IRVING, TEXAS, December 12, 2013 — According to The Outlook for Energy: A View to 2040, released today and prepared by experts from Exxon Mobil Corporation, during the next quarter of a century, as a result of population growth, increased urbanization and higher living standards, the global demand for energy will increase by more than a third, and meeting it will require the use of all types of energy sources.
“Understanding the trends in the global energy sector is a prerequisite for an effective energy policy,” said Rex W. Tillerson, Chairman of the Board and CEO of Exxon Mobil Corporation. “To develop the economy and support a modern way of life, mankind needs to develop reliable and affordable energy sources.”
In their annual forecast, ExxonMobil’s experts suggest that future energy demand – which is expected to grow by about 35% by 2040 – will be met through the use of more efficient methods of energy conservation and technology, less carbon-intensive energy sources such as natural gas, nuclear energy and renewable energy sources, as well as through further advances in the development of new energy sources. Without more efficient use of energy, growth in global energy demand could reach 100%.
Factors contributing to the growth in energy demand are the increase in population expected during this period (the world’s current population of 7 billion is expected to reach 9 billion by 2040) and the growth of the global economy – by almost 3% per year – mostly in developing countries, where the standard of living is constantly improving and millions of people are being freed from poverty.
In accordance with the Outlook, during the period up until 2040, about 60% of the demand for energy will be met by oil and natural gas. All types of transportation means will still predominantly be using liquid fuels – gasoline, diesel, jet fuel, fuel oil – due to a combination of useful properties such as availability, prevalence, transportability and high energy density.
Meeting the demand for oil, which is expected to increase by 25% (mainly due to more active commercial transportation), will be possible as a result of advances in deep-sea recovery technology, oil sands and the development of hard-to-recover reserves.
The energy source whose importance will continue to see the fastest growth will be natural gas, the demand for which will increase by approximately 65%. According to the forecast, by 2040 gas will meet a quarter of the world’s energy needs and surpass coal as the main raw material for power generation.
There will be a steady increase in the use of nuclear energy, but in connection with the accident at the nuclear power plant in Fukushima, Japan, some countries have limited their plans to develop this type of energy. The most intensive development is expected in the countries of the Asia-Pacific region, where, in 2010, nuclear power accounted for 3% of total energy production, and its contribution is expected to increase to almost 9% by 2040. The use of renewable energy sources, including biomass, hydro and geothermal springs, as well as wind and solar energy and different types of biofuel, will increase by almost 60%. The share of wind and solar energy and biofuels, which was 1% in 2010, could amount to 4% by 2040.
The power industry continues to account for the largest share of the growth in global demand for energy. By 2040, this should increase by more than 50% due to increases in living standards resulting from increased urbanization and rising income levels, which will lead to more intensive consumption of electricity in homes and at production sites on account of the increased use of electronic equipment, different household appliances and other modern conveniences. Growth in the demand for electricity should reach 90%, with most of this coming from developing countries, where 1.3 million people currently have no access to electricity.
The Outlook for Energy prepared by experts from Exxon Mobil Corporation provides an analysis of long-term trends in global energy supply and demand. Its findings are used to make investment decisions underlying the strategy for the company’s operations. This forecast is a result of the study of trends in energy supply and demand in more than 100 countries and 15 industries, such as transport, manufacturing and the power sector. It includes an evaluation of 20 different types of energy that will be available to future customers, taking into account the opportunities provided by future technologies, government measures and cross-border trade flows.
The main conclusions of The Outlook for Energy: A View to 2040 also include the following:
- Market forces and the measures taken by governments will further affect the volume of CO2 emissions associated with the energy industry. By approximately 2030, after decades of growth, the volume of these emissions in countries throughout the world is expected to stabilize and then, by 2040, to gradually decrease despite the constant increase in the total amount of energy resources used.
- New technologies will continue to play an important role in the development of reliable and affordable sources of energy. Significant achievements in technologies for the development of oil and gas fields have provided access to vast new resources, which has already changed the overall picture of energy supply in North America and is contributing to increasing energy supplies to meet growing global needs.
- For most of the period under review, more than half of new supplies of natural gas recovered through the development of unconventional deposits will take place in North America, thus creating a solid foundation for more intensive economic growth throughout the United States, especially in certain industries like energy, chemicals, steel and manufacturing.
Up until 2040, about 65% of the world’s recoverable oil and condensate reserves will be extracted.
By 2040, the number of cars on the world’s roads will approximately double, but fuel demand will stabilize and will then begin to gradually decrease due to a transition to smaller and lighter vehicles and increased fuel economy as a result of technological improvements.
Energy demand in non-OECD countries will rise by about two-thirds, which will in fact represent growth in global energy demand.
In the chemical industry, energy demand should rise by about 55%, which is 35% growth throughout all industries. Energy will mainly be needed to create feedstock for manufacturing a variety of products. Demand for oil will grow more slowly, as it will be constrained by improvements in the efficiency of its use.
Oil and gas are the energy sources most widely traded in the market. Meeting the growing demand for energy sources requires the stable functioning of global energy markets.
The volume of natural gas traded in the market in 2040 will be two and a half times the volume traded in 2010, mainly due to liquefied natural gas (LNG).
More information on The Outlook for Energy prepared by ExxonMobil’s experts can be found on the website www.exxonmobil.com/energyoutlook.
Cautionary Statement: The Outlook for Energy: A View to 2040 and this press release include forward-looking statements. Actual future conditions (including economic conditions and economic growth, increases in energy demand and the composition of energy sources, future sources of energy supply, ways to improve energy efficiency, the impact of technologies, and the amount of carbon dioxide emissions) can significantly differ due to changes in the structure of supply and demand, as well as in market conditions reflected in the prices of oil, gas and other energy resources, with changes in laws and government regulations and other political events, changes in technology, competitors’ actions, the development of new sources of supply, demographic changes and other factors are discussed in The Outlook for Energy: A View to 2040 and on the Investors’ page on our website, www.exxonmobil.com, under the section “Factors Affecting Future Results”. Also see para. 1 of ExxonMobil’s last report in Form 10-K.
ExxonMobil, the world’s largest oil and gas company, whose shares are freely traded in open securities markets, uses the latest advances and innovations in science and technology to ensure that the world’s growing demand for energy is met. ExxonMobil has the largest hydrocarbon reserves in the industry, is the largest oil-refining and petroleum product marketing company; the company’s division producing petrochemicals is one of the biggest in the world. Follow ExxonMobil at www.twitter.com/exxonmobil.