Oil Tops Energy Supply to 2040

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Global energy demand in 2040 will be 35 percent higher than in 2010, with oil, gas and coal accounting for 78 percent of total energy consumption, according to the 2013 edition of ExxonMobils The Outlook for Energy: A View to 2040.

The makeup of the worlds energy supply from 2010 through 2040 is expected to evolve in response to changes such as improved living standards, more fuel-efficient vehicles and modern appliances and buildings, along with increased limitations on greenhouse gas emissions. Full hybrid vehicles are expected to account for nearly half of the global fleet by 2040.

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Energy Demand
ExxonMobil projects demand for all types of energy will grow at an average annual rate of 1 percent a year from 2010 to 2040.

Oil will remain the top energy source, accounting for 32 percent of the worlds energy demand in 2040, compared to 34 percent in 2010. Natural gas will be the fast-growing major energy source, with global demand increasing 65 percent from 2010 to 2040. By 2025, natural gas will displace coal as the second largest fuel, ExxonMobil said. From 2010 to 2040, the use of nuclear energy is expected to double, driven by rising electricity demand and a desire to reduce carbon dioxide emissions. Wind, solar and biofuels are expected to account for 4 percent of global energy demand by 2040. Wind is forecast to rise 7.4 percent per year between 2010 and 2040.

In the Organization for Economic Cooperation and Development nations (including countries in North America and Europe), ExxonMobil expects energy use to remain basically unchanged from 2010 to 2040. The effect of energy efficiency can be clearly seen in the OECD, reflecting the well-developed economies of these countries, with a high penetration of vehicles, modern appliances and electronics, facilities and industrial processes, ExxonMobil stated. And as consumers replace existing equipment with more advanced technologies, less energy will be required to achieve the same objective. Demand is likely to be relatively flat, even as economic output rises by about 80 percent.

By contrast, non-OECD energy demand is expected to grow by 65 percent from 2010 to 2040. ExxonMobil noted that, in non OECD countries, efficiency gains will be outpaced by the demand for energy to support better living standards and expanding prosperity for about 85 percent of the worlds people. The company pointed out that by 2040, energy demand in non OECD countries will more than double that in OECD countries.

Transportation
Global energy demand for transportation will rise by 43 percent from 2010 to 2040. ExxonMobil expects commercial transportation – heavy duty, aviation, marine and rail – will drive growth in global transportation demand.

The number of personal vehicles in the world – cars, SUVs and light pickup trucks for everyday use – is expected to double from 2010 to 1.6 billion vehicles in 2040.

Asia Pacific remains the largest consumer of heavy duty vehicle energy and is projected to see a significant increase in personal vehicle ownership, by about 500 million vehicles from 2010 to 2040. By 2015, transportation demand in Asia Pacific will exceed that of North America. Together, Asia Pacific and North America will make up about 60 percent of global transportation demand in 2040, ExxonMobil reported. However, on a country basis, the United States will remain the largest transportation demand center, followed by China.

ExxonMobil projects the average new car will average about 47 miles per gallon in 2040, compared to 27 miles per gallon in 2010. As more energy-efficient vehicle options become available, conventional gasoline and diesel engine vehicles are forecast to make up a smaller share of the fleet, accounting for 50 percent of the fleet in 2040. This shift in efficiency is driven by manufacturers incorporating improvements into new cars, the company said. Engine and transmission improvements, along with lighter body and accessory parts are expected to improve efficiency of new cars by around 9 mpg [miles per gallon]. The overall efficiency improvement will also be enabled by manufacturers that introduce smaller vehicle models and engines to meet government fuel economy mandates as well as increased penetration of hybrids.

Around 2025, hybrid vehicles will become less expensive and their share of sales will likely expand quickly. Full hybrid vehicles will make up about 49 percent of the fleet in 2040, or more than 50 percent of new car sales.

As 2040 approaches, electric and plug-in hybrids (using a gasoline engine and battery-powered motor) will likely begin to play a more significant role, making up 10 percent of new car sales in 2040, or 5 percent of the fleet. In order to make a significant impact in the marketplace, alternatives like plug-in hybrids or electric cars will need to make substantial progress to overcome hurdles, including a $10,000 to $15,000 higher upfront cost plus range and functional limitations for drivers, ExxonMobil noted.

Emissions
The company believes global energy-related carbon dioxide emissions will likely peak in 2030, due to efficiency gains and a gradual transition to less carbon-intensive energy supplies. ExxonMobil cites those same factors as the reasons the rate of increase of carbon dioxide transmissions from 2010 to 2040 is expected to be about half that of energy demand growth.

In the OECD, the company expects such emissions will decline by 22 percent from 12.8 billion tons in 2010 to 9.9 billion tons in 2040. In non OECD nations, emissions are projected to rise by 49 percent from 17.7 billion tons in 2010 to 26.3 billion tons in 2040. The difference reflects the different stages of economic development and varying degrees and types of energy used at a national level.

In North America, energy-related carbon dioxide emissions are expected to decrease from 6.4 billion tons in 2010 to 5.1 billion tons in 2040, almost a 21 percent drop. Asia Pacific will likely rise from 13.2 billion tons in 2010 to 18.2 billion tons in 2025, a 37 percent increase. However, that is expected to then remain relatively flat thereafter, reaching 18.1 billion tons in 2040.

The 2013 edition of The Outlook for Energy: A View to 2040 is posted at ExxonMobils web site here.

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