ExxonMobil sees growing role of natural gas by 2030
Global energy demand will increase by about 35% in 2030 from 2005 levels as natural gas becomes the world’s second-largest energy source behind oil, ExxonMobil Corp. said as it released its latest yearly energy outlook.
OGJ Washington Editor
WASHINGTON, DC, Jan. 27 -- Global energy demand will increase by about 35% in 2030 from 2005 levels as natural gas becomes the world’s second-largest energy source behind oil, ExxonMobil Corp. said as it released its latest yearly energy outlook. Use of gas and other less carbon-intensive forms of energy, combined with greater energy efficiency, will help mitigate the higher demand’s environmental impacts, it added.
“The forecasts show a shift toward gas as businesses and governments look for reliable, affordable, and cleaner ways to meet energy needs,” ExxonMobil Chief Executive Officer Rex W. Tillerson said. “Newly unlocked supplies of shale gas and other unconventional energy sources will be vital in meeting this demand.”
The outlook, which the multinational oil company develops each year to help guide its global investment decisions, indicated that gas supplies will expand, especially in the US, where unconventional supplies (shale gas, tight gas, and coalbed methane) are expected to meet more than half of total US gas demand by 2030.
Efforts to ensure reliable, affordable energy while limiting greenhouse gas emissions will lead many countries to put a price on carbon dioxide emissions, it predicted. This will make abundant gas supplies increasingly competitive as an economic source of electricity since gas emits up to 60% less carbon dioxide than coal, ExxonMobil’s forecast said.
It anticipates that gas demand for power generation will grow by about 85% from 2005 to 2030, when gas will provide more than 25% of the world’s electricity. It said that it expects gas demand to rise in all parts of the world, but will be strongest outside countries in the Organization for Economic Cooperation and Development, particularly China, where it will be about six times what it was in 2005.
“The ramp-up in gas production which now has the US looking at a 100-year supply because of technological breakthroughs all occurred without policies or subsidies,” Ken Cohen, ExxonMobil’s vice-president of public and government affairs, said during a Jan. 27 teleconference with reporters. “The industry simply put its head down and developed new technologies in response to market forces. We will urge policymakers to remember the tremendous efficiencies the market brings and be careful of policies which try to redirect those efficiencies, particularly now.”
Federal tax subsidies for oil and gas which US President Barack Obama mentioned in his 2011 State of the Union address on Jan. 25 equal about $3/MMbtu, compared to $5/MMBtu for ethanol, according to William Colton, ExxonMobil’s vice-president for corporate strategic planning, who also participated in the teleconference. “We support including natural gas among clean energy alternatives. We do not support mandates,” he said. “Any intervention by government into markets comes at a cost to consumers and the economy. Picking winners and losers would be dangerous. It would hurt this country’s ability to compete.”
He said the outlook projects about a 40% increase in energy demand for transportation from 2005 to 2030, driven more by commercial activity which will account for about two thirds of total transportation consumption by 2030. A higher global commercial fleet size will drive that increase, while the number of personal transportation vehicles (cars and light trucks) also will increase, particularly in Asia, but be much more efficient, he indicated.
Rising electricity demand, and the choice of fuels to generate that electricity, will have a major impact on the global energy landscape in the next two decades, ExxonMobil’s outlook noted. Global electricity demand in 2030 will be more than 80% higher than it was in 2005 as rapid economic growth and expanding prosperity in developing countries outside the OECD push their demand upward by 150%, it said. “Oil, gas, and coal remain dominant, but coal’s share will shrink because of growing consumption of gas, driven by demands to reduce greenhouse gas emissions,” Colton said.
Asked what he thought the biggest changes have been in ExxonMobil’s annual outlooks in the last 10 years, he responded that the estimated global crude oil resource base has grown to about 3 trillion bbl, 1 trillion bbl of which has been produced; and that technology has allowed the industry to tap previously inaccessible gas deposits. “Technology also seems to be the wild card,” Colton said. “One future resource might be battery technology, particularly in electric cars. A fully electric vehicle has a useable range around 100 miles, which is less than most consumers are comfortable with. The batteries also are very heavy. This is a good area for research.”
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