ExxonMobil has released its annual long-term energy outlook, projecting global energy needs and supplies out to 2040. Some highlights:
- Demand in developing nations will rise 65 percent by 2040 compared to 2010, nearly double the rate of overall demand growth for the globe (35 percent).
- Electricity demand will account for more than half of the increase in overall global energy demand. The world will need 85 percent more electricity in 2040 than it used in 2010.
- As economies expand, transportation sector energy demand is expected to increase by more than 40 percent from 2010 to 2040 – led by a 65 percent increase in demand from heavy-duty transportation.
On the supply side:
- Oil and natural gas will supply about 60 percent of global energy demand in 2040, up from 55 percent in 2010. (That mirrors last week’s U.S. Energy Information Administration projection that oil and gas will supply 60 percent of the energy the U.S. uses in 2040.)
- New technologies will be central to developing additional liquid supplies to meet rising demand – building on successes in deepwater drilling and in oil sands development.
- By 2040 close to 80 percent of North American natural gas supplies will be produced from local unconventional sources (fracking). Globally, about 60 percent of the growth in natural gas supply will be from unconventional sources (from hydraulic fracturing).
- By 2040 only about 55 percent of the world’s liquid supply will come from conventional crude oil production. The rest will be deepwater, tight oil (again, fracking) and natural gas liquids – as well as oil sands and biofuels (see liquids supply chart below).
The forecast depicts this energy reality: The world’s economies and modern standards of living run on oil and natural gas and will continue to do so into the foreseeable future – with the help of new technologies that make them available and affordable on a global scale. This is especially true for unconventional oil and natural gas (fracking) –natural gas use ExxonMobil predicts will play a prominent role in lowering CO2 emissions in OECD countries by 20 percent by 2040 compared to 2010.
The report predicts a global “ability to significantly expand prosperity with relatively modest growth in demand” because of greater energy efficiency:
"In all countries, modern technologies, fuels and energy management practices replace less efficient ones. Building and manufacturing processes use less energy, the cars we drive are more fuel-efficient and more natural gas is used for electricity generation. All of this combines to slow energy demand growth in comparison to gains in economic growth and living standards."
It’s a good-news forecast for the United States, which has plentiful reserves of oil and natural gas (again, see EIA’s forecast), especially from unconventional sources (have we mentioned fracking?) – so that the U.S. could be a natural gas exporter by 2020, the company says. The unanswered question is whether we’ll get the policies and the leadership needed to safely and responsibly develop our energy wealth. These include access to new oil and natural gas reserves, onshore and offshore, a common-sense approach to regulation and fostering a pro-growth energy investment climate – part of which includes rejecting tax increases that could chill investment, job creation and energy development.
Addressing the notion of raising taxes on America’s oil and gas companies, ExxonMobil’s Kenneth P. Cohen suggested a better idea: “Put our industry to work.” With the right policies we can see more energy developed, more jobs created and far more revenue generated for government.