Energy Demand

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

Oil will stay the top energy source, accounting for 31 percent of the worlds energy demand in 2040, compared to 34 percent in 2010. Natural gas will be the fastest-growing major energy source, with global demand increasing 64 percent from 2010 to 2040.

By 2025, natural gas will be tied with coal as the second largest fuel, ExxonMobil projected. From 2010 to 2040, the use of nuclear energy is expected to increase to 8 percent, up from 5 percent, driven by the need to meet electricity needs while reducing emissions.

Wind, solar and biofuels are expected to account for about 4 percent of energy supplies in 2040, up from 1 percent in 2010. We foresee wind and solar providing about 10 percent of electricity generated in 2040, up from about 2 percent in 2010, ExxonMobil stated.

The company expects that in the Organization for Economic Cooperation and Development nations (including countries in North America and Europe), energy use will essentially remain flat from 2010 through 2040. Thats due to factors such as the continued expansion of OECD economies, improvements to energy efficiency and slower population growth. This group already has relatively high living standards, urbanization levels and per capita energy use reflecting well-advanced economies, ExxonMobil stated. Economic growth in the OECD countries will likely average 2 percent annually through 2040.

The projected rise in population and GDP through 2040 could have caused global energy demand to rise by more than 100 percent. But much of that demand increase will be avoided because of advances in energy efficiency across all sectors, ExxonMobil said. Another reason for the slowdown in global energy demand growth is the fact that over time, an increasing percentage of the worlds population – including OECD countries and China – will already have achieved a relatively high standard of living with relatively stable energy needs.

By contrast, non-OECD energy demand is expected to grow by 67 percent from 2010 to 2040, with China and India leading the growth in energy demand as they make broad gains in living standards. In addition, 10 key countries – Brazil, Indonesia, Saudi Arabia, Iran, South Africa, Nigeria, Thailand, Egypt, Mexico and Turkey – together by 2040 will have energy demand approaching the level of China. Although Mexico and Turkey are OECD members, ExxonMobil pointed out that each has population, economic and energy demand growth closely resembling that of OECD member countries.

Transportation

Global energy demand for transportation will grow by almost 29 percent from 2010 to 2040.

Although about 75 percent of the worlds vehicles were in OECD countries in 2010, ExxonMobil said about 80 percent of the growth in the global fleet will come from non-OECD countries. For example, in 2010 China had only about five light-duty vehicles per 100 people, and India less than two per 100 people. Thats compared to about 75 vehicles for every 100 people in the United States. By 2040, China and India are each expected to increase their levels by more than 500 percent.

The number of light-duty vehicles in the world – cars, pickup trucks and sport utility vehicles – is projected to more than double from about 800 million in 2010 to about 1.7 billion vehicles in 2040. ExxonMobil noted that, the increase in the number of light-duty vehicles in the world through 2040 will likely be offset by the fact that the vehicles themselves will be far more fuel efficient. As a result, the average efficiency of the worlds vehicle fleet is projected to reach about 46 miles per gallon in 2040, compared to 24 mpg in 2010.

The improvement in global fuel economy is expected to reflect a surge in hybrid vehicle sales, the company said. By 2040, hybrids are expected to account for about 35 percent of the global light-duty vehicle fleet, up from less than 1 percent in 2010. Over the same period, electric and plug-in vehicles are expected to grow to about 70 million cars, or less than 5 percent of the total fleet, ExxonMobil stated. This slower growth is attributed to the relatively higher cost of the vehicles, driven by the cost of batteries.

Global demand for energy for commercial transportation is expected to rise by 70 percent from 2010 to 2040, driven by the projected increase in economic activity and the associated increase in movement of goods and freight. While almost every country will experience an increase in commercial transportation energy demand through 2040, China will see the largest increase at more than 4 million oil-equivalent barrels per day. In 2010, China trailed Europe, the United States and the Middle East in energy demand for commercial transportation. By 2040, ExxonMobil projects China will be in the top spot.

Emissions

The company believes market forces as well as emerging public policies are impacting energy-related carbon dioxide emissions in many parts of the world. After decades of growth, we expect worldwide energy-related carbon dioxide emissions will plateau around 2030 before gradually declining toward 2040, despite a steady rise in overall energy use.

In the OECD, the company expects such emissions will decline by 24 percent from 12.8 billion metric tons in 2010 to 9.7 billion tons in 2040. In non OECD nations, emissions are projected to grow by 50 percent from 17.8 billion tons in 2010 to 26.7 billion tons in 2040. The differences reflect the countries different stages of economic development and the different types of energy used at a national level.

In North America, energy-related carbon dioxide emissions are expected to decrease from 6.5 billion tons in 2010 to 5 billion tons in 2040, a 23 percent drop. Asia Pacific will likely increase 39 percent from 13.1 billion tons in 2010, to 18.3 billion tons in 2025, and then remain at that amount in 2040.

The 2014 edition of The Outlook for Energy: A View to 2040 is posted on ExxonMobils web site here.