Exxon says natural gas will support energy demand growth

The world’s energy demand will grow 30 percent by 2040, but coal’s reign in electricity generation will decline in favor of cleaner-burning natural gas, Exxon Mobil said in its annual energy outlook.

Developing economies in Latin America, China, India and Africa, will largely drive the surging global demand, said Bill Colton, ExxonMobil vice present of Corporate Strategic Planning. More energy will be needed to power their growing commercial and industrial sectors and their citizen’s improved standards of living.

Electricity remains the largest draw on energy and rapid improvements in the energy efficiency of buildings and appliances won’t be enough to curb demand, Colton said in a press conference Thursday morning.

“In the near-term, prospects for the global economy might look uncertain, but over the next 30 years, the world will continue to experience economic growth,” he said. “As the world population expands and living standards improve, the world will need more energy, even as we learn to use energy more efficiently.”

In 2040, coal, oil and natural gas will supply nearly 80 percent of the world’s energy, the report noted. Renewable fuels, primarily wind, will be the fastest growing energy sources, but they will remain a minor slice of the global energy supply, increasing from 1 percent today to 4 percent in 2040, the report projects.

Most of the world’s growing energy demands will be for electricity, according to the report, which will gradually replace coal-based generation with natural gas, a result of a global push to reduce carbon emissions.

“After 2030, we see global coal demand declining for the first time in modern history,” Colton said.

The report also expects hybrid vehicles to have a significant impact on energy use. By 2040, hybrids will account for 40 percent of all light-duty vehicles on the road, the report projects.

Among this year’s other findings:

• Demand for oil and other liquid fuels will rise by nearly 30 percent, and most of that jump will be spurred by transportation needs. A growing share of the supplies used to meet liquid-fuel demand will come from deepwater, oil sands, tight oil, natural gas liquids and biofuels.
• Natural gas will continue to be the fastest-growing major fuel, and demand will increase by about 60 percent from 2010 to 2040.
• Gas from shale and other unconventional rock formations will account for 30 percent of global gas production by 2040.
• Demand in the United States and other fully developed economies will remain relatively constant, while global demand growth will be led by China and other countries not part of the Organization for Economic Cooperation and Development (OECD).
• Global energy demand is expected to rise by about 30 percent from 2010 to 2040. Without projected gains in energy efficiency, demand growth would be about four time that amount.
• Advanced hybrid vehicles will account for 50 percent of the cars people will drive in 2040, compared to about 1 percent today.

Exxon: 2012 The Outlook for Energy

• Demand for energy for commercial transportation — trucks, airplanes, ships and trains — will rise by more than 70 percent.
• Demand growth would be more than four times the projected 30 percent without expected gains in efficiency.