ExxonMobil has made some interesting – if not surprising – forecasts in its annual Outlook for Energy, in which it projects long-term energy trends. The report is not just what Exxon hopes will happen but rather based on detailed analysis of 100 countries, 15 demand sectors and 20 fuel types.
It says energy demand in developing nations will rise more than 70 per cent through 2030 even as energy efficiency measures keep demand flat in the developed world. So, combining the developing and developed world, overall global energy demand will rise 35 per cent from 2005 levels.
Much of this will be due to economic progress in developing nations, where today 1.4bn people – 20 per cent of the world’s population – lack access to electricity. And 2.7bn people – 40 per cent of the world’s population – lack access to modern cooking fuels, relying on traditional biomass, such as wood and dung, which are harmful to air quality and dangerous to use indoors. Some detail:
China will lead a dramatic climb in energy demand as the rising prosperity of its large population is reflected in trends such as increased vehicle ownership and higher electricity consumption.
Despite all this growth in energy demand, Exxon says CO2 emissions growth around the world will be lower than the projected average growth rate in energy demand as cleaner fuels, such as natural gas and renewables, and efforts to improve energy efficiency mitigate the environmental impacts. Good news for those who believe humans are contributing to global warming.
Nonetheless, global carbon dioxide emissions are still likely to increase about 25 per cent from 2005 to 2030. Not exactly the trend the world should be searching for even if it doesn’t believe in the global warming theories. For along with the carbon emissions are a host of others, and pollution of any sort is not good for any of us.
The good news is that even if the world sticks to fossil fuels – and Exxon expects it will – there is a newfound abundance of natural gas - the cleanest of the fossil fuels. New technology has unlocked resources across the US and will enable the growth in gas supplies around the world.
Exxon says natural gas will be in demand as the world seeks to capitalise on this abundant, economic, and lower-carbon fuel. The company notes natural gas produces up to 60 per cent less CO2 than coal.
The ability to extract the fuel from shale rock economically will expand the world’s natural gas supply. Exxon expects unconventional gas supplies in the US to meet more than 50 percent of gas demand by 2030.
From Rex Tillerson, Exxon’s chief executive:
The forecasts also show a shift toward natural gas as businsses and governments look for reliable, affordable and cleaner ways to meet energy needs. Newly unlocked supplies of shale gas and other unconventional energy sources will be vital in meeting this demand.
Exxon expects demand for natural gas for power generation to rise by about 85 per cent from 2005 to 2030. By that date, gas will provide more than 25 per cent of the world’s electricity needs as the second-largest global energy source, after oil.
Oil, natural gas and coal will remain the most significant energy sources, providing just under 80 per cent of global energy, down slightly from today.
What about renewables? Well, it sees wind, solar and biofuels chalking up tremendous growth of nearly 10 per cent per year on average. In 2005, Exxon said, these sectors met less than half of 1 per cent of total energy demand. By 2030, they are to provide about 3 per cent of the world’s energy.
That sounds awfully low, but without any concerted effort by key countries like the US to curb CO2s, Exxon’s assumptions are probably right.