In its 2015 Outlook for Energy: a view to 2040, released this morning, the US oil major forecast natural gas to be the fastest-growing fuel until at least 2040 with a 65% demand increase, half of which will come from Asia Pacific, led by China.
Utilities and industrial operations were expected to account for about 80% of the demand increase worldwide, ExxonMobil said, as operators increasingly chose natural gas due to its lower emissions and versatility as a fuel and feedstock.
ExxonMobil forecasts gas to account for more than a quarter of the world’s energy mix by 2040, surpassing coal in the overall mix.
Australia is also set to be a major player in ExxonMobil’s forecast. Rising natural gas demand would be met with abundant new supplies and expansion in trade as unconventional gas production nearly quadruples and LNG trade triples by 2040.
“The global middle class is expected to climb from about 2 billion in 2010 to almost 5 billion people by 2030, representing more than half of the world’s population, according to the Brookings Institution,” the report said.
“As projected, that middle class expansion – largely in India and China – will be the largest in history and will have a profound impact on energy demand. Along with income gains, on-going societal changes such as expanded infrastructure, electrification and urbanisation will contribute to greater energy use.”
And in a positive sign amid the current oil price slump, ExxonMobil also forecasts oil to remain the top energy source, with demand to increase by nearly 30% to 2040, driven by expanding needs for transportation and chemicals.
“By 2040, abundant sources other than conventional crude and condensate will account for about 45% of global liquids production, compared with less than 25% in 2010,” ExxonMobil said.
“Remarkably, estimates of remaining recoverable crude and condensate relative to current demand have risen from about 60 years in 1981 to about 150 years as of 2013.”
All this sits within a wider context of significant growth in global middle class, expansion of emerging economies and an additional 2 billion people in the world will contribute to a 35% increase in energy demand by 2040, ExxonMobil forecast.
The outlook was developed by examining energy supply and demand trends in 100 countries, 15 demand sectors covering all manner of personal and business needs and 20 different energy types.
ExxonMobil’s Outlook for Energy projects that carbon-based fuels will continue to meet about three quarters of global energy needs through 2040 – consistent with all credible projections, including those made by the International Energy Agency.
“The outlook shows a shift toward lower-carbon fuels in the coming decades that, in combination with efficiency gains, will lead to a gradual decline in energy-related carbon dioxide emissions,” ExxonMobil said.
With carbon considerations driving the rapid growth of gas ahead of coal, ExxonMobil said the OECD would lead efforts to curb carbon dioxide emissions through 2040 as energy demand declines and a shift to lower-carbon fuels occurs.
“Energy-related carbon dioxide emissions in those countries are projected to be about 10% below 1980 levels, even though they will have about 40% more people and significantly larger economies.
“Across OECD nations, the outlook assumes the implied cost of policies to reduce greenhouse gas emissions will reach about $80 per tonne in 2040.”
However, while non-OECD countries would represent 70% of global energy demand by 2040, ExxonMobil said energy demand per person in those nations would remain well below OECD levels.
