How a Little Indian Bean Impacts US Fracking

[mota bhai 2,675]

A little bean called guar, which in Hindi means “cow food,” has the world’s largest oil and gas producers fretting over profit margins.

The reason is simple. In gum form, guar is the thickening agent used to push fluids sideways in the hydraulic fracturing or “fracking” process.

Currently the commodity is in high demand and short supply — making it expensive for frackers, but life-alteringly lucrative for once dirt-poor Indian farmers who produce about 85 percent of the world’s guar.

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In 2011, guar emerged as India’s largest agricultural export to the United States, with sales of $915 million, according to a recent USDA Foreign Agricultural Service report.

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U.S. energy players are already scrambling to either spur American guar growth or to create an alternative, cheaper substance.

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There are currently about 30,000 acres of guar crops in the U.S., according to Trostle. Almost all of these acres are found in Texas, where the hot, dry climate accommodates the desert plant. The problem is, Texas isn’t yielding near enough guar to meet the needs of the U.S. fracking industry.

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This September, Halliburton announced test results for ‘PermStim’ fluid, which it claims is a viable alternative to guar gum. The product has some competition. Schlumberger, for example, is developing ‘HiWay' — which also promises to reduce reliance on guar gum.

Neither product, however, is developed enough to reverse the industry's reliance on Indian guar gum.

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“Other areas seeing an increase in fracking projects include China, Russia, Canada and Argentina,” added Miskimins.

In particular, China and Russia are thought to have even larger shale resources than the U.S. An increase in their demand is expected to support high guar prices.

http://www.cnbc.com/id/49263899

[I AM NOT THAT GUY 5,715]

Very interesting. Seems to me a lot of money could be made here, or lost. A true gambler would not let this play get by without a sinkable wager.

[mota bhai 2,675]

Very interesting. Seems to me a lot of money could be made here, or lost. A true gambler would not let this play get by without a sinkable wager.

It strikes me that there are plenty of parts of the American SW that are similar, climatically, to the Indian state of Rajasthan.