Do Not Overlook This Opportunity For Frac Sand Supply Chain Companies

The oil & gas industry is adjusting to what appears to be the new norm of $35-$40 oil. Some companies appear to be getting ready to ramp up production, once they are confident that prices will remain in the mid-$40’s or higher [There were reports earlier this week that oil could hit $50 by May]. Regardless, companies in the upstream supply chain should be looking at some of the opportunities that the downturn presents to them.

I also wanted to point out an enormous opportunity for suppliers in the frac sand supply chain. OSHA just released their new rule regarding worker exposure to crystalline silica. This rule will apply to workers from the mine to the wellhead. Everyone along that supply chain will need to understand how it applies to them, what is required, and they need to make sure that they comply to the rule. This new rule presents a great opportunity for plant designers, equipment suppliers,
dust control solution providers, and others in the supply chain to strengthen their relationships with their customers (and to land new customers). By becoming an expert on the new rules and compliance, these companies can transition from being a service or equipment provider to being a consultative partner to the customer. By including OSHA consulting with their existing service, experts can demonstrate how their product can help the existing customer ensure compliance. The same can be applied to new customers, offering an OSHA compliance review, along with recommendations for compliance. On the flip side, by leaving the customer to fend for themselves on the issue, the company runs the risk of an outside consultant audit their customer’s process & equipment and recommending a competitor’s solution. Companies who can become experts on the new rule will have a huge advantage over their competitors.

Keep an eye on the Frac Sand Weekly News Digest and this blog for information on how to get trained on the new regs and compliance. The Petroleum Connection remains in touch with OSHA and will be sure to pass on training opportunities. OSHA is still developing their own training and small business compliance consulting solutions in regards to this new rule. We hope to include them on the agenda at the 5th Annual Frac Sand Supply & Logistics Conference,
where we also plan to have several speakers and solutions providers on the topic. Please let me know if you have any questions or comments.