Oil and gas exploration and production growth, coupled with rising U.S. CAPEX investment and escalating proppant intensity–per-lateral-foot— especially in the Permian Basin—is driving “extreme” demand growth for proppant (frac) sand, according to IHS Markit. According to a new report, the current market value for frac sand exceeds $4 billion in 2018 and will reach nearly $6 billion by 2023. The market value for proppant sand was only $1.3 billion in 2016.

It is predicted that by 2023, North American frac-sand demand will reach 231 billion pounds. That’s an increase of 113 percent above peak demand levels for 2014, IHS Markit said.

“Sand proppant demand is at record highs—the growth rate is extreme by any measure,” said Brandon Savisky, senior market research analyst, cost and technology at IHS Markit and author of the IHS Markit ProppantIQ 2Q2018 Analysis. “We expect it will continue to expand at an estimated current annual growth rate of approximately 16 percent by 2023, with the Permian Basin leading the pack in terms of North American frac-sand demand. The basin accounts for nearly 40 percent of the market demand, but by 2023, the Permian Basin will account for almost 50 percent of proppant sand demand.”