NEWS RELEASE                                                                                                                JUNE 2014

Unconventional Oil and Gas Will Cause Valve Sales to Be $3 Billion Higher In 2015

The sale of industrial valves in 2015 will increase to $69 billion worldwide.  Much of the growth will be attributable to unconventional oil and gas.


$   Billions

%   Difference


Valve   sales 2014 w/o inflation



Based   on 2010 dollars

Valve   sales 2014  actual revenues



2014   actual revenues  reflecting year over year inflation

Valve   sales 2015  with inflation and conventional   oil and gas assuming no unconventional



Increase   over 2014 assuming the same amount of oil and gas was extracted but by   conventional methods. Real growth would have only been 0.7% and   inflation 4%

Valve   sales in 2015 with the original share for unconventional oil and gas



Reflects   3% real growth and 4% inflation

Valve   sales 2015 with inflation and non conventional oil and gas (new projection)



Increase   over 2014 with 5.5% real growth and 4% inflation

McIlvaine displays hundreds of thousands of revenue forecasts in Industrial Valves: World Market.  All of these figures are displayed in 2010 dollars so that viewers can determine the real industry growth without regard to inflation. The 2014 forecast is for valve revenues of $57 billion.  When this is adjusted for inflation, sales will be $63 billion in actual dollars.  Until recently, McIlvaine had forecast 2015 sales of $67 billion of which $1 billion was due to unconventional oil and gas.  However, the forecast is being revised to reflect a 9.5 percent increase and valve sales of $69 billion. This is due to the extensive investment in unconventional oil and gas.  Therefore, unconventional oil and gas will generate revenues of $3 billion in 2015.

One of the main drivers in the revision of the numbers is the huge coal-to-gas and chemicals program underway in China.  This program is already generating larger process equipment plant investments than the shale gas activities in the U.S.   By 2025, with 40 projects in the planning stage, the Chinese coal-to-gas production could reach a level of 40 percent of the entire present U.S. consumption.  The goal is to transport this gas by pipeline from the West and North to the large cities in the East.  This is one of the most important initiatives for reducing air pollution in the large cities.  The clean burning gas will replace coal.  Also the investment in U.S. petrochemical plants which will be using gas as a feedstock will be outstripped by the Chinese investment in coal to petrochemicals.  Another massive program is coal-to-liquid fuels. High quality motor fuels can be produced from coal using both indirect and direct liquefaction. China is making massive investments in both technologies.

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