charting the energy future

ExxonMobil’s Outlook for Energy: A View to 2030 anticipates rising energy demand, improvements in energy efficiency and a role for a wide variety of energy sources.

This article originally appeared in the Lamp, 2007 — Number 4

Continued economic progress, population growth and the pursuit of improved living standards in the developing world will be the key drivers of global energy demand over the next two decades. That is the conclusion of ExxonMobil’s Outlook for Energy: A View to 2030, released in early November.

Developed annually through an ongoing process that the company has conducted over several decades, the Outlook for Energy is used to underpin ExxonMobil’s business planning and to increase public understanding of the world’s energy needs and challenges.

Each year, company representatives share the Outlook with government representatives, industry groups, the financial community, NGOs, community groups and universities across the world. These efforts provide important opportunities for the company to communicate its views on long-term energy trends and challenges, and help stimulate thoughtful, fact-based discussions about major energy issues facing the world in the coming decades.

The Outlook is developed through a detailed analysis of approximately 100 countries, 15 demand sectors and 20 fuel types and is underpinned by economic and population projections, as well as expectations of significant energy efficiency improvements and technology advancements. Fuel types range from traditional fuels such as oil, natural gas and coal, to emerging energy sources such as biofuels, wind and solar. The predictions, which aim to provide a comprehensive assessment of future energy demand and supply trends, are generally consistent with those of other expert forecasters, such as the International Energy Agency and the U.S. Energy Information Administration (EIA).

“The energy challenges faced by the world are undeniable,” said ExxonMobil Chairman and CEO Rex Tillerson, launching the most recent study. “Economic progress will drive energy demand, oil and gas will remain indispensable for the foreseeable future, and a global effort will be required to tackle greenhouse gas emissions. ExxonMobil’s Outlook for Energy provides us with an opportunity to use a common set of data in seeking solutions to the world’s energy challenges. Understanding the energy outlook and thoughtfully examining our options are essential.”

Highlights of the Outlook for Energy

• Annual energy demand growth is expected to average 1.3 percent per year from 2005 to 2030, underpinned by economic growth but mitigated by efficiency improvements.
  
  
• The vast majority of the demand increase will take place in developing countries, where economies and populations are expanding most rapidly and where billions of people require access to growing quantities of energy as they seek better living standards.
  
  
• The power generation sector represents more than 40 percent of the increase in global energy demand, with growth concentrated in developing countries. Demand growth in the transportation sector will slow over time, as improvements in light-duty vehicle fuel economy help offset the impact of a growing fleet.
  
  
• A wide variety of energy sources will be required to meet global demand, which is expected to be one-third higher by 2030 compared to today, reaching close to the daily equivalent of 325 million barrels of oil.
  
  
• Fossil fuels will continue to account for about 80 percent of energy demand through 2030; oil and gas alone will account for approximately 60 percent.
  
  
• Among renewable energy sources, wind, solar and biofuels will grow rapidly at about 9 percent per year, reflecting government subsidies and mandates. These energy sources currently represent about 0.5 percent of world energy, and are expected to reach approximately 2 percent by 2030.
  
  
• Energy efficiency as measured by energy intensity — global energy demand divided by global GDP — has been improving by approximately 1 percent per year since 1980. Improvements are expected to average 1.6 percent per year to 2030, reflecting development and deployment of advanced technologies.
  
  
• On a global basis, energy-related carbon dioxide (CO₂) emissions will increase to an annual level of 37 billion metric tons by 2030, compared to 27 billion metric tons in 2005.
  
  
• Projected growth of emissions of CO₂ from energy use varies in the developed and developing world. Increased reliance on coal and strong growth in all fossil fuel use is expected to increase energy-related CO₂ emissions in the developing world by 2 percent per year. Overall low energy-demand growth combined with a shrinking reliance on coal will keep CO₂ emissions in the developed world almost constant through 2030.
  
  
• Slowing the growth of CO₂ emissions will require global participation, step changes in energy efficiency, technology gains and massive investment over decades. Substantial and cost-effective CO₂ reduction efforts will need to maximize the use of markets and reach broadly across the economy, involving everyone from producers to consumers.