Common Ingredient in Ice Cream & Oil Production Causes Concerns
By: Mycah Glover
Updated: July 5, 2012
Midland -- Can you guess what ice cream has in common with oil and gas production? It's a hard question but there's definitely an answer, and it's causing some concerns.
The answer is a substance called guar gum. It's a plant mainly grown in northern India, and it's many uses have the price of guar shooting sky high.
Ice cream is a summer staple. Look on the package and guar gum is one of the ingredients. It's used to keep ice crystals from forming in the frozen treat.
But it's another use for guar that has the price soaring sky high. Experts say guar is one of the main components in hydraulic fracturing, which uses a mix of sand, water, and chemicals to enhance oil and gas production.
With all the shale plays going on across the country, it's clearly in high demand. In fact, Halliburton says the price of some varieties of guar gum have increased more than 800 percent since January 2011.
Guar functions as as a thickening agent, keeping components like the sand evenly distributed. According to experts, a typical frac job uses 20,000 pounds of the gummy substance.
So how is the skyrocketing price of guar affecting a service company's bottom line? According to Halliburton, their second quarter margin will be down as much as 5.5 percentage points just because of rising guar prices.
For more energy news:
Twitter: MycahGlover
Facebook: Mycah Glover KMID
The answer is a substance called guar gum. It's a plant mainly grown in northern India, and it's many uses have the price of guar shooting sky high.
Ice cream is a summer staple. Look on the package and guar gum is one of the ingredients. It's used to keep ice crystals from forming in the frozen treat.
But it's another use for guar that has the price soaring sky high. Experts say guar is one of the main components in hydraulic fracturing, which uses a mix of sand, water, and chemicals to enhance oil and gas production.
With all the shale plays going on across the country, it's clearly in high demand. In fact, Halliburton says the price of some varieties of guar gum have increased more than 800 percent since January 2011.
Guar functions as as a thickening agent, keeping components like the sand evenly distributed. According to experts, a typical frac job uses 20,000 pounds of the gummy substance.
So how is the skyrocketing price of guar affecting a service company's bottom line? According to Halliburton, their second quarter margin will be down as much as 5.5 percentage points just because of rising guar prices.
For more energy news:
Twitter: MycahGlover
Facebook: Mycah Glover KMID
