Oil Still Leads Way to 2040

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Oil Still Leads Way to 2040

Global energy demand in 2040 will be 25 percent higher than in 2014, with oil, natural gas and coal accounting for nearly 80 percent of total energy consumption, according to the 2016 edition of ExxonMobils The Outlook for Energy: A View to 2040. Conventional hybrid vehicles are expected to make up 40 percent of new car sales by 2040.

Energy Demand

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The company projects demand for all energy types worldwide will rise at an average annual rate just shy of 1 percent a year from 2014 to 2040.

Oil will stay the top energy source, supplying 32 percent of the worlds energy demand in 2040, down from 34 percent in 2014. Natural gas will be the fastest-growing energy source, with global consumption rising from 120 quadrillion British thermal units in 2014 to 181 quadrillion BTUs in 2040, when it will account for 26 percent of global demand.

Coal is expected to account for 20 percent of world energy demand in 2040, down from 26 percent in 2014.

From 2014 to 2040, nuclear energys share of total energy demand is forecast to increase to 8 percent, from 5 percent, with China accounting for nearly half of that growth.

Photo: Saidin Jusoh/Fotolia

The outlook also projects that wind, solar and biofuels will grow rapidly, more than tripling from 2014 to 2040. The largest volume growth will come from wind, which by 2040 is projected to supply about 2 percent of the worlds energy and nearly 10 percent of its electricity, the company stated.

Together, China and India are expected to account for almost half the projected growth in global energy demand to 2040.

The company said a group of 10 key growth countries with rising populations and living standards will also drive strong increases in energy demand. The group includes Brazil, Mexico, South Africa, Nigeria, Egypt, Turkey, Saudi Arabia, Iran, Thailand and Indonesia. Collectively, the 10 nations account for 30 percent of projected growth in energy demand through 2040.

Transportation

Global energy demand for transportation is projected to increase by about 30 percent from 2014 to 2040.

The number of light-duty vehicles in the world – cars, pickup trucks and sport utility vehicles – is expected to grow from around 900 million vehicles in 2014 to about 1.7 billion in 2040.

The global motor cycle fleet is likely to nearly double, reaching 1 billion by 2040, led by India, China and Indonesia.

The average light-duty vehicle on the road will likely get about 45 miles per gallon in 2040, compared to about 25 mpg in 2014.

The Organization for Economic Co-operation and Development is a forum of 34 member nations promoting policies to improve the economic and social well-being of people around the world. ExxonMobils outlook also uses the term OECD32 to identify developed nations. It includes all OECD members except Mexico and Turkey, which the outlook categorizes as among 10 key growth countries.

Virtually all the growth in energy demand for transportation is projected to come from non-OECD countries, where such demand is anticipated to rise by about two thirds over that time.

In these countries, more cars and increased use of heavy-duty vehicles is likely to more than offset the impact of better fuel efficiency, while increased economic activity will promote a rise in marine, aviation and rail transportation, ExxonMobil said. In OECD32 countries, energy demand for transportation demand is expected to decline about 10 percent through 2040, reflecting relatively mature levels of economic development, modest population growth, and the rising use of advanced technologies that boost fuel efficiency without sacrificing mobility.

The outlook expects conventional hybrids to leap from about 2 percent of new car sales in 2014 to more than 40 percent by 2040. By contrast, plug-in hybrids and fully electric cars are likely to account for less than 10 percent of new car sales globally in 2040, the company forecasts, with cost and functionality remaining barriers.

The company forecasts that heavy-duty vehicles will become the transportation sectors largest energy-consuming segment by 2030. Global energy demand for heavy-duty vehicles is expected to increase by 45 percent from 2014 to 2040, with 85 percent of the growth coming from non-OECD32 countries, where economic activity is increasing most rapidly.

Emissions

The outlook anticipated global carbon dioxide emissions will reach peak around 2030 and then decline to 36.4 billion tons in 2040, up 11.3 percent from 32.7 billion tons in 2014. In the OECD, emissions are expected to decline by 21 percent from 12.4 billion tons in 2014 to 9.8 billion tons in 2040.

In the OECD, the company projected such emissions will fall 21 percent from 12.4 billion tons in 2014 to 9.8 billion tons in 2040. Europe will likely remain the least carbon-intensive economy of any major region. In North America, energy-related carbon dioxide emissions are projected to decrease 17.2 percent from 6.4 billion tons in 2014 to 5.3 billion tons in 2040.

Trends contributing to the carbon downturn include slowing population growth, maturing economies and a shift to cleaner fuels like natural gas and renewables – some voluntary and some the result of policy. The company pointed out the biggest factor is energy efficiency, which continues to improve as technology evolves.

For purposes of the outlook, we continue to assume that governments will enact policies that impose rising costs on energy-related carbon dioxide emissions, reaching an implied cost in OECD nations of about $80 per ton in 2040, the company stated. China and other leading non-OECD nations are expected to trail OECD policy initiatives.

In non-OECD nations, emissions are forecasted to grow 32 percent from 20.2 billion tons in 2014 to 26.6 billion tons in 2040. Chinas emissions are likely to peak by 2030 and then decline by 10 percent to 2040, when its share of global emissions will be about 25 percent, more than double that of the United States or India, the company noted. Emissions will continue to rise in India and other developing countries through 2040, but around 2030, the downward trends in the OECD and China are expected to more than offset those increases.

The 2016 edition of The Outlook for Energy: A View to 2040 is posted on ExxonMobils web site here.

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