Lead Angle: Targeting markets high and low

With oil prices around half of their high level of about $100 a barrel from 2011 to 2014, the oil and gas industry is in the doldrums. One exception to this slump, however, appears to be the hydraulic fracturing, or fracking, market.

“The oil and gas industry as a whole is not rock ’n’ rolling, but the frack side is,” said Al Zaitoon, president of Industrial Sales Group LLC, Arlington, Texas, an independent rep company. “If you’re involved in that, you’re doing pretty good.”

A forecast analysis by Seattle-based MarketsandMarkets Inc., a publisher of market research reports, estimates the global fracking market will grow to $72.6 billion by 2019, from $41.5 billion in 2014, at a compound annual growth rate of more than 11.8 percent. “The relentless depletion of onshore and shallow-water fields has compelled oil companies to focus on deep-water and unconventional onshore areas where various hydraulic fracturing services are required in order to produce the field,” the company reports.

But as Zaitoon commented, “Offshore exploration is superexpensive.”

The vast majority of fracking occurs in North America, the forecast states. But that doesn’t limit the geographic reach of manufacturers that serve the market. Zaitoon said about 50 countries have major shale deposits. This list includes China, and it’s no surprise that country is expected to exponentially grow its fracking activities.

One reason the market is “fit for the $40s,” meaning that fracking companies are able to profit even when the price of oil falls below $50 a barrel, is the boost in productivity that the latest cutting tools provide, according to Zaitoon. This increase in productivity enables manufacturers to reduce the costs fracking companies pay for parts. “They’ve lowered their expenses,” he said. “We have products that can reduce cycle times by 50 percent.”

Those products include thread mills for generating the large buttress threads in pipes that can handle the high level of pressure the massive fracking pumps exert to create fractures in rock formations that stimulate the flow of oil or natural gas.

In addition to tunneling down, wealth can be earned by heading into the heavens. Although it’s still an emerging market for manufacturers of metal parts, the space tourism industry appears to be gaining ground. A reader or two might recall that I initially wrote about the private spaceship sector in this space a little more than 14 years ago, after Scaled Composites LLC, Mojave, Calif., unveiled the first nongovernmental manned spacecraft.

While fewer than 600 people have gone above the Kármán line—the point about 100km (62 miles) above Earth that marks the beginning of space—the rise of private spaceflight companies means that the final frontier may soon be within reach of many more, according to a July 21 NBC News article (tinyurl.com/yc3f89yf). And then humans are off to Mars.