Utica shale formations, amounted to $2 billion in fracking work last year.
