Quantifying the Economic Impact of Hydraulic Fracturing Proppant Selection in Light of Occupational Exposure Risk and Functional Requirements

Sidharth Agrawal and Jeremy M. Gernand

Risk Analysis, 2020, vol. 40, issue 2, 319-335

Abstract: Selection of an effective and economic proppant material for hydraulic fracturing is an important design choice to optimize the production of oil and natural gas. Proppants are made of silica (quartz sand), alumina, resin‐coated silica, ceramics, and others. These materials can be toxic to varying degrees and lead to health problems in the employees handling them primarily due to inhalation exposure. Proppants are selected based on grain size, shape, strength, and cost. Current use is dominated by crystalline silica—the proppant that also has the greatest hazard as an inhalation toxin. Existing research describes the effect of silica on human health, but little research has been done to determine the risk‐reduction and social‐cost‐effectiveness associated with using alternative proppants in light of the health risks. This study quantifies the relative risks or benefits to human health by the use of these proppants through an economic analysis considering the health‐related economic impact and its technical attributes. Results show that the use of each ton of silica proppant results in $123 of external costs from fatalities and nonfatal illness arising due to exposure to silica for a crew handing 60,000 tons of proppants. If these health‐related externalities were incorporated into the cost, silica proppant could be economically replaced by less harmful, more expensive alternatives for hydraulic fracturing crews handling less than 60,000 tons of proppant each year.

Date: 2020
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https://doi.org/10.1111/risa.13419

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Persistent link: https://EconPapers.repec.org/RePEc:wly:riskan:v:40:y:2020:i:2:p:319-335

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