Fracking Chemicals Market Size, Share & Trends Analysis Report By Function (Gelling Agent, Friction Reducer, Corrosion Inhibitor, Biocide, Surfactant, Scale Inhibitor, Others), By Fluid Type (Water-Based fluid, Oil-Based fluid, Foam-Based fluid) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2024-2032

Fracking Chemicals Market Size and Trends

The global fracking chemicals market size was valued at USD 45.6 billion in 2023 and is projected to reach a value of USD 49.23 billion in 2024  to USD 92.7 billion by 2032, registering a CAGR of 7.9% during the forecast period (2024-2032). The increase in Fracking Chemicals market share during the forecast period is related to the use of alternative fracking technologies, such as waterless fracking, and the usage of green chemicals, propane gel, and other technologies is expected to create substantial growth opportunities in the future.

Fracking chemicals, commonly known as fracking fluid or fracturing fluid, are a complicated combination of substances used in drilling operations to enhance the amount of hydrocarbons retrieved from the subsurface. Fracking fluid protects the well from corrosion, lubricates the extraction process, and avoids blockages and bacterial growth, among other purposes. The chemical combination frequently comprises carrier/base fluid, biocides, scale inhibitors, solvents, friction reducers, additives, corrosion inhibitors, and non-ionic surfactants, which might include various specific compounds. Depending on the dose, these substances can offer substantial health concerns. The actual composition of fracking fluids varies, and the federal government does not require companies to disclose the chemicals used in their fracking fluid. Some states, however, mandate disclosure for oversight purposes. 

Chemical additives in fracking fluids typically account for only 1% of the fluid put into a borehole, but for a single unconventional stimulation job, this can equate to 50,000 gallons of chemicals. The composition of fracking chemicals varies from industry to industry. These chemicals are added to water and sand to produce the desired mixture of fracking fluid. A considerable quantity of chemicals, around 40,000 gallons, is required in one fracturing operation.

Highlights

• Gelling agent leads the market by function.
• Water-based fluid dominates the segment by fluid type. 

Fracking Chemicals Market Growth Factors

Rising Demand for Energy 

The growing global demand for oil and natural gas energy is a significant driver of the fracking chemicals business. As countries and populations become wealthier, their energy consumption increases as they use more energy-intensive goods and services. The global GDP is projected to more than double by 2050, with much of that growth coming from non-OECD Asia, further driving energy demand. As traditional oil and gas supplies deplete, there is an increasing reliance on unconventional sources such as shale formations, tight sandstone, and coalbed methane. 

In addition, hydraulic fracturing, or fracking, is an essential technique for extracting hydrocarbons from these unconventional reservoirs. Fracking chemicals are critical to hydraulic fracturing because they increase well productivity, facilitate fluid flow, and reduce formation damage. As population development, urbanization, and industrialization drive up energy consumption, so will the demand for fracking chemicals, particularly in places with substantial shale resources like North America, China, and Argentina.

Technological Advancements in Hydraulic Fracturing Techniques

Technological improvements in hydraulic fracturing procedures fuel innovation and growth in the fracking chemicals market. Companies always spend R&D to improve fracking fluid formulas, boost healthy performance, and optimize production outcomes. Advanced fracking chemicals provide advantages such as lower water usage, greater fracture conductivity, and increased environmental compatibility. For example, developing environmentally friendly biocides, friction reducers, and corrosion inhibitors answers concerns about fracking's water contamination, environmental impact, and public health dangers. 

Furthermore, advances in nanotechnology, polymer chemistry, and surfactant design enable the creation of customized fracking chemicals that address the unique problems of various geological formations and reservoir conditions. These technological breakthroughs improve the efficiency, safety, and sustainability of hydraulic fracturing operations, accelerating the global deployment of fracking chemicals. 

Fracking Chemicals Restraining Factors

Environmental and Regulatory Concerns

Environmental and regulatory considerations substantially impact the global fracking chemicals market. Hydraulic fracturing entails injecting enormous amounts of water, sand, and chemicals into subsurface formations to liberate hydrocarbons contained in shale rock. Fracking chemicals may cause water contamination, air pollution, habitat disruption, and induced seismicity. Issues about groundwater pollution from chemical spills, leaks, and poorly suitable casings have generated public health and environmental problems, prompting regulatory scrutiny and opposition to fracking operations in some areas. The regulatory frameworks governing fracking differ widely, with some jurisdictions setting tight limits on the use, storage, and disposal of fracking chemicals to protect human health and the environment. Compliance with environmental standards, permitting procedures, and community involvement efforts complicate and increase the cost of fracking operations, limiting market development and profitability for fracking chemical suppliers. 

Volatile Oil and Gas Prices

Volatility in oil and gas prices substantially impacts the global fracking chemicals business. The profitability of hydraulic fracturing operations is closely related to oil and gas prices, as lower commodity prices can affect drilling activity and capital expenditures in the upstream oil and gas industry. When oil and gas prices are low, energy companies may cut or delay fracking projects, resulting in lower demand for fracking chemicals.

Furthermore, swings in oil and gas prices can impact the financial feasibility of unconventional oil and gas plays, including shale formations, tight sandstone, and coalbed methane, all of which rely heavily on hydraulic fracturing. Uncertainty about future energy demand, geopolitical conflicts, and market speculation contribute to oil and gas price volatility, influencing investment decisions and market dynamics in the fracking chemicals industry. Fracking chemicals suppliers may need help estimating demand, maintaining inventory levels, and optimizing production capacity in response to swings in oil and gas prices, hurting revenue growth and profitability in the global market. 

Fracking Chemicals Market Opportunity

Expansion of Unconventional Oil and Gas Exploration

Expanding unconventional oil and gas exploration and production activities presents a considerable opportunity for the worldwide fracking chemicals market. The Abu Dhabi National Oil Company (ADNOC) has been actively exploring and developing unconventional gas resources in the UAE to achieve gas self-sufficiency by 2030. ADNOC has leveraged global expertise and technologies to unlock the country's significant unconventional gas potential. As conventional oil and gas stocks decline, energy corporations seek unconventional resources, including shale formations, tight sandstone, and coalbed methane, to fulfill rising energy demands.

Moreover, hydraulic fracturing, or fracking, is a critical technology for extracting hydrocarbons from unconventional sources, increasing demand for fracking chemicals. Developing unconventional oil and gas exploration operations, technological advancements in fracking chemicals, the worldwide shale gas revolution, and increasing market potential all provide significant chances for the fracking chemicals market to grow and thrive. By capitalizing on these opportunities and responding to changing customer needs and market trends, fracking chemicals providers can improve their competitiveness, increase their market share, and promote long-term growth in the global marketplace.

Fracking Chemicals Market Regional Analysis

North America : Dominant Region with 7.65% Growth Rate (CAGR)

North America is the most significant market shareholder and is estimated to grow at a CAGR of 7.65% over the forecast period. North America emerged as the leading market for fracking chemicals in 2023-2024, owing to substantial shale gas and tight oil operations. According to the U.S. Energy Information Administration, hydraulic fracturing will account for 75% of total US oil and gas production in 2023, up from 69% in 2021. The American Petroleum Institute predicted a 15% rise in the usage of sophisticated fracking chemicals for better oil recovery by 2024. In Canada, the Canadian Association of Petroleum Producers reported a 10% increase in fracking activity in the Western Canadian Sedimentary Basin in 2023. 

Additionally, the United States Environmental Protection Agency reported that 85% of fracking operations in the country will use recycled water and more ecologically friendly chemicals by 2024, up from 70% in 2022. The region's supremacy is bolstered by technical developments, with the Society of Petroleum Engineers forecasting a 20% increase in nano-enhanced fracking fluids by 2023. According to the US Geological Survey, fracking chemical consumption in the Permian Basin alone increased by 25% in 2024. The combination of ample shale resources, advanced extraction technology, and a favorable regulatory framework strengthens North America's position as the world's leading market for fracking chemicals.

Asia-Pacific: Rapid Growth in China and Australia

Asia-Pacific is estimated to grow at a CAGR of % over the forecast period, with significant growth witnessed in various countries. China's National Energy Administration reported a 30% increase in shale gas output from fracking in 2023 over the previous year. In Australia, the Department of Industry, Science, Energy, and Resources reported a 20% increase in fracking activity in the Cooper Basin by 2024. In 2023, India's Directorate General of Hydrocarbons reported a 15% increase in the exploration of shale gas reserves by hydraulic fracturing. The ASEAN Centre for Energy estimates that Southeast Asian countries will invest 25% more in unconventional oil and gas development, including fracking, in 2024. 

Furthermore, the Asia-Pacific Energy Research Centre predicted that the region's need for fracking chemicals will increase by 18% by 2023, owing to rising energy demands. Despite environmental concerns, numerous countries in the area are actively developing their shale reserves. For example, Indonesia's Ministry of Energy and Mineral Resources announced a 12% increase in fracking operations for tight gas extraction in 2024. While growth in this region is strong, it lags behind North America because of geological constraints, water scarcity issues, and differing regulatory environments between countries.

Fracking Chemicals Market Segmentation Analysis

By Function

The fracking chemicals market is further segmented by function into gelling agents, friction reducers, corrosion inhibitors, biocide, surfactants, scale inhibitors, and others. The fracking chemicals industry is dominated by gelling agents, crucial components of hydraulic fracturing fluid. These agents, including guar gum and its derivatives, are essential for producing viscous fracturing fluids that suspend and transport proppants deep into subsurface formations. They increase the fluid's viscosity, allowing for more effective proppant deployment and improved fracture conductivity. Gelling agents are critical for enhancing healthy stimulation and production rates in shale gas and oil recovery operations, which is why they are widely used in hydraulic fracturing operations worldwide.

Friction reducers reduce friction within the fracturing fluid, which saves energy and improves pumping efficiency during hydraulic fracturing. Corrosion inhibitors safeguard metal equipment and infrastructure from the corrosive fluids used in fracking operations. Biocides inhibit microbial development, which can lead to equipment fouling and fluid degradation. Surfactants improve fluid performance and clean the formation surfaces. Scale inhibitors prevent mineral deposits, which can reduce well productivity. Other parts include pH adjusters, clay stabilizers, and defoamers, which address specific issues in hydraulic fracturing processes. These sub-dominant segments supplement gelling agents by improving fluid characteristics and operational efficiency, facilitating safe and successful shale gas and oil extraction procedures.

By Fluid Type

The fracking chemicals market is further segmented by fluid type into water-based fluid, oil-based fluid, and foam-based fluid. Water-based fluids dominate the fracking chemicals industry since they are widely used in hydraulic fracturing operations. These fluids are often water blended with various additives such as gelling agents, friction reducers, corrosion inhibitors, biocides, and surfactants. Water-based fluids are preferred over oil-based fluids because they are less expensive, easier to handle, and have environmental benefits. They make proppant movement more efficient and improve fracture conductivity, critical for enhancing healthy productivity in shale gas and oil extraction.

Hydraulic fracturing uses oil-based fluids to address specific geological requirements, such as high-temperature reservoirs or water-sensitive formations. These fluids provide improved lubrication and thermal stability but are more expensive and present environmental problems due to disposal and contamination. Foam-based fluids are a specialized section that produces stable foam for fracturing operations, improving fluid efficiency and minimizing water usage. They are appropriate for environmentally sensitive areas or formations that require high fluid performance. These sub-dominant sectors cater to various hydraulic fracturing operating requirements, offering flexibility and specialized solutions for improving healthy stimulation and production results in the fracking chemicals market.

Impact of covid-19

COVID-19 has had a devastating effect on all industry verticals globally. Rapid growth in business operations, post the COVID-19 outbreak, is projected to drive the adoption of the software to determine the current and frozen year tax values. Furthermore, changing taxation policies by various central governments amidst coronavirus outbreak is projected to increase the adoption of tax management software. For instance, in 2020, Saudi Arabia tripled the taxes on essential goods, which is about 15% amidst the COVID-19 outbreak.   

Recent Developments

• February 2024- DEP to require fracking companies to be more transparent about chemicals used in drilling. The Pennsylvania Department of Environmental Protection is enacting new laws requiring hydraulic fracturing operations to publicly disclose chemicals used before drilling unconventional wells. 
• January 2024- Governor Shapiro announced new fracking policies. The Pennsylvania Department of Environmental Protection will now force corporations to publicly disclose the chemicals they use for drilling and hydraulic fracturing. The DEP will then publish the information online.