ExxonMobil: Energy demand to increase on growing middle class
Significant growth in the global middle class, expansion of emerging economies and an additional 2 billion people in the world will contribute to a 35 percent increase in energy demand by 2040, according to a new report released yesterday by ExxonMobil.
As demand increases, the world will continue to become more efficient in its energy use, according to the 2015 Outlook for Energy: A View to 2040. Without efficiency gains across economies worldwide, energy demand from 2010 to 2040 would be headed toward a 140 percent increase instead of the 35 percent forecast in the report.
“Carbon-based fuels will continue to meet about three quarters of global energy needs through 2040”
ExxonMobil’s Outlook for Energy projects that carbon-based fuels will continue to meet about three quarters of global energy needs through 2040, which is 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.
Wind, solar and biofuels are expected to be the fastest-growing energy sources, increasing about 6 percent a year on average through 2040, when they will be approaching 4 percent of global energy demand. Renewables in total will account for about 15 percent of energy demand in 2040. Nuclear energy, one of the fastest-growing energy sources, is expected to nearly double from 2010 to 2040, with growth in the Asia Pacific region, led by China, accounting for about 75 percent of the increase.
“This research offers important perspective about the factors that will drive the world’s energy needs in the coming decades,” said Rex W. Tillerson, chairman and chief executive officer of Exxon Mobil Corporation. “Helping individuals, businesses and governments to better understand the elements that shape future energy supply and demand around the world is essential to aid investments and create effective energy policy.”
“Wind, solar and biofuels are expected to be the fastest-growing energy sources, increasing about 6 percent a year on average through 2040”
The Outlook for Energy provides ExxonMobil’s long-term view of global energy demand and supply. Its findings, ExxonMobil says, help guide the company’s investments, which support its business strategy. The outlook is 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.
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. 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 urbanization will contribute to greater energy use.
“The global middle class is expected to climb from about 2 billion in 2010 to almost 5 billion people by 2030”
The Outlook for Energy identifies a significant evolution in the trade of oil and other liquids. A major shift is seen as North America will likely become a net exporter of liquids by 2020 as supplies of so-called tight oil, natural gas liquids and bitumen from oil sands increase. This is expected to open new trading opportunities as Asia Pacific’s net imports are projected to rise by nearly 80 percent by 2040. Africa’s liquids exports are expected to decline as local demand more than doubles. In Latin America, growth in supplies is anticipated to outpace demand as supplies of deepwater and unconventional liquids expand.
“North America will likely become a net exporter of liquids by 2020”
North America unconventional gas production will nearly triple by 2040 and the region is expected to surpass the combined output of Russia and the Caspian region as the largest gas-producing area. In Asia Pacific, gas production is seen doubling by 2040, driven partly by unconventional production technologies. Demand in the region is expected to climb by about 170 percent, according to the outlook, and as a result, Asia Pacific will likely overtake Europe as the world’s largest gas importer.
“Natural gas is expected to be the fastest-growing major fuel source”
Natural gas is expected to be the fastest-growing major fuel source during the outlook period as demand increases by about 65 percent. Half of that increase will come from the Asia Pacific region, led by China. Utilities and industrial operations are expected to account for about 80 percent of the demand increase worldwide, as operators increasingly choose natural gas because of its lower emissions and versatility as a fuel and feedstock. By 2040, natural gas is expected to account for more than a quarter of global energy use, surpassing coal in the overall mix.
Demand for coal is expected to rise through 2025 and then decline as China’s economic growth gradually slows and it follows the shift seen in Organisation for Economic Co-operation and Development (OECD) countries toward cleaner fuels. Still, over time, global coal demand is expected to remain most prominent in Asia Pacific, primarily to support growing power-generation requirements.