The new management company for the Brownfield Guar Facility says falling oil prices is reason for concern as the crop’s main use is in hydraulic fracturing.
The Guar Facility in Brownfield which saw big trouble last year is back in business. While Brownfield’s Guar Splitting operation is now under new ownership and growers’ claims are settled, low oil prices mean the future is not exactly worry free.
Guar’s main use is in hydraulic fracturing and just as everything tied to the oil industry, growers have an anxious eye on collapsing oil prices.
The demand for guar is tied to the number of oil rigs doing fracking which is tied to the price of oil, which is down, so consequently the demand for guar is down according to the Chief Financial Officer and General Manager for Guar Resources, LLC.
Guar Resources obtained ownership of the bankrupt West Texas Guar during a reorganization plan in November. The agreement also contained a settlement for growers whom West Texas Guar had failed to pay for their 2013 crop.
Guar production involves splitting the beans, then refining them into a powder. As a crop, producers like guar because it demands little water and releases nitrogen into the soil.
Guar Resources is in the early stages of a $250,000 capital improvement project. Management plans to demolish the south barn and through the help of local contractors will build a new facility.