Energy demand, driven by economic progress and population growth, will increase about 50% from the current 205 million boe/d level to 335 million boe/d by 2030, reported ExxonMobil Corp. in an annual long-term outlook of worldwide economic growth and energy demand.
Technology advances will remain critical to meeting energy challenges, and energy efficiency will become increasingly important, the company said.
The report indicated that about 80% of the demand increase will occur in developing nations.
Oil, gas, and coal will remain dominant, with a roughly 80% share of total available energy. Oil and gas resources will remain adequate-with growing oil contributions from the Organization of Petroleum Exporting Countries and the Russia-Caspian Sea area-and with natural gas adequate and diverse with increasingly distant gas supplies driving LNG trade growth.
Coal remains crucial to meeting rapidly growing developing-nation needs.
ExxonMobil evaluated the energy demand outlook for nearly 100 countries and 15-20 country groups. It assessed such elements as population, gross domestic product, economic development, the supply outlook, energy efficiency improvement, current and future consumption patterns, and competition among fuels. It incorporated assessments by economic and energy experts with data from the International Energy Agency, the US Department of Energy, and other agencies.
Global population
During 2000-30 the world’s population is projected to grow at just under 1%/year to about 8 billion people, up from 6 billion in 2000. More than 90% of this growth will be outside the developed-nation members of the Organization for Economic Cooperation and Development. More than half of the world’s population currently lives in the Asia-Pacific region. The population in non-OECD countries represents 80% of the world’s total.
The most significant population growth increases will occur in Latin America, Africa, and particularly Asia-Pacific, while developed countries in Europe along with Japan, South Korea, Australia, and New Zealand in Asia-Pacific are expected to show almost no population growth. The North American population will grow at less than 1%/year, according to the report.
Global GDP
ExxonMobil said the global economy will show strong sustained growth of about 2.7%/year, more than doubling in size to $71 trillion (in 2000 dollars) by 2030.
The fastest growth will be in the rapidly expanding economies of developing countries such as China, India, Indonesia, and Malaysia, which will lead to average growth of more than 5%/year for non-OECD Asia-Pacific. This will create a combined output that approaches that of Europe. This rapid growth will be a key driver of the growing world energy demand.
Economic growth and improved living standards in developing countries are creating huge increases in energy demand, and along with it, increases in CO2 emissions. Non-OECD countries will be responsible for nearly 85% of future CO2 emissions increases.
Energy use
Worldwide energy demand is expected to grow on average by 1.6%/ year, so the world will need about 60% more energy in 2030 than in 2000.
ExxonMobil’s demand forecast incorporates efficiency improvements. OECD nations are expected to be increasingly efficient due to the introduction and use of new technologies in a wide variety of applications, including personal transportation. There are significant opportunities for efficiency gains in developing nations as well, but non-OECD demand-driven especially by the developing Asia-Pacific region with its demand growth rate of 3.2%/year-will move well past that of the OECD countries.
The fastest growing energy need through the year 2030 is fuel for electric power generation, which is expected to grow at 2%/year. Overall transportation uses and chemical needs each will grow at 1.7%. Heating, including fuels for residential, industrial, and commercial uses, including agriculture, will grow at 1.3%/year.
Through 2030, traditional fossil fuels will continue to supply the vast majority of energy needs. Growth in natural gas and coal usage to meet the strong demand for electric power generation is expected to have the highest rates, at 1.8%/year each. Much of the growth in coal demand will occur in Asia, where there are large supplies. In the Asia-Pacific region, coal demand is growing at just over 3%/year.
In the US and Canada, coal use for electricity generation continues to grow due to favorable economics, while its use for heat continues to decline. In total, average growth of about 0.4%/year is expected.
In Europe, coal demand is down from the levels in the 1980s and has been relatively flat since the late 1990s. Demand should remain flat, as building new coal plants will continue to be challenging from a regulatory standpoint in most areas of Europe.
Oil use will grow at 1.4%/year, moderated somewhat by increasing efficiency, particularly in transportation. At the projected growth rates, oil and gas combined will represent close to 60% of overall energy use, which is about the share they hold today.
Other forms of energy, such as nuclear, hydropower, wind, biomass, and other renewables, will grow in total at 1.6%/year.
Nuclear, other energy
Nuclear demand is projected to grow on average by 1.4%/year. The largest growth will be in Asia-Pacific with most new construction after 2020.
Hydro power should grow at just under 2%/year. Further development is expected in China, India, and a few other developing countries. The Three Gorges plant in China is in the early stages of start-up.
Biomass, which includes for the most part traditional fuels, such as wood and dung, is used in developing countries, and wood waste and garbage in developed countries.
The study reports that wind and solar energy growth is expected to average about 11%/year, driven by subsidies and mandates. Even with this strong projected growth, their share of total energy in 2030 will be only about 1%.
Transport fuel demand
Oil, which represents the largest fuel share today, will continue to do so in 2030. Personal vehicle fuel economy will cause oil demand in OECD countries to peak in about 20 years, however. In non-OECD countries, oil demand will continue to increase in all end uses, although transportation will be by far the largest growth segment. Fuel demand for automobiles and trucks will drive total oil demand growth at a rate of 2.5%/year. By 2030, non-OECD oil demand will exceed that in the OECD countries.
The light-duty vehicle fleet-passenger cars and light-duty trucks-is a key component of oil demand. Signs of vehicle saturation are surfacing in most developed countries in North America and Europe, where annual growth rates are about 1%, but in Asia-Pacific, fleet numbers are expected to nearly quadruple. However efficiency and favorable changes in the fleet mix will hold fuels growth to about triple the 2000 levels.
When assessing fuel demand for light duty cars across regions, ExxonMobil foresees significant improvement in the basic efficiency of new cars, and growth in the numbers of hybrid and diesel vehicles. By 2030, hybrids in the US and Canada are expected to represent 10% of the fleet, approaching 30% of all new vehicle sales. European hybrids supplement the already high share of diesel vehicles. Hybrids in Asia-Pacific are mainly in the OECD countries.
These efficiencies will reduce the impact that a larger number of vehicles will have on fuel demand. Fuel demand for light duty vehicles in the US and Canada, for example, likely will remain the same in 2030 as it was in 2000 due to such efficiencies and to the growth in the number of hybrids on the road. In Europe, light-duty fuel demand should decline by 2030.
Conventional oil supply
ExxonMobil’s geoscientists and engineers estimate that global conventional oil resources total 3.2 trillion bbl. Nonconventional “frontier” resources, such as heavy oil, bring that total to more than 4 trillion bbl, including discovered and undiscovered resource estimates. These numbers also contain a “growth” component that reflects the tendency of resource estimates to increase over time.
From the beginning of its history through 2004, the energy industry has produced about 1 trillion bbl of oil, leaving more than 2 trillion bbl of conventional resources still to be produced.
Almost every region of the globe has more conventional crude and condensate remaining than what has been produced. The Middle East and the Russia-Caspian region have the largest remaining resources. Only North America is beyond the 50%-produced point.
Liquids production
The ExxonMobil outlook envisions liquids production increasing throughout the next 25 years.
Today’s OPEC crude oil production, inclusive of Iraq, is about 30 million b/d. After 2010, however, total global liquids demand will create a need for OPEC crude production to reach 47 million b/d by 2030. The resource base is expected to support this increase, ExxonMobil said, assuming timely investments in development.
By 2030 volume gains will be made in refinery processing, gas-to-liquids production, and a small amount of liquids from non-OPEC oil sands, shale, and coal. Biofuels volumes are expected to increase with time.
OPEC condensate and global natural gas liquids also will increase as natural gas production expands, according to the report.
Technology essential
Not only will the resource base grow from new discoveries, but technology will support increases to known reserves. Evolving technology has been, and will remain, essential to meeting global supply challenges, ExxonMobil said.
Extended reach drilling, advanced reservoir imaging, and enhanced recovery techniques currently enable the industry to find, reach, and produce resources in ways not possible just a few years ago.
For example, the world’s most powerful land rig, working at Sakhalin Island in eastern Russia, is drilling extended reach wells 5-6 miles horizontally to access oil and gas beneath the sea. Advanced reservoir imaging is one of the technical tools that allow optimum development of locations such as this. The sophistication of this imaging is continually improving.
And enhanced recovery techniques have repeatedly stretched assessment at many producing fields, such as Means field in Texas, at which estimated recovery potential at one time was estimated to be about 25%. It now has an expected recovery factor of at least 40%. The field has produced for decades.
Technology also is critical for reducing demand for energy by creating efficiency improvements in fuel usage, even traditional fuels such as gasoline. These improvements also will help reduce the level of emissions growth, particularly in OECD countries.
One measure of efficiency relates to vehicles. Advancements are being made in internal combustion engines and in higher efficiency vehicles such as hybrids that will significantly dampen demand growth.
Research efforts are under way with major manufacturers to optimize the combustion process in today’s fuel and engine systems, which can significantly improve their efficiency potential, along with the development of advanced fuels suited for advanced vehicles.
Gas demand
Worldwide gas demand also is expected to grow steadily through 2030, with an average worldwide growth rate of 1.8%/year, ExxonMobil analysts say.
North American demand is expected to grow slowly at 0.5%/year. Efficiency gains and competition from other fuels, such as coal and nuclear power, will dampen gas growth.
In addition, new gas developments are expected to become more challenging and further from the market, consequently more costly in the decade nearing 2030. Coal will then become more competitive with gas for power generation. A reemergence of growth in nuclear power also is expected around 2020.
In Europe, gas demand is expected to grow at 1.5%/year, driven by increases in power generation.
Today, the Asia-Pacific region uses far less natural gas than North America or Europe, but demand growth is escalating rapidly, and by 2030 Asia-Pacific’s gas needs will be on par with North America’s at 90 bcfd. With steep increases in the use of gas for electric power generation and heating, Asia-Pacific’s demand will grow 3.6%/year.
Gas imports
Natural gas imports will become increasingly important to North America, Europe, and the Asia-Pacific region, with long-distance LNG imports required to bridge the gap between increasing demand and declining local supply. A growing diversity in LNG supplies will be necessary.
LNG imports in North America are expected to increase to about 25% of supply by 2030 even with additional supplies delivered via the Alaska pipeline.
Europe will increase gas imports to 85% of supply, with LNG making up a significant portion of those imports.
Asia-Pacific already relies on LNG to supplement its local gas supply. Imports will remain at about one third of supply through 2030, but volumes will increase substantially as demand escalates.
Power generation
Electric power generation will remain a critical driver of demand. Considerations for fuel use in power generation include economics, government policy, and security of supply.
North American gas demand for power generation will grow through 2020, but after that most growth will be met by coal and reemerging nuclear power.
The situation is similar in Europe, where natural gas use will grow through 2030, though more slowly after 2020 as new nuclear plants and more-efficient technologies are brought online.
The substantial growth in Asia-Pacific’s electricity demand will result in all fuel inputs increasing, but none more than coal. ✦