Insights of the Week
Coal will continue to be used at only a slightly lower rate in the U.S. if the
Clean Power plan is nullified. But new coal plants are unlikely due to a 60 year
shale gas supply and no guarantee that Republicans will hold sway for the long
term.
Thursday is the Valve IIoT webinar followed a week later by the IIoT in Oil and
gas. See the schedule at Weekly IIoT Webinars
Suez has acquired GE Water to pursue the 95 billion Euro industrial market which
Suez believes is bigger than the municipal market it now serves. This
acquisition will pave the way for Suez to become a major player in IIoT and
Remote O&M. Suez opened a monitoring center in France which provides intelligent
management solutions for sanitation as well as water facilities around the
world. In Chile Suez operates 40% of the municipal wastewater facilities. Will
Suez leverage IIoT to make a big move in the industrial arena?
Decision guides for high performance valves are now being compiled on a
collaborative basis. It is part of the Mcilvaine effort to empower IIoT with
IIoW (Wisdom). Valves for severe, critical, or unique service in oil and gas and
power are being analyzed. High Performance Valves and IIoT
The digital rapidity of IIoT has to be duplicated in IIoW. One route is to
record your sales power point presentations and make them accessible.
InterwebviewsT
$168 Billion Oil and GAS IIoT and Remote O&M Market by 2030
The oil and gas market opportunity for IIoT & Remote O&M will rise to $168
billion in 2030. $110 billion will be onsite expenditures by the oil and gas
companies but $58 billion will be for remote monitoring and support including
Software as a Service (SaaS) and data analytics. Data analytics in turn will
include IIoW (Industrial Internet of Wisdom). This in turn will foster Sourcing
as Service activities.
NAFTA will be the largest segment with oil and gas IIoT & Remote O&M revenues
rising from $13 billion in 2016 to $83 billion by 2030.
The NAFTA projections are based on the 2017 EIA reference forecast predictions
for energy pricing and consumption. Key assumptions are:
EIA Assumptions for the Year 2040
Reference High Low
Oil Price $/bbl. 109 226 49
N.G. Henry Hub $/million BTU 5 10 3
U.S. GDP % CAGR 2.2 2.6 1.6
Energy Net Trade BTU Quads 2 25 -11
Since July 2016, there has been a 20% increase in oil rig counts. Oil producers
have also increased their exports to India. These trends are showing the
rejuvenation of U.S. shale oil. The shale oil market is expected to gain
momentum from mid-2017.
Tight oil makes the biggest contribution to crude oil production with a 50%
growth from 4 million bbl./day now to 6 million bbl./d by 2040.
The oil and gas industry is already ahead of other industries in the use of IIoT.
More than half of the oil and gas companies are deploying IIoT-enabled
technology for remote monitoring. Asset reliability and energy efficiency round
out the top three non-product use cases (LNS Research).
Source: LNS Research
Some of the biggest opportunities will be created by regulations restricting
flaring in the U.S. Honeywell and Aereon will collaborate on solutions to help
industrial customers boost the safety, efficiency and reliability of their
operations by leveraging Honeywell's Industrial Internet of Things (IIOT)
ecosystem.
Aereon provides air emissions solutions for the complete oil and gas sector,
from the wellhead to the gas station. It offers products for flare systems,
enclosed combustion systems, high efficiency thermal oxidizers and vapor/gas
recovery units. "Aereon's fundamental strength is its wide array of
fit-for-purpose combustion and vapor recovery products supported by in-house
expertise to design, manufacture and support its field-installed base," said
Mark Zyskowski, Senior Global Vice President, Aereon. "We are pleased to be able
to bring our expertise to the IIoT ecosystem that Honeywell is developing to
help customers around the globe maximize value from their operations by tapping
into the power of the IIoT."
There will be a high ROI from automating remote operations. Well drilling and
completion is becoming increasingly complex while the reservoir of field
expertise is not growing to keep pace. Automation and monitoring of remote
operations leverages the expertise of the industry, decreases on site personnel
time and improves safety.
The complete analysis of IIoT & Remote O&M opportunities is provided in LINK TO
NO31
Details on the markets and project in oil and gas are found in LINK TO OIL, GAS,
REFINING MKTS PROJECTS
Various IIoW support activities offered by Mcilvaine include:
High Performance Valves and IIoT
4S01 Berkshire Hathaway Energy Supplier and Utility Connect
44I Coal Fired Power Plant Decisions
59D Gas Turbine and Reciprocating Engine Decisions
$11.5 billion Opportunity for High Performance Valves in IIoT and Remote O&M
The Industrial Internet of Things (IIoT) is a powerful new force shaping the way
valves will be purchased. The demand for valve automation and communication of
valve health and performance will be driven by IIoT advances. With the rapid
reduction in the cost of high quality sensors and the introduction of wireless
technology smart valves will be communicating with remote operators on an
accelerated basis.
Emerson, Flowserve, Pentair, GE and other valve companies are already pursuing
this market and generating revenues of $7 billion. This includes smart valve
revenues plus valves sold through IIoT decision makers. Some are third party
operators. In other cases, they are corporate entities with many plants and
centralized IIoT based valve selection. One important segment is repair part
inventory and replacement.
The world industrial valve revenues will grow from $62 billion in 2017 to $88
billion in 2025
World Industrial Valve Revenues $ millions
Segment 2017 2025
Traditional route to market 55 71
New route to market 4 10
New smart revenues 3 7
Total 62 88
IIoT Impacted Market 7 17
The traditional market will grow at 3% per year. However, the new route to
market through remote O&M will grow at 13%/yr. as will the additional revenues
generated by smarter valves.
World High Performance Valve Revenues $ billions
Segment 2017 2025
Traditional route to market 30 42
New route to market 2 5
New smart revenues 1.5 6.5
Total 33.5 53.5
IIoT Impacted Market 3.5 11.5
High performance valves comprise 55% of the total market today but with IIoT and
remote O&M will represent 60% of the market in 2025. High performance valves
include those in:
• severe service
• critical service
• unique service
If general purpose valves are the foot soldiers of IIoT then high performance
valves belong in the armoured division. Their performance is much more critical
to the outcome of the battle to improve plant performance.
Not only can valve companies boost Capex revenues for smart valves and Opex
revenues for service and parts but they can acquire process data to help them
design better valve products for specific applications. This proliferation of
information about valve performance will serve as a giant resource of valve
white papers. Proof of lowest total cost of ownership will be automatic.
The valve companies who best leverage this process and valve performance
knowledge will be the most profitable. Those focused on IIoT will achieve profit
gains of 45% in the high-performance segment and 32% overall. While those who
miss the boat will suffer profit decreases of 10%.
Valve % Profit in 2025 due to the Impact of IIoT and Remote O&M
High Performance Segment Total
(general and high performance)
Factor IIoT focused Valve Companies Others IIoT focused Valve Companies Others
Increased Market Share 15 -15 10 -10
Smart Revenues 10 0 7 0
Increased Base Prices with Better Products 20 0 15 0
Profitability Impact 45 -15 32 -10
McIlvaine has coined the term Industrial Internet of Wisdom (IIoW). The rate of
progress can be viewed as 1 x IIoT + 2 x IIoW. Transmitting all this data to
better manage assets is only 1/3 of the opportunity. 2/3 of the opportunity is
the improvement of assets and operations. Valve companies will be the source of
Valve IIoW but only if they understand the new market paths.
IIoT promises to revolutionize industry but only if it is accompanied by IIoW
(Industrial Internet of Wisdom). Decisive classification of high performance
valve applications, designs, and materials is critical to IIoT success. Analysis
of performance and comparison of results is important. Mcilvaine has four
services to support Valve IIOW.
N031 Industrial IOT and Remote O&M
High Performance Valve Decisions
4S01 Berkshire Hathaway Energy Supplier and Utility Connect
N028 Industrial Valves: World Market
Bob McIlvaine
President
847-784-0012 ext. 112
rmcilvaine@mcilvainecompany.com
www.mcilvainecompany.com