Natural gas from shale and other unconventional sources will account for 30% of worldwide gas production by 2040, ExxonMobil Corp. said in its 2012 energy outlook. It projected a 30% increase in global energy demand from 2010 levels, but added that growth would be more than four times that amount without expected gains in efficiency.
It expected oil, gas, and coal to provide 80% of the world’s energy in 2040, but anticipates gas’s share growing as coal’s declines. “Gas continues to be the growing fuel of choice,” said William M. Colton, ExxonMobil’s vice-president for corporate strategic planning, as the company released its first forecast to 2040 at the Center for Strategic and International Studies. “This is possible because of the growing global resource—about 250 years of current demand.”
While crude oil will remain the most widely used fuel, ExxonMobil said it expected overall energy demand to be reshaped by a continued move toward less carbon-intensive sources, including gas, as well as steep energy improvements in areas such as transportation, where the expanded use of hybrid vehicles will help push average new-car fuel economy to nearly 50 mpg by 2040.
Hybrids could rise to 50% of the total personal transportation fleet from their current 1% share, Colton suggested. “They make more sense for consumers than electric vehicles because they have the convenience and affordability of petroleum liquid fuels combined with electricity’s efficiency,” he explained.
The outlook projected liquid petroleum-based fuels would remain dominant in transportation, fueling about 90% of total vehicles, vessels, and aircraft because their energy is so concentrated and they are relatively affordable. Commercial transportation will be the primary driver as demand increases more than 70% in response to economic growth, particularly in developing nations, it said. ExxonMobil expects light duty vehicles’ fuel demand to level off in 2015 as they become more efficient and motorists drive shorter distances.
Fuel sources diversify
Petroleum liquid fuels will continue to diversify as global demand reaches 112 million b/d by 2040, the forecast indicated. “Deepwater production is expected to more than double and provide about 10% of total global liquid fuels,” Colton said.
Only about 60% will come from conventional oil production, with the rest coming from oil sands, tight oil formations, natural gas liquids, and biofuels, he said. “As new fuels join the world mix, they take time to evolve and grow,” Colton observed. “Sources of fuel can only change very slowly over time. But changes are taking place.”
The outlook said while oil production will continue to increase, 55% of the world’s resources will still be unproduced in 2040. Colton said estimates have grown from 1 trillion bbl in the 1950s to more than 5 trillion bbl today as exploration and recovery technology has steadily improved. “I think we’re in the early days of estimating tight oil resources,” he said. “Ours is on the conservative side. We won’t know until we get out there and start developing them.”
ExxonMobil expects Saudi Arabia, Russia, and the US to remain the world’s top three oil producers in 2040 as production elsewhere increases, such as from Brazil’s deepwater areas, or declines. “The good news is that US oil imports appear to have peaked with growing supplies from Canada’s oil sands,” Colton said. “By 2040, combined US-Canadian production could reduce the two countries’ imports to near zero—around 1 million b/d.”
Government policies will play a key role, added Kenneth P. Cohen, ExxonMobil’s vice-president of policy and government affairs. “Decisions involving tight shale gas production and construction of the Keystone Xl pipeline are recent examples,” he said. “We have the resources. What’s uncertain is the extent to which they will be produced.”
Contact Nick Snow at firstname.lastname@example.org.