Non-OECD Energy Needs to Drive Global Energy Demand through 2030
ExxonMobil estimates that global energy demand will be about 35 percent higher in 2030 versus 2005, with demand in developing nations, or non-Organization for Economic Co-operation and Development (OECD) countries, rising by more than 70 percent, even as efficiency improvements help curb energy consumption, the company reports in its Outlook for Energy: A View to 2030.
The growing global population and associated economic growth, particularly in China and India, will create more energy demand. On average, energy demand from 2005 through 2030 is forecast to grow by 1.2 percent; during that time, the global population is expected to grow by .9 percent on average per year, and gross domestic product will grow at an average 2.8 percent per year. The potential for future energy growth in non-OECD countries is significant as 2.5 billion people worldwide still cook with food and have no access to modern fuels used in cooking; another 1.4 billion people have no access to any kind of electricity.
"Without the benefit of energy efficiencies, non-OECD energy growth would be 200 percent," said William M. Colton, vice president of corporate strategic planning, today during a conference call outlining the report. Meanwhile, energy demand in OECD countries will remain flat as more efficient technology reduces consumption, even though the total economic output of these nations is expected to rise by about 60 percent.
Rising electricity demand, particularly for heavy industry and residential use, and the fuels used to generate electricity, will represent a key focus area, which will have significant impact on the global energy landscape in the next 20 years. Global electricity demand will rise by more than 80 percent through 2030 from 2005 levels, and demand will soar by over 150 percent in non-OECD countries as economic and social development improve and more people gain access to electricity.
ExxonMobil notes that power generation will be the largest and fastest growing major energy-demand sector and will likely represent 55 percent of total demand growth through 2030. At that time, power generation will account for about 40 percent of total primary energy demand.
The global energy supply mix will continue to evolve, but oil, natural gas and coal will continue to meet most of the world's energy needs during this period as no other energy sources can meet their availability, versatility, affordability and scale. Transportation will drive oil demand growth, and "liquid fuels remain the fuel of choice for transportation," said Colton. "No technology so far has been able to outperform oil and gasoline in terms of convenience and economics. For planes and cars, it's hard to beat the energy density of oil and gas."
ExxonMobil anticipates demand for natural gas will continue to grow through 2030, becoming the second mostly widely used fuel ahead of coal, as government policies worldwide will favor the use of cleaner-burning gas, considered more reliable and affordable than other energy resources, to reduce greenhouse gas emissions.
Demand for natural gas for power generation is expected to rise by about 85 percent from 2005 to 2030 when gas will provide more than a quarter of the world's electricity needs. Gas demand is growing in every global region but is strongest in non-OECD countries, especially China, where demand in 2030 will be approximately six times what it was in 2005. Global gas supply will continue to expand, particularly in the U.S. where unconventional gas supplies are expected to meet more than 50 percent of gas demand by 2030.
The growing use of gas and other less-carbon intensive energy supplies, combined with greater energy efficiency worldwide, will help mitigate environmental impacts of increased energy demand. According to the outlook, global energy-related carbon dioxide emissions growth will be lower than the projected average rate of growth in energy demand.
While renewable energy sources such as wind and biofuels are projected to grow at nearly 10 percent on average through 2030, their contribution by 2030 is likely to remain relatively small at about 2.5 percent of total energy as they are starting from a small base. "Under any scenario, gas remains an attractive fuel for its abundance and lower emissions," Colton said.
Colton said the company will continue look at all possibilities for generating return for shareholders, including research into algae as a biofuel and technologies to reduce carbon dioxide emissions. However, Colton said the company remains primarily an oil and gas company and that dramatic changes in ExxonMobil's behavior should not be expected. "Our mission is to create value for shareholders and provide the fuels that consumers want. Our outlook is that consumers will pick oil and gas," Colton said.
ExxonMobil believes consumers should pick the fuels that work for them, rather than let clean energy mandates and standards dictate the market. "It's dangerous for the economy, consumers and will hurt U.S. competitiveness," Colton said.
ExxonMobil utilizes its annual energy outlook, the result of analysis of approximately 100 countries, 15 demand sectors and 20 fuel types, to guide its global investment decisions. The outlook is underpinned by economic and population projects and expectations of significant energy efficiency improvements and technology advancements.
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