Soon after a spate of stories about annual energy forecasts appeared, a reader e-mailed OGJ with a simple question: With all this optimism about production growth from shales and deep water, when will the world run out of oil?
Economists usually explain that a wide range of variables will determine when that happens. Many mention historic instances where discoveries and technology increased production, and gave new life to an industry that seemingly had been in decline. Whether the potential is realized depends now on politics and its effect on policies, they say.
But one variable that two multinational oil companies' forecasts mentioned more prominently than ever is the growing impact of rising energy efficiency.
Increasing globalization and competition will continue to deliver a remarkable convergence in energy intensity—a measurement of the amount of energy used per unit of economic output—worldwide through 2030, BP PLC Chief Economist Chistoph Rule suggested on Jan. 30.
"We will see an increasing convergence of energy intensity in countries around the world," he said during a presentation at the Center for Strategic and International Studies. "It tends to go up as countries industrialize and falls as more workers move into services. Since the late 1980s, energy intensity has come down rapidly around the world—a reflection of globalization—as more fuels are traded worldwide.
Energy intensity grows as countries industrialize, which most forecasts predict for the developing economies, and falls as the emphasis moves to efficiency once manufacturing is in place, he explained.
'Openness and exchange'
"We have the lowest level of energy intensity and the highest level of energy efficiency since the 1820s, and the smallest differences across countries," Rule said. "We expect this trend of openness and exchange to continue in the next 20 years."
ExxonMobil Corp., when it issued its forecast to 2040 on Dec. 8, 2011, said it expects demand for personal vehicles to plateau by then. "They'll have much greater fuel economy than we have today, and they will generally be driven shorter distances," William M. Colton, ExxonMobil's vice-president for corporate strategic planning, explained during another presentation at CSIS.
Hybrids could represent 40% of the total vehicle fleet, he suggested. "They make more sense for consumers because they have convenience and affordability of petroleum liquid fuels combined with the efficiency of electricity," Colton said. Mass transit growth, with fleets able to use less expensive compressed natural gas because of their central refueling and transportation coverage, will also have an impact, he added.
ExxonMobil's forecast said other factors will influence consumers' decisions. These include turbocharging, higher-speed automatic transmissions, improved aerodynamics, and reduced weight to improve fuel economy.
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