HOUSTON — Oil companies have more than tripled spending on chemicals since 2007, with continued growth expected as modern drilling techniques require more of the materials.
In 2012, oil field spending on chemicals reached $9.5 billion, up from $2.9 billion in 2007, according to a study from the market research firm Freedonia Group.
While oil companies will continue to spend more on chemicals in the coming years, the pace of growth is expected to slow to about 2.1 percent a year until 2017, the company said. By 2017, oil field chemical spending will reach $10.5 billion, the firm said.
The slowed growth is mainly a result of lower prices for guar gum, a gooey, plant-based substance that was in short supply in 2012, causing huge price spikes that affected the balance sheets of Halliburton and other large companies.
“Helping to offset the industry’s reliance on this commodity will be the rising use of slickwater fracturing as well as efforts to find alternative polymers that can match guar’s performance,” the Freedonia Group said in a press release on the data.
Oil companies use guar gum as part of the hydraulic fracturing process, when a mixture of water, sand and chemicals is used to fracture underground rocks and free up oil and gas.
As a result of guar gum shortages, oil field companies have increasingly turned to alternatives, reducing demand for the chemical.
Demand for other chemicals, however, is expected to continue a steady rise, the company said.
“Both increased production and produced water will necessitate higher levels of use of chemicals such as biocides, demulsifiers, and corrosion and scale inhibitors,” according to the firm.