10 Things: Exxon's energy outlook
HOUSTON — The world’s energy markets will change dramatically in around 2020, when North America shifts from a major energy importer to an important fuel source for the world’s middle class, according to Exxon Mobil Corp.’s annual energy forecast.
The Irving, Texas-based company’s report predicted that global energy demand would by grow 35 percent through 2040, driven by 2 billion new people and the rise of an energy-hungry middle class in developing countries. The report also outlined how supply growth in North America and global efficiency gains, would be critical to meeting the future’s energy needs.
Exxon’s vision of the future was mostly unchanged from the previous year’s forecast despite a recent drop in oil prices. That drop has removed about 35 percent of the value of a barrel of oil and appears to be leading to an at least short-term curtailment of U.S. oil production growth. Executives at Exxon did not discuss oil prices in the Tuesday presentation.
Exxon predicted that long-term demand would rise significantly as consumers in developing nations began to close the gap with peers in more developed countries. Energy demand in the more developed countries included in the Organisation for Economic Co-operation and Development is expected to remain flat or fall slightly.
“The demand for energy continues to be driven by two things: people and progress,” said Bill Colton, a planning executive at Exxon. ”Billions of people in these emerging markets are going to rise into the middle class, propelling a nearly 70 percent increase in their energy demand.”
The increasing demand will be fed by production gains in a number of areas, most dramatically North America. Efficiency gains will also play an important role in mitigating the amount of fuel needed to run the world, Exxon said.
North America is expected to become a net exporter of liquids by 2020 as production from tight oil, natural gas liquids and oil sands grows.
Much of this oil could be shipped abroad as the Asia and Pacific region sees demand for liquids grow quickly. Exxon’s predictions show the Asia Pacific region’s net imports rising by nearly 80 percent through 2040.
North America is also expected to see strong gains in natural gas production as the fuel becomes more important to the global economy. Unconventional gas production in the region is expected to triple by 2040 and North America is expected to become the largest gas-producing region in the world.
This gas will increasingly be needed to meet the growing demand in Asia, where demand is expected to climb by about 170 percent. The mismatches between producing and consuming regions will fuel a large, international natural gas trade, Exxon said.
“By 2040, more than 50 percent of the world’s natural gas demand will be met by LNG shipments or inter-regional pipelines,” Colton said.
The switch toward natural gas — which Exxon projects will eclipse coal as a fuel source and account for more than a quarter of global energy use by 2040 — will also help global carbon dioxide emissions peak in 2030 before beginning to decline.
Exxon expects developed countries will see emissions fall by around 25 percent while emerging markets will see emissions rise by as much as 50 percent through 2040. Emissions per person are projected to remain much higher in developed countries.
Exxon also projected that sources of renewable energy are expected to grow quickly through 2040 but will remain a small provider of total energy. Solar energy is expected to be the fastest-growing source of energy with an annual average growth rate of 5.8 percent, compared to coal’s annual average growth of only 0.1 percent. But by Exxon’s figures, renewable sources of energy remain a small player in the industry.
“Renewables will continue to be challenged both by their high costs and the fact that they can’t produce energy on demand,” Colton said.
After the presentation, Exxon’s executives briefly addressed a new analysis by researchers at the University of Texas at Austin suggesting that estimates of U.S. shale reserves and ultimate production capacity might be overstated.
The company said it is confident in its strong reserve estimates and high production figures.
http://fuelfix.com/blog/2014/12/09/exxon-sees-abundant-oil-gas-far-into-future/ |
