A Peek in ExMos Crystal Ball


CLEVELAND – ExxonMobil predicts that global energy demand in 2030 will be 30 percent greater than today, and that oil, gas and coal will remain crucial to meeting that demand, despite rapid growth in renewable fuels, an ExxonMobil senior energy advisor told the Society of Tribologists and Lubrication Engineers annual meeting.

According to the The Outlook for Energy: A View to 2030, renewables start from such a small base that even with rapid growth they cant significantly alter the global energy mix over the course of the outlook period. Fossil fuels are expected to provide about 80 percent of the worlds energy in 2030. The vast majority of demand increase will take place in developing countries where economies are growing rapidly, and modern energy supplies are still a precious commodity for millions of people.

We really see oil, natural gas and coal remaining predominant through the timeframe, said Todd Onderdonk, of ExxonMobil’s corporate planning department in Irving, Texas, in his May 19 presentation. There will be steps taken to mitigate some of that growth, especially in developing countries. But some of the growth in developing countries, where countries are looking at the most economic options, will continue to turn to that.

Overall Energy Demand
Onderdonk said energy demand will likely continue to grow in the coming decades. Our view, maybe the bottom line, is we see a lot more energy demand out to 2030, about 40 percent higher than in 2005, and about 30 percent more than today, Onderdonk said.

The amount and type of energy used around the world is linked to economic progress. Global economic output, as measured by Gross Domestic Product, rose on average nearly 3 percent per year from 1980 to 2005. Worldwide GDP is expected to increase by about the same rate to 2030, led by rapidly expanding economies of developing countries, according to ExxonMobil.

Onderdonk noted that the world has become much more energy efficient since 1980. The gain in efficiency is illustrated by a decline in energy intensity, measured in the equivalent number of barrels of oil it takes to generate $1,000 in economic value.

In 1980, it took over two and a half barrels of oil equivalent energy to generate $1,000 of economic output, he explained. Today its somewhere around twobarrels. By 2030 we expect that to be somewhere around one and a half barrels, or 50 percent lower than where it was in about 1980. We expect a lot more efficient technology to come in and help make energy demand and growth moderate.

Overall energy demand has historically been growing 1.8 percent year, according to ExxonMobil. We expect it to grow about 1.3 percent to 2030, slower than it has been historically, he said. That reflects some of the energy efficiencies that weve built into the outlook. Global demand is expected to increase from about 230 million barrels per day of oil equivalent in 2005 to nearly 325 million b/d of oil equivalent in 2030.

He emphasized the importance of technology in developing energy supplies, and finding ways to use supplies previously not considered recoverable. Onderdonk explained that a United States Geological Survey (USGS) in 1984 estimated the amount of oil in the world that could be recovered at 1.7 trillion barrels. Over time, that ramped up, not because theres more oil but because we have new technology that could get to that oil and develop it economically, he said. So today the USGS is estimating about 3.3 trillion barrels recoverable, close to our own estimate, which is about 3.6 trillion barrels that is conventional crude.

ExxonMobil expects that resources on top of that, including heavy oil and oil shale, pushes the recoverable amount to the range of 4 trillion to 5 trillion barrels. So we think theres adequate resources out there to support the growth going forward out to 2030 and beyond, he said.

Liquids Supply and Demand
Global demand for liquid fuels is expected to grow 1.3 percent from 2005 to 2030, increasing from 86 million barrels per day of oil equivalent to 116 million b/d of oil equivalent in 2030. Oil will be among a variety of sources meeting that need.

Oil sands output is expected to grow from 1 million b/d to more than 4 million b/d in 2030. Its an important supply, Onderdonk added.

Natural gas liquids are also expected to increase as gas supplies grow. OPEC (Organization of Petroleum Exporting Countries) condensate will grow to more than more than 3 million b/d in 2030. Other supplies will include gas-to-liquids, expected to rise to about 1 million b/d and coal-to-liquids, which ExxonMobil expects will contribute modestly through demonstration plants. Refinery processing gains will also add to increased supplies.

Onderdonk said the outlook foresees an increase in biofuel supplies, primarily ethanol from corn and sugar cane. Weve actually boosted our outlook from about 2 million barrels per day in 2030, up to about 3 million barrels per day, he said. We do see it contributing more, although it only provides about 3 percent of our liquid fuels demand.

The outlook foresees OPEC crude oil continuing to play a large role in supply. OPEC crudes about 30 million barrels per day today, and we expect theyll continue to ramp production up to about 45 or 50 million barrels per day by 2030, Onderdonk said.

Energy Sources
Oil demand, driven by transportation and industrial demand, is expected to increase at 1.2 percent per year to 2030. Gas consumption is expected to grow at 1.7 percent per year, benefiting from the demand in power generation for efficient fuels with relatively low carbon intensity. Demand for coal, because of its high carbon intensity, is likely to rise less than 1 percent per year.

Onderdonk said renewables are expected to gain in share, with a growth rate of 1.5 percent per to 2030. Renewables saw modest growth between 1980 and 2005.

Within the renewable energy category, the largest renewable segment now consists of traditional biomass – wood, charcoal, dung – with relatively slow growth. The outlook expects modest growth close to 2 percent per year for hydroelectric and geothermal energy, which are limited by the availability of natural sites.

Onderdonk said modern renewables – wind, solar and biofuels – will likely grow rapidly, supported by government subsidies and mandates. Biofuels, mainly ethanol, will grow at about 8 percent year, while wind and solar are expected to grow about 10 percent per year. There was solid growth between 1980 and 2005, and since then it really began to ramp up, and we expect it to grow rapidly, he said. Wind and solar combined still will only account for about 1 percent of global energy demand in 2030. Adding biofuels will bring the three types to a total share of 2 percent.

ExxonMobil projects a 2 percent growth rate for nuclear power out to 2030, and expects more nuclear power plants to be built in the 2020 time frame. We dont see a lot of nuclear builds between now and then, he said.

Personal Transportation
In global personal transportation, rising incomes in developing countries are increasing the potential for growth in vehicle ownership, while many developed countries have reached the saturation level point.

What we see over time is when a country reaches about $1,000 per capita income, the vehicle penetration begins to pay off, because more people can afford to buy a car, he explained. China, for example, has passed that $1,000 per capita threshold. Theres a huge potential for growth of vehicles there, Onderdonk added.

The global car fleet consists of about 700 million vehicles worldwide, with about 80 percent of those in developed countries, and one third of them in the United States alone. While the Organization for Economic Cooperation and Development member countries account for close to 80 percent of this energy demand today, the rate of growth in the non-OECD nations since 1980 has been approximately four times faster, ExxonMobil said.

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