OIL and natural gas will continue to supply some 55 percent of the world's energy needs. This is one of the key findings from ExxonMobil's 2018 Energy Outlook which has already predicted demand for natural gas to hit 445 billion cubic feet per day in the next 22 years.
The American oil giant which is operating in the Niger Delta axis of Nigeria in the report pointed out that in 2040 oil will continue to provide the largest share of the energy mix with demand rising about 20% driven by commercial transportation and chemicals.
Their second key findings is that nuclear and renewable energy sources are likely to account for nearly 40% of the growth in global energy demand to 2040. Third, that the share of the world’s electricity generated by coal is expected to fall to less than 30% in 2040 from approximately 40% in 2016.
The fourth key point has to do with increasing electrification of light-duty vehicles which is anticipated to grow strongly. In total, full hybrid, plug-in hybrid, and electric-only vehicles will be approaching 40% of global light-duty vehicle sales in 2040, compared to about 3% in 2016.
Analysts, however, say apart from increased electricity demand in the future, clean air is vital. About seven million people die prematurely each year as a result of air pollution, many of these either from industrial sources such as power generation or from indoor air pollution which could be averted by electricity use.
The World Health Organisation (WHO) said that low- and middle-income countries in the WHO South-East Asia and Western Pacific regions had the largest air pollution-related burden in 2012, with a total of 3.3 million deaths linked to indoor air pollution and 2.6 million deaths related to outdoor air pollution. Worldwide, WHO estimates indoor air pollution was linked to 4.3 million deaths in 2012 in households cooking over coal, wood and biomass stoves.
On electricity outlook, with the United Nations predicting world population growth from 7.3 billion today to 9.2 billion by 2040, demand for energy must increase substantially over that period. Both population growth and increasing standards of living for many people in developing countries like Nigeria will cause strong growth in energy demand.
Over 70% of the increased energy demand is from developing countries, led by China and India. China has already overtaken the US as the world’s largest energy consumer, and by 2040 it is expected to use nearly twice as much energy as the US. Superimposed on this, the UN Population Division projects an ongoing trend of urbanisation, from 52% in 2011 to 62% in 2035 and reaching 70% worldwide by 2050, enabling world population to stabilize at about 9 billion with a better food supply, clean water, sanitation, health, education and communication facilities.
In the meantime, the report highlights ExxonMobil’s analysis of 2 degree Celsius (2oC) scenarios and include sensitivity analyses on electric vehicle penetration and renewables deployment. They are in response to a 2017 shareholder resolution seeking additional climate disclosures about the impacts of technology advances and global climate change policies on the company.
The Energy & Carbon Summary and a new special section in the annual Outlook for Energy include consideration of the impact on future energy demand from an analysis of multiple lower-carbon scenarios published by the Stanford University Energy Modelling Forum. The forum’s scenarios are publicly available and are used for analytical purposes, including by the UN’s Intergovernmental Panel on Climate Change.
The global scenarios assessed by ExxonMobil, which include a full range of energy technologies, contemplate limiting global greenhouse gas (GHG) emissions to have a likely chance of holding atmospheric concentrations to the equivalent of 450 parts per million CO2 in 2100; these scenarios are generally considered to be consistent with pathways that would limit global average temperature rise in 2100 to 2oC above pre-industrial levels.
The oil corporation’s analysis of these 2oC scenarios examined the mean of the annual average demand growth rates of the various model outputs between 2010 and 2040 for multiple sources of energy. This analysis of these 2oC scenarios indicates: total energy demand increases about 0.5% per year; oil demand decreases about 0.4% per year; natural gas demand increases about 0.9% per year; coal demand decreases about 2.4% per year, and renewables demand increases about 4.5% per year.
All energy sources remain important across the assessed 2oC scenarios to 2040. As a result of ongoing demand coupled with natural hydrocarbon field decline, trillions of dollars of additional investment in oil and gas production will be required, including to meet a 2oC pathway. Based on the average growth rates of assessed 2oC scenarios, natural gas demand is estimated to increase to 445 billion cubic feet per day by 2040; oil demand is estimated to decline to 78 million barrels per day by 2040.
''Our job is to supply the energy the world needs in an environmentally responsible way'', the Chairman and Chief Executive of ExxonMobil Corporation, Darren W Woods said, adding ''it is a dual challenge – we need to meet society’s growing need for energy while addressing the risks of climate change. We are committed to being part of the solution by investing in new technologies that can provide economic solutions on a globally scalable basis.''
Many experts agree that advancements will be needed to reach and maintain a 2oC pathway through 2100. ExxonMobil has invested billions of dollars in R&D, including multiple universities and business partnerships around the globe, aimed at achieving the technical breakthroughs required.
Continuing, Woods said, ''since 2000, our investments to develop lower-emission energy solutions have totalled about $8.00 billion. We are deploying technologies such as cogeneration and carbon capture and storage while researching next-generation solutions such as algae biofuels and advanced carbon capture using fuel cells. Continued research will be critical.''
With growing global populations and economies, key levers to address the risks of climate change include further energy efficiency improvements and reducing the greenhouse gas (GHG) intensity of the world’s energy system. ''For our part, we continue to take action to mitigate our emissions and help consumers lessen their GHG impact'', he said.
ExxonMobil’s ‘Outlook for Energy: A View to 2040’ describes a rapidly growing global population and rise in living standards in developing countries that will drive a growth in worldwide energy demand of about 25% from 2016 to 2040. At the same time, energy efficiency gains and gradual reductions in the GHG intensity of the energy system will help to moderate energy use and reduce by nearly 45% the carbon intensity of the global economy, according to the report.
Emerging economies in countries that are not part of the Organisation for Economic Co-operation and Development (OECD) will account for essentially all energy demand growth, led by an expanding Asia-Pacific region. As prosperity rises, electrification continues as a significant global trend. Energy demand for power generation accounts for about 50% of global demand growth, with much of that coming from non-OECD countries.
For the oil corporation's Vice President in charge of Corporate Strategic Planning, T. J. Wojnar, ''natural gas use is likely to increase more than any other energy source, around 40%, with about half its growth for electricity generation.The abundance and versatility of natural gas, in addition to its significant air quality benefits, make it a valuable energy source to meet a wide variety of needs, while also helping the world to shift to a less carbon-intensive source of energy.''
Among the most rapidly expanding energy supplies will be electricity from solar and wind, together with growing about 400%.
While energy demand will grow, global CO2 emissions are likely to peak by 2040, at about 10% above 2016 levels, as energy sources shift toward lower-emission fuels such as natural gas, renewables, and nuclear.
The Outlook predicts a rise in electric vehicles as well as efficiency improvements in conventional engines. This will likely lead to a peak in liquid fuels use by the world’s light-duty vehicle fleet by 2030. However, oil will continue to play a leading role in the world’s energy mix.
According to Wojnar, ''our in-depth analysis shows that even if every light-duty vehicle in the world was fully electric by 2040, the demand for liquids could still be similar to levels seen in 2013. This is because of growing demand from commercial transportation and the chemical sector.''
The Outlook for Energy is ExxonMobil’s long-range forecast developed through data-driven analysis, reflecting broad knowledge of energy markets and the expertise of economists, engineers, and scientists. It examines energy supply and demand trends for approximately 100 regional/country areas, 15 demand sectors and 20 different energy types. The oil company uses the forecast as a foundation for its business strategies and to help guide multi-billion dollar investment decisions.