·       Asian Ultrapure Water System Sales to Exceed $3 Billion By 2016

·       The Future of Oil, Gas and Coal Dependent on Perception and Competition

• Utility E-Alert Headlines – October 17, 2014
• McIlvaine Hot Topic Hour Registration

Asian Ultrapure Water System Sales to Exceed $3 Billion By 2016

Double-digit annual growth will result in an ultrapure water system and consumables market in Asia which will exceed $3 billion /yr by 2016.  This is the prediction in Ultrapure Water: World Market published by the McIlvaine Company.  (www.mcilvainecompany.com)

Asian growth will exceed the other continents in the following applications:

·       Coal-fired Power

·       Nuclear Power

·       Photovoltaic

·       Flat Panel Displays

·       Memory

·       Semiconductors

·       Pharmaceuticals

·       Bottled Drinks

Asia will spend more for coal-fired ultrapure water systems than ROW combined.  China is building ultra supercritical boilers which require the most expensive ultrapure water systems.  India, Indonesia and other countries in the region are also planning large increases in coal-fired power generation.

Asia is the one region which has significant nuclear activity.  Nearly all the photovoltaic manufacturing is taking place in Asia.  The same is true for memory and flat panel displays.  Taiwan has become the leading semiconductor manufacturer with China in pursuit.  All these industries require ultrapure water at each processing step to remove the etching solutions and other chemicals used to form the lines and shapes.

The one area where Asia has not gained much ground is proprietary pharmaceuticals.  However, Asia is the selected location for generic pharmaceutical manufacture.  International drug companies are building very substantial research and production facilities in China and India. The growth in generics is higher than proprietary pharmaceuticals.

Asia is also expanding its manufacture of bottled water and other drinks where the source water has to be purified beyond the level of normal drinking water.  This application does not require ultrapure water at the highest level. This is defined as water that has 18 Megohm-cm or greater specific resistance, with other attributes such as bacterial count, TOC (total organic carbon), pyrogen and/or endotoxin, etc.  However, bottled water producers are using purification and monitoring techniques required by the traditional ultrapure water users.

For more information on Ultrapure Water: World Market, click on: http://home.mcilvainecompany.com/index.php/markets/27-water/447-n029-ultrapure-water-world-markets

The Future of Oil, Gas and Coal Dependent on Perception and Competition

Gas-to-liquids plants can cost up to $15 billion.  Coal-to-liquids plants cost even more. Investments in these plants is highly dependent on the perceived demand.  This factor, in turn, is a function of attractiveness of alternatives such as wind, solar, electrical energy storage, tar sands, coal bed methane, underground coal gasification, shale gas, shale oil, oil shale, small modular nuclear, small scale LNG, advanced coal-fired power plants, etc.  All these alternatives are continually assessed in two publications:  Oil, Gas, Shale and Refining Markets and Projects and Fossil and Nuclear Power Generation: World Analysis and Forecast published by the McIlvaine Company.  (www.mcilvainecompany.com)

The biggest variable in the mix among these alternatives is coal conversion.  The proven coal reserves (defined as presently known and economically minable) is 860 billion tons. This quantity would supply the world at present consumption levels for another 100 years. But coal has a much bigger potential than just this identified resource.  Consider that there is one trillion tons of coal under the North Sea.  Billions of dollars are being invested in underground gasification technology to inject steam and oxygen and extract gas.  CO₂ generated in the process would be used to increase yield of shrinking North Sea oil reservoirs.

China is well underway with a program to convert coal to gas, fuels and chemicals at a rate equal to the entire U.S. shale gas program.  If the projects in the planning stage are implemented, China will utilize 20 percent of the world’s annual coal consumption just to make gas and liquid products.

The ultimate mix between all these energy sources will be be determined by perception and competition.  In a chess game, the winner does a better job of perceiving the moves of the loser. Among the losers to date are owners of LNG regasification terminals in the U.S.  They did not perceive the moves of shale gas extraction companies.  However, if they convert these terminals to export LNG and build others to do so, then power plants which are relying on large quantities of cheap gas will be the losers. So both the quality of the competition and the perception of the opponent are factors in success.  Some of the important inputs include:

•        The differential price between diesel and LNG is a critical market factor.

•        Crude represents 65 percent of final fuel price.

•        The disparity between oil and gas prices on an equivalent Btu basis is a function of access.

•        Gas is not economically transported overseas except as LNG, whereas oil is economically transferred.

•        Even if the price of oil drops, the market for gas is not impacted if gas prices also drop proportionately.

•        Until the U.S. has the capability to sell large quantities of LNG offshore, the price disparity will continue.

•        Investors and gas producers are expecting gas in the U.S. to remain at $5/MMBtu.

•        China expects to make gas from coal at less than $5/MMBtu.

•        Shale gas operators are expected to keep expanding as long as oil is above $70/bbl.

•        Oil companies such as Chevron are bullish on increased oil and gas demand and are continuing with high levels of investment.

•        Saudi Arabia is able to increase or decrease output to maintain price levels.  Many other producers need price levels above $90 barrel to keep their economies healthy.

•        The oil reserves of Middle East producers are less than 50 years.

•        The Saudi production cost is only $6/bbl.

•        The Saudi oil value is much higher than $100/barrel because it is a resource which is dwindling at 4 percent per year.

•        The result is that the Saudi supply will be adjusted to balance long term value and short term needs.

•        Stranded gas and other sources of LNG where the acquisition price of the gas is negative will be unaffected by oil fluctuations between $80-110 bbl.

•        Safety perceptions of nuclear energy vary widely from country to country.

•        Environmental perceptions including climate change also vary widely between the developed and developing economies.

All these factors will continue to make projections about the production from each of these resources very speculative.

For more information on Oil, Gas, Shale and Refining Markets and Projects, click on:  http://home.mcilvainecompany.com/index.php/markets/28-energy/471-n049.

For more information on Fossil and Nuclear Power Generation: World Analysis and Forecast, click on: http://home.mcilvainecompany.com/index.php/markets/2-uncategorised/113-n043.

Headlines for Utility E-Alert –October 17, 2014 

UTILITY E-ALERT    

Table of Contents

COAL – US

• Xcel sets April for end of Coal burning at Burnsville Power Plant

COAL – WORLD

• Marubeni to develop 1,800–2,000 MW Coal-fired Power Plant in Myanmar
• Samsung to develop $2.5 Billion Thermal Power Plant in Central Vietnam

GAS/OIL – US

• Wärtsilä to supply 112 MW Peaking Power Plant in North Dakota
• New MD Power Plant provides Sustainable Power to DEC Members

GAS/OIL – WORLD

• 1MDB awarded contract for 2,000 MW Malacca Power Plant
• GE to support Iraq’s 750 MW Combined Cycle Power Plant Project
• Parsons Brinckerhoff /WBHO named EPC Contractor for Mozambique Gas-fired Power Project
• AES Dominicana Power Plant conversion to Combined Cycle
• Wärtsilä to supply a 139 MW Flexicycle Power Plant in Mexico

CO₂

• Exelon, CB&I, 8 Rivers develop Zero Emission Natural Gas-fired Power Project

NUCLEAR

• Canada unveils New Regulations to enhance Nuclear Emergency Management

BUSINESS

• AES signs Agreement to sell Interest in Turkish Assets for $125 Million
• Duke Energy Progress seeks FERC approval to buy Generation Assets in North Carolina
• URS Corporation named Exclusive Licensee for Linde Group’s NO_x Removal Technology for North America Power Industry
• Mitsui expands Astoria IPP stake
• Two Pipeline Projects competing for Dunkirk Power Plant in New York
• Why More Coal is going to Increase the Gas Turbine Market

HOT TOPIC HOUR

• “Dry Scrubbing” will be the Hot Topic Hour on October 23, 2014
• “Power Plant Cooling Decisions” is Hot Topic Hour November 13
• Upcoming Hot Topic Hours

For more information on the Utility Tracking System, click on: 

http://home.mcilvainecompany.com/index.php/databases/2-uncategorised/89-42ei.

McIlvaine Hot Topic Hour Registration

On Thursday at 10 a.m. Central time, McIlvaine hosts a 90 minute web meeting on important energy and pollution control subjects. Power webinars are free for subscribers to either Power Plant Air Quality Decisions or Utility Tracking System. The cost is $300.00 for non-subscribers.

See below for information on upcoming Hot Topic Hours. We welcome your input relative to suggested additions.

Click here for the Subscriber and Power Plant Owner/Operator Registration Form

Click here for the Non-Subscribers Registration Form   

Click here for the Free Hot Topic Hour Registration Form   

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Bob McIlvaine
President
847 784 0012 ext 112

rmcilvaine@mcilvainecompany.com

www.mcilvainecompany.com