A 100 cfm compressor with a refrigeration drier, operating for 4000 hours in a temperate climate, can produce about 2200 USgal of liquid condensate in a year! Failure to remove this moisture can result in condensation in the compressed air piping which leads to corrosion, and damage to pneumatic tools and instruments and early failure. In hot and humid environments it can even be more of a problem as hot environmental air can hold more moisture.
Water vapor will condense as it continues to cool travelling through the system as the temperature falls below the dew point. Condensed water can wash away the pre-lubricants on cylinders and valves, and even damage the end product, especially in blow off applications.
As compressed air exists a compressor, normally water is removed by first an aftercooler, then into a moisture spearator where much of the water condenses out, then though filters that remove loose moisture. The compressed air which still contains water vapor then travels into a drier to remove this vapor before going into a dry receiver to be drawn upon by the system. Driers range from a refrigerant type which lowers dew point to about 35 degrees F, and desiccant type that lowers the dew point to around minus 40 F. typically but can be made to lower it to minus 100F. Depending on the application and factory environment the appropriate drier type is selected. A viable argument can be made that desiccant type would be most appropriate since the compressed air with a dew point of 40 degrees F or lower would not be as corrosive to a system with a higher dew point – at least in a perfect system.
A perfect compressed air delivery system presumes that no outside air can get into it. However in reality there is rarely a perfect system and it is possible that humid air from outside the compressed air delivery system can get into the system so additional filtration at the point of use is utilized. If the delivery system is complex, there may be areas with moisture that was not or cannot be completely removed. Other reasons for air is having areas in the system where the air falls below the dew point causing condensation. Any number of reasons due to the type of equipment in the system, may allow moisture into the system. Some compressed air delivery systems are built up by expanding onto older systems and condensation problems previously not there, can result.
So it can be difficult to avoid the need for point of use filtration.
(As a side note, Nex Flow Air has a rather unique filter called a Super Separator to address serious water/oil removal problems at point of use. If of interest please contact at firstname.lastname@example.org )