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Full Steam Ahead for Shell in the Gulf

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Full Steam Ahead for Shell in the Gulf

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The Gulf of Mexico is open for drilling. “Open” is up for interpretation, but Shell PLC has taken the cue from the Biden administration and continues to pour billions of dollars into the region. Their initial investment decision had been made in 2018 but the decision to keep moving forward hinged somewhat on the signals of the Biden administration. In late June a proposal was released by the Interior Department allowing as many as 11 oil lease sales for offshore drilling. The proposal blocks new offshore drilling in the Pacific and Atlantic oceans but will allow limited expansion in Alaska’s south coast and the Gulf of Mexico.

Vito is the name of Shell’s 13th major offshore project in the Gulf. With a total cost of roughly $3 billion, Shell expects Vito to arrive at its destination, 150 miles southeast of New Orleans, by the end of July. From there it will begin to pump gas and oil in waters approximately 4,000 feet deep from eight wells. The larger oil industry had been lobbying Washington for a minimum of two annual lease sales in the Gulf over the next five years. While the administration responded favorably, including one in Cook Inlet, Alaska, officials indicated they could still move to block all new offshore-drilling sales. 

For the oil industry, having continued leasing to maintain its reserves for future production is vital. BP PLC is the Gulf’s second-largest producer and will also be moving forward with its drilling plans. While this is a political issue in many ways, Shell and BP have committed to shifting some of their investment away from fossil fuels and over to lower-carbon energy sources. Shell is planning on decreasing oil production by 1% to 2% per year until 2030, and then using gas and oil profits to spur the development of renewable energy. 

Shell is additionally planning to build smaller, cheaper drilling platforms. Vito, for example, is one-quarter of the size of Appomattox, Shell’s largest floating unit. Vito’s anticipated field life is 25 years. For platforms the size of Appomattox, it is common for the field life to stretch up to 40 years. Vito will be consuming just 40% of the power Appomattox would require and will be pumping for nearly half the years. This will all result in a lighter carbon footprint. 

Vito is expected to be the model moving forward. Shell has already embarked on a similar platform called Whale, expected to be in production in the Gulf, southwest of Houston in 2024. Gulf production from Shell was roughly 558,000 barrels a day in 2021. This was up 12% since 2017.        

Contractors wanting to keep their businesses profitable will need new strategies to combat rising fuel prices.
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5 Ways Contractors Can Reduce the Impact of High Fuel Prices

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Fuel is essential to almost every construction process. As a result, fast-rising fuel prices are cutting into contractors’ profits.

Experts say that fuel prices are likely to keep rising even as oil prices start to fall. Contractors wanting to keep their businesses profitable will need new strategies to combat rising fuel prices.

These are some of the best strategies that contractors are using right now to reduce fuel consumption and find better deals on fuel.

1. Invest in Fleet Management Software

How fleet vehicles and heavy construction equipment are used or maintained can have a significant impact on their fuel efficiency. Harsh driving, speeding, idling, and poor maintenance practices can all reduce the fuel economy of a truck or piece of construction equipment.

With fleet management software, contractors can identify how employees and subcontractors are using their fleet equipment. Combined with the right telematics solution, these software tools
can track and flag behaviors that make equipment less fuel-efficient.

These tools can also automatically notify managers or supervisors, allowing them to take quick action to stop the behavior and prevent it from happening in the future. Along with other digital construction tools, fleet management software can make tracking, directing, and scheduling fleet vehicle use much easier, as well.

Fleet management software can also make it easier to track equipment maintenance. Well-maintained fleets tend to be more fuel-efficient because everything from tire inflation to the freshness of engine oil can have an impact on equipment fuel consumption. By monitoring and scheduling equipment maintenance with the right tool, contractors can maximize their fleet’s fuel efficiency, helping to reduce fuel costs.

2. Upgrade to High-Efficiency Vehicles
The growing market of high-efficiency vehicles and construction equipment can help contractors reduce fuel expenses. By choosing a high-fuel-efficiency machine when upgrading equipment, contractors can potentially cut down the amount of fuel they need for construction processes.

Contractors can also consider adopting hybrid or alternative-fuel vehicles. These vehicles either take advantage of electric propulsion systems or alternative fuels, like biodiesel. In addition to reducing fleet emissions, these vehicles can significantly reduce a contractor’s fuel expenses.

Alternative fuels, like biodiesel and renewable diesel, tend to be cheaper than conventional diesel. For example, “the national average price of B-20 biodiesel blends in July 2021 was $3.05 per gallon compared to $3.26 per gallon for diesel fuel,” according to the Alternative Fuels Data Center.

By upgrading to vehicles or equipment that use these alternative fuels, contractors may be able to reduce their overall fuel expenses while also making their business more sustainable – a potential selling point for environmentally focused clients.

3. Rent Rather Than Buy Fleet Vehicles

Owning a fleet vehicle or construction machine comes with its advantages: primarily convenience, reliability, and the familiarity of equipment you may use frequently over the course of years.

However, buying isn’t a contractor’s only option, and renting can sometimes be more cost- effective and efficient than purchasing a fleet vehicle outright.

Renting is a great way to supplement core fleet vehicles, free up business capital, and minimize vehicle upkeep costs like maintenance, repairs, vehicle storage, and transportation to sites or
when vehicles break down.

Choosing to rent can also help contractors manage rising fuel prices. Buying a vehicle locks you into a particular make, model, and fuel efficiency. Over time, a purchased vehicle will slowly become obsolete. With renting, you’ll always have access to the newest and most fuel-efficient construction vehicles or machines available.

Renting may also provide a contractor with access to cost-friendly electric and alternative-fuel vehicles, helping them reduce their fuel expenses even further.

A fleet composed of both rental and owned equipment will provide contractors with a good balance of the benefits of both options.

4. Add a Fuel Surcharge to New Contracts

While not popular among customers, sometimes the only way to manage rising fuel prices is to pass along the cost increase. Adding additional fuel fees or surcharges to new contracts or increasing the overall contract price to cover rising fuel costs will help contractors manage the current fuel price spike.

When other options fail – like improving fleet fuel efficiency or sourcing the cheapest fuel available in your area – the fuel surcharge is a good fallback option to consider.

The specific amount of the fuel surcharge can vary depending on current fuel prices and the needs of a particular client. For example, some customers may have projects that require the use of machines that require an unusually large amount of fuel to operate.

Charging a larger fuel surcharge for these projects may help you adjust contract pricing based on how much fuel-intensive projects will increase typical operating costs.

5. Consider Electrifying Your Fleet

Rising fuel prices and a volatile oil market are likely to cause problems for contractors well into the future. Even after the current fuel price crisis ends, future market shocks could easily lead to steep fuel prices next year or the year after.

In addition to adopting more fuel-efficient vehicles and using software to improve fleet fuel efficiency, contractors can also utilize vehicles that don’t need gas or diesel at all.

Electric vehicles are a serious investment, and available EV options won’t offer the same variety as the internal-combustion-engine vehicle market. However, adopting one or more EVs could allow contractors to minimize the impact of high fuel prices on their profits or avoid paying for fuel altogether.

As the EV market expands over the next few years and electric construction equipment becomes more accessible, going electric will become steadily easier for contractors.

More EVs and electric construction machines will become available, providing contractors with options at varying price points. At the same time, a robust used EV market will begin to develop, providing contractors with access to cheaper-than-ever EVs.

Planning the total or partial electrification of their fleet now can help contractors prepare to save money on fuel prices in the near future, even if they’re not willing to adopt an EV right now.

How Construction Contractors Can Manage Rising Fuel
Prices
Experts believe fuel prices are likely to continue rising and that future fuel price spikes could be an inevitability. Because contractors can’t do without fuel, they’ll need to find new ways to
manage fuel prices.

Fleet management technology, high-efficiency vehicles, renting, and fuel surcharges can all help contractors cope with rising fuel costs. As a long-term strategy, investing in electric construction equipment may also help.

In any case, finding ways to both increase revenue and decrease fuel costs will help contractors navigate the current fuel market.

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U.S. States Producing the Most Oil

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With gasoline prices reaching their highest levels since 2014 this fall, consumers, policymakers, and economic experts have lately turned their attention to the state of oil production in the U.S. and worldwide.

The COVID-19 pandemic has been an uneasy time for oil, as with many other products and sectors of the economy. The price of oil futures briefly turned negative in the first months of the pandemic, and remained at relatively low levels through most of 2020 and the first part of 2021, a product of reduced demand for fuel and a price war between Russia and Saudi Arabia. While demand has recovered the longer the pandemic has gone on, oil production has been affected by the global supply chain struggles that many other industries are experiencing as well. As a result, oil prices have rebounded to their highest levels in more than half a decade.

The volatility of the oil markets during the COVID-19 pandemic highlights the challenges of having a critical product like oil be part of a complex globalized economy. Even before the pandemic, many political and economic leaders had been seeking to lessen U.S. dependence on foreign sources of oil to make the country more self-reliant in its energy mix.

The U.S. has had success on this front in recent years. The U.S. saw a steady decline in oil production from the late 1980s to the mid-2000s, a product of a range of factors including decreased demand, the growth of the environmental conservation movement, and increased involvement in the Middle East. Oil production in the U.S. bottomed out at 5 million barrels per day in 2008. Since then, as policymakers have prioritized domestic production and the rise of techniques like fracking have reduced the cost of extracting petroleum, U.S. production has boomed. In 2018, the U.S. surpassed Russia and Saudi Arabia to become the world’s leading producer of crude oil.

The result of this growth in domestic production has been a sharp decline in petroleum imports. Imports have fallen since their peak of 13.7 million barrels per day in 2005, dropping to only 7.85 million in 2020. After taking exports of 8.5 million into account, the U.S. actually became a net exporter of oil for the first time last year.

In the U.S., as is the case globally, oil reserves are not evenly distributed, and some states produce significantly more than others. Texas is far and away the leading oil producer in the U.S. at nearly 1.8 billion barrels annually—more than four times the total for runner-up North Dakota. States in the Plains and Mountain West fare best, along with Alaska and Gulf Coast states like Louisiana and Mississippi.

The data used in this analysis is from the U.S. Energy Information Administration. To determine the states producing the most oil, researchers at Commodity.com calculated the total annual crude oil production in 2020. In the event of a tie, the state with the higher 10-year change in annual crude oil production was ranked higher. Researchers also included the latest statistics on proven oil reserves, the number of operable petroleum refineries, and per capita oil consumption.

Here are the states producing the most oil.

State      Rank      Total annual crude oil production (thousand barrels) 10-year change in annual crude oil production Crude oil reserves (million barrels)           Number of operating refineries Per capita oil consumption (barrels)
Texas     1      1,776,449 +316.3% 18,622 31        53.6
North Dakota     2      434,889 +286.4% 5,897 1        46.8
New Mexico     3      370,402 +464.9% 3,456 1        24.1
Oklahoma     4      171,740 +144.7% 2,047 5        25.0
Colorado     5      167,832 +407.5% 1,414 2        18.2
Alaska     6      163,852 -25.1% 2,680 5        53.2
California     7      143,114 -28.6% 2,213 14        16.8
Wyoming     8      89,091 +65.3% 1,013 4        49.9
Louisiana     9      36,708 -45.7% 389 16        80.9
Utah     10      30,951 +25.5% 275 5        18.5
Kansas     11     28,260 -30.2% 313 3        23.2
Ohio    12      23,819 +399.1% 88 4        18.1
West Virginia     13      19,059 +934.7% 13 1        22.9
Montana     14      18,985 -25.1% 298 4        31.4
Mississippi     15      14,166 -40.9% 114 3        24.9
United States     –      4,129,563 +106.3% 44,191 129        22.8

 

For more information, a detailed methodology, and complete results, you can find the original report on Commodity.com’s website: https://commodity.com/blog/states-producing-oil/

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AI in the Oil and Gas Market

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Artificial Intelligence (AI) is beneficial to all types of industries. In the oil and gas industry, it stands to make huge gains. The industry is one of the most dangerous because of the constant risk of fires and explosions due to the explosive nature of these fuels. Digital transformation in the oil and gas sector may save about 10% of field operations cost thanks to using augmented visual technologies. AI improves business operations, the productivity of the fuels, and safety. It also lends preciseness to applications such as quality control, prediction planning, and predictive maintenance, all of which affect the running of the business.

AI technologies are used in three ways. The first is in operation, which pertains to the upstream, midstream, and downstream. Upstream deals with the exploration and production sector. Midstream is when the transportation of crude or refined petroleum products takes place. Downstream is the process of refining, processing, and purifying crude oil and natural gas.

The second is service type defined by professional services and managed services. The third is geography, which is segmented into five continent-based areas of the world.

Use of AI In Safety

AI works to optimize operations during the upstream, midstream, and downstream functions. Defects may arise in the pipeline or in the mechanisms used to explore for oil and produce it. Using AI will detect any defects in the machinery or pipeline used to explore, produce, transport, refine and process crude oil and natural gas, enabling the rectification of any identified error. This will save costs and prevent extensive damage that may otherwise have occurred.

AI in the oil and gas industry promotes high safety and security standards. Oil and gas are highly dangerous because of the fuels’ flammability and the production of toxic fumes. AI systems can monitor toxicity levels and leaks and send an alert to rectify the flagged issues.

Another safety hazard in the industry is the change of temperature. Environmental conditions can cause changes in the safety of the storage and transportation of crude oil and natural gas. Early detection is key to make the necessary corrections to avert disaster quickly. AI can automatically adjust heating and cooling systems so that the product remains safe throughout the changing seasons of the year. AI will also help alert the maintenance crew when maintenance is needed on various machinery used to process and transport the crude oil.

AI In Business Optimization

AI aids businesses to predict downtimes, for example, when machinery is being maintained. The business can make arrangements to get alternative equipment, thus preventing loss of income because of better planning.

With proper maintenance, the life of the machinery is lengthened, which results in long-term cost savings.

Data is used in the oil industry to derive information on various plants and assist geoscientists in making strategic decisions. For example, if there is a need to move an exploration plant to another site. AI can quickly process large amounts of data, enabling real-time decision-making that improves overall business operations, leading to efficiency, fewer risks, and damage, which is costly, and cost savings based on improved business processes.

AI-based technologies can also increase the rate of exploration, which is a time-consuming and capital-intensive venture. AI can interpret the geology, geophysics and oil reservoir of a geographical location so that exploration is more precise, thus eliminating the need to spend more money on a hit-and-miss scenario.

AI in Quality Assurance

Artificial Intelligence in the oil and gas industry is great for quality assurance. The industry is highly dynamic, and the risk factors are high. AI-based technologies are designed for seamless applications and limitless uses. This increases the quality of the entire process from the beginning point of exploration to the endpoint of purification and processing crude oil and natural gas. This is done by early detection of any existing or potential risks to be corrected immediately.

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GLOBAL TRADE’S 2021 TOP STATES AND CITIES FOR MANUFACTURING

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While 2020 was by no means an ordinary year, manufacturing still remains a strong industry in the United States, largely due to manufacturers keeping on their toes and pivoting when necessary. While some categories were able to chug along at the same output as usual, others changed their products to keep with the times, adding hand sanitizer or PPE to their product lines. Some, unfortunately, have not been as lucky, with supply shortages crippling or slowing output.

In better news, manufacturing is starting to rebound in some of the harder-hit places. In fact, in the Dallas-Fort Worth metropolitan area, manufacturing jobs saw growth in March that is expected to continue throughout the year. According to the Institute for Supply Management’s most recent survey, manufacturing saw the fastest expansion growth in March 2021 since December 1983.

That’s great news for manufacturing, but a welcome consequence of rapid expansion is a need for more employees. So, where do you go when you need a skilled workforce that’s ready to go? Here’s a list of the best areas for the top manufacturing categories in the United States.

Pharmaceuticals

While many areas around the U.S. boast a strong pharmaceutical economy, Cambridge, Massachusetts, remains the top spot for biotech in the country. The state even offers generous incentives to companies looking to expand in its slice of New England, including tax benefits, incubators, education and pre-permitted worksites.

With the most highly educated workforce in the country and 18 out of the 20 top biotech companies in the world boasting at least a location in the Boston area, Massachusetts should definitely be on your shortlist if you’re looking for biotech or pharmaceutical manufacturing space.

Automotive

With apologies to some states in the South and areas along the U.S.-Mexico border where automotive manufacturing is thriving and growing, Michigan is still the king—undeniably. With nearly 1,000 automotive-related manufacturing companies, a highly skilled workforce, ample connections and—let’s face it—a deep and rich vehicle history, Michigan once again tops the list, towering over its most closely-ranked competitors. 

In 2020, manufacturing made up nearly 20 percent of the state’s total output, while workers from the sector filled 14.20 percent of Michigan’s jobs, according to data from the National Association of Manufacturers.

Oil Production

If your business is oil or oil adjacent, Texas is still the place to be. With chemicals, petroleum and coal ranking as the top three industries in the state, Texas has abundant natural resources and the skilled workforce to get the job done right. In fact, the Lone Star State was responsible for more than 40 percent of U.S. oil production in 2019 as well as 25 percent of the country’s total natural gas output.

Texas is home to the popular Texas Enterprise Fund, an economic development incentive that helps incoming businesses. The state still boasts its own power grid and is No. 1 in oil, gas and wind energy.

Computers and Electronics

When it comes to computer manufacturing, California naturally gets the top spot. Home to Silicon Valley, computers are California’s largest industry, raking in a whopping $93.1 billion in 2015. According to Wall Street, that’s more than the economy of 14 other states combined! 

California also has a highly-skilled computer science manufacturing workforce, with a variety of tech jobs and strong education programs that attract top talent from all around the world.

Food Production

Once again, California takes the lead when it comes to manufacturing, only this time we are referencing the food manufacturing category. With a pleasant climate and ample farming space, California is an ideal place for farming and food manufacturing. 

California is home to such food manufacturing giants as Annie’s and Del Monte, and between the state’s farm community and skilled food manufacturing workforce, your business will be in good hands in the Golden State.

Quality of Life

Though you can’t manufacture quality of life per se, there’s something to be said for locating your manufacturing business somewhere with a high quality of life for yourself and your workers. For the quality of life metrics, San Jose, California, tops the list. One of the top cities for manufacturing in 2020, San Jose is home to more than 65,000 manufacturing jobs. The city’s manufacturing output was $76 billion in 2018 alone.

As for the quality of life, San Jose is No. 1 for college readiness for high school students, and the city’s mild climate and small city feel earned it the 19th spot (out of 150) in the Gallup National Health and Well-Being Index. Even WalletHub named San Jose the “second happiest place to live in America,” and U.S. News & World Report named the city the third best place to live in America in 2017.

Most Manufacturing Job Growth

Hinesville, Georgia, earns the top spot for manufacturing growth, expanding an impressive 27.50 percent between 2017 and 2018. With nearly 18 percent of its total workforce in manufacturing, Hinesville has also seen recent increases in job growth.

The city, which is home to manufacturers in the paper and plastics industries, among others, was recently named No. 3 for manufacturing workers by SmartAsset.

Top State for Manufacturing, Overall

For the top spot for manufacturing overall, California again takes the crown, with its electronics and computer manufacturing grossing well over the $100 million mark. In 2020, the Golden State employed 1.2 million workers at nearly 39,000 companies, with average pay for a manufacturing engineer coming in around $77k, according to Salary.com. California consistently ranks higher for manufacturing salaries compared to the national average.

The state had $149.56 billion in manufactured goods exports in 2019, according to the National Association of Manufacturers, and has grown 19.87 percent in manufactured goods exports between the years of 2010 and 2019.

Most Manufacturing Jobs

The Elkhart-Goshen, Indiana, metropolitan area holds the title for most manufacturing jobs with approximately 38 percent of the region’s workforce in the manufacturing industry, according to the county website. (A recent Fox News report claims it’s actually a whopping 58 percent!)

The area has nearly 1,000 manufacturing companies spanning 14 industries, including recreational vehicle manufacturers Thor Industries and Forest River, Inc. A versatile, skilled workforce is ready to work for new and expanding businesses relocating to the community, and the Elkhart County EDC can assist with everything from incentives to training programs.

Whether you’re looking to manufacture automotive products or electronics, food or technology, there’s no need to look abroad: The United States has plenty of sites and skilled workers to suit your business needs.

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U.S. States Most Dependent on Fossil Fuels

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With the effects of global climate change becoming increasingly apparent, policymakers across the U.S. are moving to reduce the nation’s reliance on carbon-based fossil fuels.

At the beginning of his term, President Joe Biden rejoined the Paris Climate Accord, and in April, the Biden Administration announced aggressive new greenhouse gas reduction goals, including an overall aim to reduce U.S. greenhouse gas pollution to half of 2005 levels by 2030. Meanwhile, nearly 40 states have adopted renewable portfolio standards to facilitate a transition away from fossil fuels for energy production to renewables.

Despite these efforts, however, fossil fuel consumption remains deeply entrenched in the U.S. economy, and it could take years to transition away from fossil fuels as the country’s primary energy source.

Petroleum remains the leading source of energy in the U.S., accounting for approximately one-third of energy consumed. Energy consumption from natural gas expanded over the last decade as the rise of hydraulic fracturing made it less costly to extract. Most of that growth has come at the expense of coal, which represented 22.7% of the energy consumed in 2008 but just 13.1% a decade later. And while nuclear has held steady and renewables have continued to grow with improved technology and greater scale, fossil fuels still represent more than 80% of total energy consumption in the U.S. each year.

One example of the difficulties of shifting away from fossil fuels is consumers’ relationship to gasoline and car travel. Recently, gasoline prices have been on the rise again: prices dropped sharply in 2020, as many travelers and commuters stayed off the roads during the COVID-19 pandemic. Now, with many public health restrictions being relaxed as cases decline and more people get vaccinated, prices have topped $3 per gallon nationally for the first time since 2014. But despite what the laws of supply and demand might suggest, rising prices do not strongly affect driver behavior: research shows they tend to purchase the same amount of gasoline regardless of how much it costs. Instead, breaking drivers’ reliance on fossil fuels will depend on auto manufacturers providing more hybrid and electric options, whether by choice or by policy, like California’s zero-emission vehicle regulations.

State-level data reinforces that there is a long way to go before the transition away from fossil fuels is complete. Every single U.S. state derives at least 50% of its energy from fossil fuels, and a total of nine states derive more than 90% of their energy from fossil fuels. Among the most dependent are small states like Delaware and Rhode Island, which import most of their energy from elsewhere, and states with rich stores of fossil fuels, like Alaska, West Virginia, and Kentucky. At the other end of the spectrum are states like Washington, Oregon, and New Hampshire, which rely more on nuclear and renewables like hydroelectric power and derive less than 60% of their energy from fossil fuels.

To find the states most dependent on fossil fuels, researchers at Commodity.com used data from the U.S. Energy Information Administration to calculate the percentage of total primary energy consumption from coal, natural gas, and petroleum in 2018 (the most recent available data). Researchers also calculated the percentage of total primary energy consumption derived from renewable sources, as well as the largest fossil fuel source.

Here are the states most dependent on fossil fuels.

State Rank Percentage of energy derived from fossil fuels Percentage of energy derived from renewables Total energy consumed from fossil fuels (trillion BTU) Total energy consumed from renewables (trillion BTU) Largest fossil fuel source

 
Delaware     1     96.4% 3.6% 213.1 8.0 Petroleum
Alaska     2     95.9% 4.1% 584.8 25.0 Natural Gas
West Virginia     3     95.4% 4.6% 1,103.3 53.7 Coal
Rhode Island     4     95.0% 5.0% 189.1 10.0 Natural Gas
Kentucky     5     94.1% 5.9% 1,616.5 102.1 Coal
Wyoming     6     93.5% 6.5% 793.2 54.9 Coal
Indiana     7     93.4% 6.6% 2,617.2 185.9 Coal
Utah     8     93.1% 6.9% 830.0 61.3 Petroleum
Louisiana     9     92.1% 3.7% 3,895.5 155.0 Petroleum
Texas     10     89.9% 7.1% 12,752.3 1,009.0 Petroleum
Ohio     11     89.7% 4.7% 3,040.2 158.6 Natural Gas
Hawaii     12     89.4% 10.6% 261.8 31.1 Petroleum
Colorado     13     88.8% 11.2% 1,305.1 164.6 Natural Gas
Mississippi     14     88.2% 6.1% 1,116.6 76.8 Natural Gas
Missouri     15     88.0% 5.9% 1,608.7 108.5 Coal
United States     –     80.5% 11.2% 81,238.0 11,281.6 Petroleum

 

For more information, a detailed methodology, and complete results, you can find the original report on Commodity.com’s website: https://commodity.com/blog/states-fossil-fuels/

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Three Key Aspects that will Influence the Demand for Industrial Sensors by 2027

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Large-scale adoption of industrial robots across manufacturing & processing industries is expected to offer a considerable push to the industrial sensor market outlook. According to the International Federation of Robotics, around 2 million industrial robots are expected to be utilized across factories worldwide by 2022. Robotic Process Automation (RPA) technology in the manufacturing sector, as well as automation equipment such as HMI (human-machine interface) and PLC (programmable logic controllers) in assembly and production lines heavily, rely on industrial sensors.

The demand for such automation equipment may accelerate supported by favorable government initiatives designed to advocate the acceptance of industrial automation in the food & beverage sector. In March 2021, the Government of Australia announced an investment of USD 993 million to support the region’s F&B manufacturers under its MMI (Modern Manufacturing Initiative) scheme.

Projections from a report published by Global Market Insights, Inc., suggest that the industrial sensors market is expected to surpass USD 30 billion by 2027. Although, it is vital to note that the shortage of raw materials & components due to imposed COVID-19 restrictions have severely impacted the industrial sensors market growth in mid-2020. The shift of existing manufacturing facilities to new regions due to political and business obstacles might hinder the market growth during the pandemic.

Here are some of the trends to look for in the industrial sensors market until 2027:

Force Sensors Witnessing High Demand

Industrial IoT is steadily extending its reach across the pharmaceutical, food & beverage, chemical, and oil & gas sector. As a vital component in industrial IoT, industrial sensors are used to detect, measure, and analyze parameters such as level, temperature, pressure, force, and position, among others. Reports indicate that the force sensor segment held a market share of around 8% in 2020.

Force sensors are used to measure various physical parameters such as torque, mass, and weight of an object in the industrial sector. These sensors are commonly used in counting scales, hopper scales, bench scales, platform scales, truck scales, and belt scales. Force sensors have high capabilities to monitor the load and prevent industrial machinery from overloading and find application in force exertion control and industrial test benches in industrial robotics.

Demand Across the European Pharmaceutical Sector

Europe is home to some of the world’s leading pharmaceutical manufacturers such as AstraZeneca, Novo Nordisk, and Pfizer, Inc., among others. These companies are currently emphasizing on the mass production of vaccines and novel drugs. Certain equipment used in the medical industry are integrated with force sensors for fluid monitoring applications, endoscopic surgery, dialysis machines, physical therapy equipment, orthopedics and MRI devices.

Pharmaceutical companies in the region are extensively focusing on new research & development activities, increasing the adoption of industrial sensors. High-volume manufacturing and large-scale investments in the pharmaceutical sector will devise new opportunities for industrial sensor manufacturers in Europe. As per estimates, the industrial sensors of Europe is anticipated to register 7% CAGR from 2021 to 2027.

Use of Gas Sensors in Mining Application

The demand for industrial sensors such as gas sensors is escalating in mining & exploration activities. Generally, industrial gas sensors are used undermining conditions to monitor safety parameters to safeguard miners from toxic & flammable gases. Linking sensors with IoT systems will help mining companies to extract real-time & exact data about the temperature, pressure, and gases in the mines. The mining application segment held a 7% market share in 2020 and is projected to grow at 8% CAGR by 2027.

Source: https://www.gminsights.com/industry-analysis/industrial-sensors-market

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Drilling Rig Curbs Squeeze the Global Baryte Market

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IndexBox has just published a new report: ‘World – Barytes – Market Analysis, Forecast, Size, Trends and Insights’. Here is a summary of the report’s key findings.

In 2020, the global baryte market fell by 15%, hampered by a severe decline seen in the oil industry, which currently consumes 80% of the total baryte output. India remained the only country to maintain 2019 production figures. While the oil industry is set to operate at minimum production levels in the medium term, alternative chemical, coating, and construction baryte applications may emerge as market drivers. 

Key Trends and Insights

In 2020, global baryte production fell by near 20% y-o-y to 7.8М tonnes (IndexBox estimates). Many baryte mining and processing companies ceased to operate following the sharp slump in demand from the oil and gas sector, which consumes 80% of global baryte output. In accordance with Baker Hughes data, the number of drilling rigs declined from 2,177 in 2019 to 1,352 in 2020, and only 1,228 rigs remained in operation in early 2021.

In most countries, baryte exports in 2020 experienced a twofold decrease. India remained the exception, compensating for the drop in exports to the U.S. by increasing export supplies to the Middle East. Despite the decrease of 2020, India and China remain the largest baryte producers in the world and continue to dominate the global exports with a combined share of 55%.

Following the slump seen in 2020, the forecast indicates that the global baryte market may reach 8M tonnes by 2030, achieving an average annual growth rate of 1.0% CAGR over the period from 2020-2030. Maintaining oil and gas drilling even at the minimum level will buoy baryte consumption. Further expansion of the market is more likely to come from the increased demand for barytes as a filler for resin, paper, linoleum, primers for vehicle coatings, and high-density concretes.

Global Baryte Consumption

The countries with the highest volumes of baryte consumption in 2020 were China (2M tonnes), the U.S. (1M tonnes) and Saudi Arabia (688K tonnes), together accounting for 51% of global consumption. These countries were followed by India, Kazakhstan, Morocco, Russia, Kuwait and Iran, which accounted for a further 29%.

From 2007 to 2020, the most notable growth rate in terms of baryte consumption, amongst the key consuming countries, was attained by Kazakhstan, while baryte consumption for the other global leaders experienced more modest paces of growth.

In value terms, China ($272M) led the market, alone. The second position in the ranking was occupied by the U.S. ($133M). It was followed by Kazakhstan.

Global Baryte Imports

The U.S. (855K tonnes) and Saudi Arabia (688K tonnes) represented roughly 51% of total imports of barytes in 2020. Kuwait (218K tonnes) held the next position in the ranking, followed by the Netherlands (195K tonnes). All these countries together took near 14% share of total imports. The United Arab Emirates (106K tonnes), Russia (82K tonnes), Spain (75K tonnes), Oman (65K tonnes), Norway (61K tonnes), Azerbaijan (59K tonnes), Argentina (53K tonnes) and Indonesia (53K tonnes) held a relatively small share of total imports.

In value terms, the U.S. ($122M) constitutes the largest market for imported barytes worldwide, comprising 29% of global imports. The second position in the ranking was occupied by Saudi Arabia ($59M), with a 14% share of global imports. It was followed by the Netherlands, with a 6.3% share.

In the U.S., baryte imports expanded at an average annual rate of +1.9% over 2007-2020. In the other countries, the average annual rates were as follows: Saudi Arabia (+12.0% per year) and the Netherlands (+1.9% per year).

In 2020, the average baryte import price amounted to $138 per tonne, picking up by 9.1% against the previous year. There were significant differences in the average prices amongst the major importing countries. In 2020, the country with the highest price was Azerbaijan ($206 per tonne), while Kuwait ($74 per tonne) was amongst the lowest.

Source: IndexBox AI Platform

electricity
Archives, Global Trade Daily, Utilities

States With the Most (and Least) Expensive Electricity

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When an extreme winter storm tore through Texas earlier in 2021, the widespread power outages that followed put a microscope on how electricity is produced and generated. A state that prides itself on its critical role in the energy economy—both as a source of traditional fossil fuel energy sources like oil and a growing hotspot for renewables like wind and solar—had its electric grid completely crippled for days. Stories emerged of customers being billed thousands of dollars for using the state’s limited supply of electricity in the storm’s aftermath. The situation became a flashpoint for a longer-running debate in the state (and beyond) over whether renewables or fossil fuels were a more dependable source of energy.

Despite the renewed political back and forth over energy production in the wake of the Texas storm, the overall trends in the U.S. energy sector are undeniable: renewables will be the fastest-growing contributor to electricity production in the U.S. in the decades to come. Government incentives and technological advancements in the renewable sector have lowered costs and improved reliability in recent years, and low costs will spur increased adoption of the newer technologies.

Data from the U.S. Energy Information Administration show that renewables currently represent around 21% of electricity generated in the U.S. By 2050, that figure is expected to double. Meanwhile, natural gas will decline slightly from 40% to 36% of electricity production over the same span. And the respective shares of electricity generated from nuclear and coal will be nearly cut in half.

The increased use of renewable sources will also pass on savings to consumers. The cost of electricity is also projected to decline in the next three decades, albeit gradually. The 2021 cost of electricity per kilowatt-hour currently averages around 10.5 cents across all sectors; that number will drop to 9.6 cents by 2050. And this trend will not be limited to any one sector: cost projections for electricity in the residential, commercial, industrial, and transportation sectors all show the same downward trend. Customers can expect to see a reduction in retail prices across the energy sector spectrum as the cost of electricity generation declines.

Some parts of the country could feel more of the benefit than others as costs decline. By one measure—average monthly residential electricity bill—most of those beneficiaries will be in the Southeastern U.S. The main factor driving costs in the Southeast is the greater use of electricity throughout the year compared to other regions. Warmer weather in the summer means high bills from air conditioning, and in the winter, Southeastern households are more likely to heat their homes with electricity than with other sources like natural gas or fuel oil. While these factors suggest that consumption levels will remain high, customers in the Southeast will benefit from electricity’s lower unit costs.

Another way to evaluate the different costs between states is to look at the average per kilowatt-hour cost of electricity across all sectors. On this measure, one of the key factors driving disparities between states is whether the state must import fuel or energy to supply their electricity. The most expensive states include the geographically remote Hawaii and Alaska, along with New England states that have largely retired old coal and nuclear facilities in recent years and rely on imported natural gas for electricity. In contrast, states, where electricity prices across sectors are cheap, tend to have nearby resources for electricity production, whether that be natural gas, coal, or a strong renewables sector.

To find the states with the most and least expensive electricity, researchers at Porch used information from the U.S. Energy Information Administration and ranked states based on the average electricity price for all sectors in cents per kilowatt-hour (kWh). In the event of a tie, the state with the greater residential price for electricity was ranked higher.

Here are the states with the most and least expensive electricity.

States With the Most Expensive Electricity

State Rank Average electricity price for all sectors Residential price Average monthly residential bill Average monthly consumption

 
Hawaii 1 28.72¢ per kWh 32.06¢ per kWh $168.21 525 kWh
Alaska 2 20.22¢ per kWh 22.92¢ per kWh $127.29 555 kWh
Connecticut 3 18.66¢ per kWh 21.87¢ per kWh $150.71 689 kWh
Rhode Island 4 18.49¢ per kWh 21.73¢ per kWh $121.62 560 kWh
Massachusetts 5 18.40¢ per kWh 21.92¢ per kWh $125.89 574 kWh
New Hampshire 6 17.15¢ per kWh 20.05¢ per kWh $120.04 599 kWh
California 7 16.89¢ per kWh 19.15¢ per kWh $101.92 532 kWh
Vermont 8 15.36¢ per kWh 17.71¢ per kWh $97.18 549 kWh
New York 9 14.34¢ per kWh 17.94¢ per kWh $103.60 577 kWh
Maine 10 14.04¢ per kWh 17.89¢ per kWh $100.53 562 kWh
United States – 10.54¢ per kWh 13.01¢ per kWh $115.49 887 kWh

 

States With the Least Expensive Electricity

State Rank Average electricity price for all sectors Residential price Average monthly residential bill Average monthly consumption

 
Louisiana 1 7.71¢ per kWh 9.80¢ per kWh $120.70 1,232 kWh
Oklahoma 2 7.86¢ per kWh 10.21¢ per kWh $113.93 1,116 kWh
Idaho 3 7.89¢ per kWh 9.89¢ per kWh $93.83 949 kWh
Washington 4 8.04¢ per kWh 9.71¢ per kWh $94.49 973 kWh
Wyoming 5 8.10¢ per kWh 11.18¢ per kWh $96.53 864 kWh
Arkansas 6 8.22¢ per kWh 9.80¢ per kWh $109.46 1,118 kWh
Utah 7 8.24¢ per kWh 10.40¢ per kWh $75.63 727 kWh
West Virginia 8 8.49¢ per kWh 11.25¢ per kWh $121.90 1,084 kWh
Texas 9 8.60¢ per kWh 11.76¢ per kWh $134.07 1,140 kWh
Kentucky 10 8.61¢ per kWh 10.80¢ per kWh $120.08 1,112 kWh
United States – 10.54¢ per kWh 13.01¢ per kWh $115.49 887 kWh

 

For more information, a detailed methodology, and complete results, you can find the original report on Porch’s website: https://porch.com/advice/states-with-the-most-least-expensive-electricity

metal tank
Archives, Global Trade Daily, News

The Pandemic to Undermine the Growth of the American Metal Tank Market

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IndexBox has just published a new report: ‘U.S. Metal Tank (Heavy Gauge) Market. Analysis And Forecast to 2025’. Here is a summary of the report’s key findings.

In 2019, the U.S. metal tank market increased by 2.3% to $7.7B, rising for the third year in a row after two years of decline. The pace of growth appeared the most rapid in 2014 when the market value increased by 5.2% against the previous year. As a result, consumption attained a peak level of $9.6B. From 2015 to 2019, the growth of the market remained at a lower figure, hampered by both an economic slowdown and lower metal prices which plummeted amid a sharp drop of global oil and commodity prices.

Metal tanks, as an element of engineering infrastructure, are widely used in various industries, particularly, in oil and gas extraction and processing, as well as in the chemical industry, and transport facilities. Therefore, the key factor determining the development of the market is the dynamics of the industrial sector, which, in a broader context, reflects the overall GDP growth. Another particular fundamental is the state of the global oil market which determines capital investment in the oil and gas sector.

According to the World Bank outlook from January 2020, the U.S. economy was expected to slow down to +1.7% per year in the medium term, hampered by increasing global uncertainty, trade war, and slower global growth. In early 2020, however, the global economy entered a period of the crisis caused by the COVID-19 epidemic, due to which most countries in the world put on halt production and transport activity. The result will be a drop in GDP relative to previous years and an unprecedented decline in oil prices.

The U.S. is struggling with a drastic short-term recession, with the expected contraction of GDP of approx. -6.1% in 2020, as the hit of the pandemic was harder than expected, and unemployment soared due to the shutdown and social isolation.

The industrial sector has proven vulnerable to the pandemic as due to quarantine measures, industrial facilities were paused, and the drop in incomes of the population makes the growth of end markets unfeasible. The oil and gas sector also challenges a drastic drop in drilling activity and oil extraction which is due to much lower demand for oil amid the pandemic and the related dramatic drop in oil prices.

Tight financial conditions and uncertainty regarding the length of the pandemic and the possible bottom of the related economic drop, as well as high volatility of financial markets, and political tensions between the U.S. and China, disrupt capital investments in the immediate term, which is to put a drag on the metal tank market.

In the medium term, should the pandemic outbreak end in the second half of 2020, the economy is to start recovering in 2021 and then return to the gradual growth, driven by the fundamentals that existed before 2020.

Taking into account the above, it is expected that in 2020, the consumption of metal tanks will drop by approx. 6%. In the medium term, as the economy recovers from the effects of the pandemic, the market is expected to grow gradually, with an anticipated CAGR of +0.5% for the period from 2019 to 2030, which is projected to bring the market volume to $8.2B (in fixed 2019 prices) by the end of 2030.

The U.S. Metal Tank Market Remains to a Large Extent Dependent on Imports

In value terms, metal tank production amounted to $7.7B in 2019. Over the period under review, production continues to indicate a perceptible downturn. The U.S. metal tank market remains dependent on imports: over the period under review, the share of imports in terms of total metal tank consumption in the U.S. increased from 12% in 2007 to 17% in 2019 (based on value terms). It means that the U.S. metal tank market remains an attractive destination for foreign manufacturers.

Metal tank imports declined dramatically to $1.3B (IndexBox estimates) in 2019. The total import value increased at an average annual rate of +3.4% from 2013 to 2019; however, the trend pattern indicated some noticeable fluctuations being recorded in certain years.

In value terms, China ($492M) constituted the largest supplier of metal tanks to the U.S., comprising 37% of total imports. The second position in the ranking was occupied by Canada ($181M), with a 14% share of total imports. It was followed by Mexico, with an 11% share.

From 2013 to 2019, the average annual rate of growth in terms of value from China stood at +9.3%. The remaining supplying countries recorded the following average annual rates of imports growth: Canada (+0.2% per year) and Mexico (+9.8% per year).

Companies Mentioned in the Report

Enerfab, Inc., Paul Mueller Company, Caldwell Tanks, Inc., Modern Welding Company, Inc., Flexcon Industries, Inc., Imperial Industries, Inc., Walker Engineered Products, Taylor-Wharton International LLC, CST Industries, Inc., Permian Tank & Manufacturing, Nooter Construction, Inc., Polar Tank Trailer, Mid-State Tank Co., Fort Worth F and D Head Company, James Machine Works LLC, Rocky Mountain Fabrication, Phoenix Fabricators & Erectors, HMT LLC (Pasadena Tank Corporation), Washington Metal Fabricators (WMF), Truenorth Steel,  Arrow Tank and Engineering Co, Helgesen Industries, Mississippi Tank and Manufacturing Company, Alonso & Carus Iron Works, Cimarron Energy, Tankcraft Corporation, Highland Tank & Manufacturing Company, Inc.

Source: IndexBox AI Platform