The world will require all forms of energy over the next quarter century to meet a greater than one-third increase in demand that will be driven by population growth, improved living standards and expanded urbanization, according to ExxonMobil’s Outlook for Energy: A View to 2040.
“Understanding global energy trends is absolutely critical for effective energy policy,” said Rex W. Tillerson, chairman and chief executive officer of Exxon Mobil Corporation. “The world depends on safe, reliable and affordable energy development to support economic growth and our modern way of life.”
In its annual forecast, ExxonMobil projects that future energy needs – expected to be about 35 percent higher in 2040 than 2010 – will be supported by more efficient energy-saving practices and technologies, increased use of less-carbon-intensive fuels such as natural gas, nuclear and renewables as well as the continued development of technology advances to develop new energy sources. Without gains in efficiency, global energy demand could have risen by more than 100 percent.
Driving increased energy demand is anticipated population growth that will reach nearly 9 billion in 2040 from about 7 billion today, and a projected doubling of the global economy – at an annual growth rate of nearly 3 percent – largely in the developing world where rising living standards will continue to lift millions of people out of poverty.
The outlook projects that oil and natural gas will continue to meet about 60 percent of energy needs by 2040. Liquid fuels – gasoline, diesel, jet fuel and fuel oil – will remain the energy of choice for most types of transportation because they offer a unique combination of affordability, availability, portability and high energy density.
An expected 25 percent increase in demand for oil, led by increased commercial transportation activity, will be met through technology advances that enable deep-water production and development of oil sands and tight oil.
Natural gas will continue to be the fastest-growing major fuel source as demand increases by about 65 percent. Natural gas is projected to account for more than one quarter of all global energy needs by 2040 and it is expected to overtake coal as the largest source of electricity.
Nuclear energy will see solid growth despite some countries scaling back their nuclear expansion plans following the 2011 Fukushima incident in Japan. Growth will be led by the Asia Pacific region, where nuclear output is projected to increase from 3 percent of total energy in 2010 to nearly 9 percent by 2040. Renewable energy supplies – including traditional biomass, hydro and geothermal as well as wind, solar and biofuels – will grow by nearly 60 percent. Wind, solar and biofuels are likely to make up about 4 percent of energy supplies in 2040, up from 1 percent in 2010.
Energy used for power generation will continue to be the largest component of global demand and is expected to grow by more than 50 percent by 2040 as improved living standards that come with urbanization and rising incomes lead to increased household and industrial electricity consumption through wider penetration of electronics, appliances and other modern conveniences. The growth reflects an expected 90 percent increase in electricity use, led by developing countries where 1.3 billion people are currently without access to electricity.
The Outlook for Energy is ExxonMobil’s long-term global view of energy demand and supply and its findings help guide investments that underpin the company’s business strategy. The outlook is developed by examining energy supply and demand trends in more than 100 countries and 15 demand sectors, such as transportation, industrial and power generation. Twenty different types of energy that will be available to future consumers are evaluated while taking into account assessments of future technologies, government policies and cross-border trade flows.
Other key findings from the 2014 Outlook for Energy include:
- Market forces and emerging public policies will continue to have an impact on energy-related carbon dioxide emissions. After decades of growth, worldwide energy-related carbon dioxide emissions are expected to plateau around 2030 before gradually declining toward 2040, despite a steady rise in overall energy use.
- New technologies will continue to play an important role in development of reliable and affordable energy. Significant advancements in oil and natural gas technologies have safely unlocked vast new supplies, already changing the energy landscape in North America and expanding supplies to help meet growing global energy demand.
- Through most of the outlook period, more than half of the growth in unconventional natural gas supply will be in North America, providing a strong foundation for increased economic growth across the United States, and most notably in industries such as energy, chemicals, steel and manufacturing.
- About 65 percent of the world’s recoverable crude and condensate resource will have yet to be produced by 2040.
- The number of cars on the road worldwide is expected to approximately double by 2040, but fuel demand will plateau and gradually decline as consumers turn to smaller, lighter vehicles and technologies improve fuel economy.
- Demand for energy in non-OECD nations will grow by about two thirds, accounting for essentially all of the increase in global energy use.
- Global chemicals energy demand is expected to rise by about 55 percent from 2010 to 2040 and will account for 35 percent of the growth in the industrial sector. Most of the energy demand growth in the chemicals sector will be for the feedstocks to make the building blocks for a wide range of essential products. Fuel demand will grow more slowly as improvements to efficiency reduce demand growth.
- Oil and natural gas are the most widely traded energy sources and maintaining a robust global energy marketplace will remain critical to meeting rising energy demand.
- Traded volumes of natural gas in 2040 are expected to be two-and-a-half times the 2010 level, with most of this growth coming from liquefied natural gas.
LNG World News Staff, December 13, 2013; Image: ExxonMobil