More-efficient, energy-saving programs and technologies, increased use of natural gas and other less carbon-intensive fuels, and continued development of advanced exploration and production technologies will support a 35% increase in global energy production by 2040, ExxonMobil Corp. said in its latest annual outlook.
Governments also likely will establish policies that effectively put a price on carbon emissions, William M. Colton, ExxonMobil’s vice-president of corporate strategic planning, said as the company released the forecast at the Center for Strategic and International Studies.
“We’re not saying there will be a carbon tax,” he emphasized. “Although climate policies remain uncertain, we expect governments to try to limit emissions and assign a cost to carbon through their policies.”
Market forces and emerging public policies will continue to have an impact on energy-related carbon dioxide emissions, the forecast said. After decades of growth, it said, worldwide energy-related CO2 emissions are expected to plateau around 2030 before gradually declining toward 2040 despite a steady rise in overall energy use.
Oil and gas will continue to meet about 60% of all energy needs by 2040, the outlook projected. Liquid fuels—gasoline, diesel, jet fuel, and fuel oil—will remain the primary transportation choice because of their unique combination of affordability, availability, portability, and high energy density, it said.
Crude oil demand is expended to increase 25%, led by increased commercial transportation activity, the forecast said. It will be met through technology advances that enable deepwater production and development of oil sands and tight oil, it indicated.
Strong gas growth
Natural gas will remain the fastest-growing major fuel source as demand increases by about 65%, according to the outlook. “In North America, [its] abundance is leading to a resurgence of chemical as well as manufacturing industries,” Colton said. “The world has over 200 years of gas supplies.”
Unconventional gas now accounts for 40% of the world’s resource base, and is expected to represent 65% of global gas production growth to 2040, led by North America, he said.
Practically all of the projected demand growth will occur in developing nations attempting to industrialize as already industrialized countries emphasize efficiency, the outlook said. “The greatest source for the energy future is learning how to use it more efficiently,” Colton said.
He said the forecast also reflects the company’s support for free trade. “That sometimes gets lost in the discussion,” he observed. “Whenever you try to expand it, protection concerns begin to come out, but they are usually overshadowed. We hope there will be very robust trade in both crude and products, as well as gas.”
Cohen said the abundant US gas resources give the country a considerable export price advantage, even with high liquefaction and transportation costs, for sales to Pacific customers.
“The LNG world is very competitive,” he observed. “There are a lot of Asian customers, but there also are a lot of producers. If we don’t move ahead with our own export projects, others are ready to fill the gap and move ahead with theirs.”
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