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ExxonMobil Outlook: 35% growth in energy demand by 2040; hybrids to account for ~50% of new vehicle sales

15 December 2013

Light-duty-fleet-by-type-chart_full
By 2040, hybrids are expected to account for about 35% of the global light-duty vehicle fleet, up from less than 1% in 2010. Hybrids are expected to account for about half of global new-car sales by 2040. Source: ExxonMobil. Click to enlarge.

Driven by increasing population, urbanization and rising living standards, the world will require some 35% more energy in 2040, according to ExxonMobil’s annual forecast report: Outlook for Energy: A View to 2040. Anticipated population growth will reach nearly 9 billion in 2040 from about 7 billion today, and the global economy is projected to double—at an annual growth rate of nearly 3%—largely in the developing world.

Demand for energy in non-OECD nations will grow by about two-thirds, accounting for essentially all of the increase in global energy use. ExxonMobil projects that meeting future energy demand will be supported by more efficient energy-saving practices and technologies; increased use of less-carbon-intensive fuels such as natural gas, nuclear and renewables; as well as the continued development of technology advances to develop new energy sources. Without the projected gains in efficiency, global energy demand could have risen by more than 100%.

Co2-emissions-by-region-chart_full
Energy-related CO2 emissions. Source: ExxonMobil. Click to enlarge.

Market forces and emerging public policies will continue to have an impact on energy-related carbon dioxide emissions. After decades of growth, worldwide energy-related carbon dioxide emissions are expected to plateau around 2030 before gradually declining toward 2040, despite a steady rise in overall energy use.

Energy used for power generation will continue to be the largest component of global demand and is expected to grow by more than 50% by 2040 as improved living standards that come with urbanization and rising incomes lead to increased household and industrial electricity consumption through wider penetration of electronics, appliances and other modern conveniences. The growth reflects an expected 90% increase in electricity use, led by developing countries where 1.3 billion people are currently without access to electricity.

Transportation. The number of cars on the road worldwide is expected approximately to double from about 800 million to about 1.7 billion, as the world’s population grows and more people in developing economies are able to afford cars.

In 2010, about 75% of the world’s vehicles were in OECD countries. However, looking ahead, about 80% of the growth in the global fleet will come from non-OECD countries.

Vehicle-pentration_full
Vehicle-efficency_full
Vehicle penetration 2000 to 2040. Source: ExxonMobil. Click to enlarge.   Range of average vehicle efficiency. Source: ExxonMobil. Click to enlarge. Click to enlarge.

In 2010 China had only about five light-duty vehicles per 100 people, while India had less than two per 100 people; this compares to about 75 vehicles for every 100 people in the United States. However, by 2040, China and India are expected to increase their levels by more than 500%. ExxonMobil expects that by 2030, China will have surpassed the United States as the country with the largest number of personal vehicles, even though China’s vehicles per capita will be about one-third the level of the United States at that time.

However, fuel demand will plateau and gradually decline as consumers turn to smaller, lighter vehicles and technologies improve fuel economy. As a result, the average efficiency of the world’s vehicle fleet is projected to reach about 46 mpg (about 5.1 liters per 100 km) compared to 24 mpg (9.8 liters per 100 km) in 2010.

This unprecedented improvement in global fuel economy is expected to reflect a surge in hybrid vehicle sales. Hybrids, which combine an internal combustion engine and an electric motor, are expected to account for about half of global new-car sales by 2040, as they become increasingly cost-competitive compared to conventional vehicles.

By 2040, hybrids are expected to account for about 35 percent of the global light-duty vehicle fleet, up from less than 1 percent in 2010. Over the same period, electric and plug-in vehicles are expected to grow to about 70 million cars, or less than 5 percent of the total fleet. This slower growth is attributed to the relatively higher cost of the vehicles, driven by the cost of batteries.

—“Outlook for Energy”

Commercial-transportation-by-region-chart_full
Commercial transportation demand by region. Source: ExxonMobil. Click to enlarge.

Global demand for energy for commercial transportation is expected to rise by 70% from 2010 to 2040, driven by the projected increase in economic activity and the associated increase in movement of goods and freight. China will see the largest increase—more than 4 million oil-equivalent barrels per day.

Transportation fuels. ExxonMobil projects global demand for gasoline (including ethanol) to be relatively flat from 2010 to 2040, largely because cars and other light-duty vehicles will become much more efficient. On the other hand, demand for diesel (including biodiesel) will grow by about 75% to support the rise in activity in trucks and other commercial transportation. Diesel will also play a more significant role in the marine sector in the latter half of the Outlook period, in response to stricter marine emissions standards. Demand for jet fuel will also grow close to 75%.

Transportation-fuel-mix-by-region-chart_full
Transportation fuel mix by region. Source: ExxonMobil. Click to enlarge.

ExxonMobil expects that growth in natural gas as a transportation fuel will be seen mainly in commercial vehicles—mostly fleet trucks that can run on compressed natural gas (CNG) and long-haul trucks that can use liquefied natural gas (LNG). Lower-sulfur fuel regulations for marine vessels expected over the next decade may attract some shipping companies to invest in LNG capability.

In 2010, natural gas accounted for about 1% of all transportation fuels, with about 45% of that demand concentrated in Asia Pacific. By 2040, the share of natural gas will likely rise to 5%, with growth driven by Asia Pacific and North America.

Global-liquids-supply-by-type-chart_full
Global liquids supply by type. As conventional production declines, more of the world’s oil demand will be met by emerging sources that only recently became available in significant quantities: oil sands, tight oil, deepwater, NGLs and biofuels. Source: ExxonMobil. Click to enlarge.

Oil. The outlook projects that oil and natural gas will continue to meet about 60% of energy needs by 2040. Liquid fuels—gasoline, diesel, jet fuel and fuel oil—will remain the energy of choice for most types of transportation because they offer a unique combination of affordability, availability, portability and high energy density.

An expected 25% increase in demand for oil, led by increased commercial transportation activity, will be met through technology advances that enable deep-water production and development of oil sands and tight oil.

Natural gas. Natural gas will continue to be the fastest-growing major fuel source as demand increases by about 65%. Natural gas is projected to account for more than one quarter of all global energy needs by 2040 and it is expected to overtake coal as the largest source of electricity.

Nuclear. Nuclear energy will see solid growth despite some countries scaling back their nuclear expansion plans following the 2011 Fukushima incident in Japan. Growth will be led by the Asia Pacific region, where nuclear output is projected to increase from 3% of total energy in 2010 to nearly 9% by 2040.

Renewable energy. Renewable energy supplies—including traditional biomass, hydro and geothermal as well as wind, solar and biofuels—will grow by nearly 60%. Wind, solar and biofuels are likely to make up about 4% of energy supplies in 2040, up from 1% in 2010.

Other key findings from the 2014 Outlook for Energy include:

  • New technologies will continue to play an important role in development of reliable and affordable energy. Significant advancements in oil and natural gas technologies have safely unlocked vast new supplies, already changing the energy landscape in North America and expanding supplies to help meet growing global energy demand.

  • Through most of the outlook period, more than half of the growth in unconventional natural gas supply will be in North America, providing a strong foundation for increased economic growth across the United States, and most notably in industries such as energy, chemicals, steel and manufacturing. About 65% of the world’s recoverable crude and condensate resource will have yet to be produced by 2040.

  • Global chemicals energy demand is expected to rise by about 55% from 2010 to 2040 and will account for 35% of the growth in the industrial sector. Most of the energy demand growth in the chemicals sector will be for the feedstocks to make the building blocks for a wide range of essential products. Fuel demand will grow more slowly as improvements to efficiency reduce demand growth.

  • Oil and natural gas are the most widely traded energy sources and maintaining a robust global energy marketplace will remain critical to meeting rising energy demand.

  • Traded volumes of natural gas in 2040 are expected to be two-and-a-half times the 2010 level, with most of this growth coming from liquefied natural gas.

The Outlook for Energy is ExxonMobil’s long-term global view of energy demand and supply and its findings help guide investments that underpin the company’s business strategy. The outlook is developed by examining energy supply and demand trends in more than 100 countries and 15 demand sectors, such as transportation, industrial and power generation. Twenty different types of energy that will be available to future consumers are evaluated while taking into account assessments of future technologies, government policies and cross-border trade flows.

December 15, 2013 in Forecasts, Fuel Efficiency, Fuels, Hybrids, Natural Gas, Oil, Power Generation | Permalink | Comments (47) | TrackBack (0)

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However, when the country of USA is awashed in shale oil and gas as now, it would be very difficult to look the other way, to deploy RE and NE instead.

The trick lies in using the might of the Military Industrial Complex and all the congressional districts that command such a high defense budget.

The trick lies in correctly identifying the future enemies of the USA. The future enemy will be GW and Climate Change that will continue to destroy our properties, crops, and lives. The future enemy will be unemployment and social unrest as the result due to wider and wider income disparity. Imagine a new generation of youth unemployment that are prone to join hate groups and crime gangs. This was what happened to Europe post WWI.

You see, no external human enemy dare take on the military might of the USA, with thousands of nuclear warheads and 10 aircraft carriers, and smart drones... A true Defense of the USA must take on another dimension, that caused by natural forces and internal social decay due to social conflicts and neglect.

The fight to halt GW will help create jobs and restore economic crisis and debt crisis and will make the USA much stronger than ever before.

So, the gov. will use 1/2 of the Defense budget to have existing defense contractors building RE and NE infrastructures within the existing congressional districts that have been receiving the most defense dollars. Still the same players, only with new and improved Mission to SAVE the USA and the WORLD!

Then, the finished RE and NE projects will be turned over to existing Energy Companies for free, or almost free, on condition that they will match this by shutting down equivalent numbers of gas and oil wells that correspond to the BTU of energy obtained from the new RE and NE infrastructure. Thus, Energy Companies will have nothing to lose even when they shut down their existing oil and gas wells, because they will more than make up for it with the sale of clean energy given to them for free or almost free...

And so, perhaps this shall be how the WAR on GW and Climate Change and Gov. Debt Crisis and Unemployment will be started...Stay tuned!

Roger Pham

You need to carefully read your article.

What they have done is to put larger blades on a smaller generator so that it will hit the design or nameplate capacity at a lower design wind speed. Instead of have 100 m blades on a 3 MW turbine, they have 100 m blades on a 1.6 MW turbine.

OK, this increases the capacity factor (CF) but lowers the max available power. Now what?

I am all for getting rid of fossil fuels but I also have a reasonable understanding of physics (undergraduate degree in physics from MIT along with a doctorate in ME) and can still do math.

Nuclear still looks like the most reasonable answer for base power.

Also from today's NY Times:

http://www.nytimes.com/2013/12/17/science/earth/a-struggle-to-balance-wind-energy-with-wildlife.html?ref=us

If the climate scientists are right and we need no less than an 80% reduction in CO2 emissions to avoid things getting worse, then we cannot accept any energy scheme that achieves less than 80% cuts (preferably we'd shoot for 100% or even carbon-negativity).

Can wind get there?  According to this piece by Willem Post, the effectiveness of wind in de-carbonizing the Irish grid is barely more than 50% at 17% penetration; things get worse as the fraction of wind increases.  This falls so far short of "green" goals it should be disqualified from renewable energy portfolios; an article quoting an Argonne paper behind a paywall says this:

“The reduction in emissions during operational periods is great enough that the trend of total emissions is clearly decreasing with increasing wind power penetration. However… we see that for most pollutants, the marginal emissions benefits are reduced for high wind power penetration levels, mainly driven by the higher start-up emissions [of fossil-fuel plants].”

The only thing that can get us to zero carbon is nuclear.  I know some people hate this, but people who demand that others accept Inconvenient Truths must take their own in turn.

@sd,
Good point, regarding Cambridge, Mass. That NE corner is deficient in both wind and solar energy, so nuclear energy will be necessary.

The MidWest USA is blessed with both wind and sunshine, so solar and wind will be best there. Desert SouthWest and WestCoast (LA and SF) has reliable sunshine so solar would be best.

Where Harvey lives, hydro provides all energy needs.

The best energy mix varies from one region to another and varies for each time frame.

Forty years ago, Ontario was convinced that Nuclear power plants could supply the majority of their needs. Today, there is serious doubts on the cost effectiveness of depending heavily on Nuclear. France is having the same doubts and is seriously thinking about reducing nuclear from 80% to 50% or even less for the same economic reasons.

Current nuclear plants initial cost are too high and energy produced has to be sold at over $0.16/kWh to survive without subsidises. Normal operations, upkeeps and overhauls are also very costly.

In-factory, mass produced, transportable smaller nuke units may be more cost effective if people accept to live close by. Pooling 10 to 30 of them in isolated areas may be possible.

Roger

Just to set the record straight, I do not live in Cambridge, MA. I went to school and worked there for a while but I have lived in Utah for the past 30 years. Utah might have reasonable solar in the summer but our winds are usually calm with occasion very high winds. There are very few windmills in Utah. That is why I used Wyoming as an example. They have installed quite a few wind mills along the ridges and on higher plateaus but they still seem to mostly not do much. I strongly doubt that the capacity factor is as high as 0.2. Maybe they work at night? They mostly seem to be an eyesore.

I would much rather live near a nuclear power plant than a wind farm. If the cost of solar is low enough, then using them on roofs, etc. would be OK but I would hate to see our desert landscape littered with solar farms.

Kramer Junction in the Mojave desert has been producing solar thermal electric energy for more than 30 years. I think that the installation looks fine and I would say most people would agree.

I would rather have four square miles of solar every 10 miles down the highway in the Mojave than coal fired power plants belching smoke. It is a matter of opinion that should be put to the public to decide. I bet solar wins.

The reason nuclear plants are coming in at such high prices today is that they are being built in ones and twos.  China is building them by the dozen, and has costs around $2500/kW as a result.

The original French build-out also achieved economies of scale and very reasonable costs, so there is no reason not to do it again.  The problem isn't planning for too much nuclear power, it's planning for too little.

The result of a recent local survey with regards to people's power plant objections is rather interesting:

1. Over 90% objected having a nuclear or coal fired PP in their neighborhood.

2. Over 50% objected having NG PP and/or large wind turbines within 10 Km. That objection dropped to under 10% if WT were out of sight and/or over 10 Km from living areas.

3. Over 25% objected to hydro electric power sites.

4. Less than 20% objected to Solar panels or solar PP.


It seems that PPs with less objection would be:

1. Solar (specially on roof tops and in sunny deserts = over 35% of Earth land areas)
2. Wind turbines (specially in inhabited areas)
4. Hydro (excepted for fishermen and extreme green)

It is a NYMBY thing, people might not object to solar in the desert, but they don't want any in their back yard. Some don't even want their neighbors to put any on roof tops, many homeowner association battles have been fought.

As long as the lights come on when the switch is flipped, people don't care much. As long as the bill is not huge every month, they don't complain much. We should stop giving discounts to business that use a lot, the more you use the higher rate you pay, residential or business.

Yes, the majority will use whichever energy is the cheapest regarless where it comes from or how dirty it is. That's who we have become in our new Moneycracy.

However, 90% would not live close to a nuclear or coal fire power plant. All those people cannot be ignored and that will make approval of new Nuke and Coal PP difficult.

If that means I could get prime waterfront real estate for cheap just because it's close to a NPP, GREAT!  Some idiot's loss would be my gain.

The main reason why NPP are built faster and at lower cost in China is not soly due to the quantity being built.

Single unique bridge is build 3 times faster and at 1/4 the cost in China than in Canada or USA. The same can be said about very high speed rails they are building at a rate we can't even dream of. There is no way we could match the speed nor the cost.

We already know a few of the main reasons:

1. Months and years are not required to approve a project.

2. Workers are not unionized, work twice as much and get paid 4 to 6 times less.

3. Construction takes place while design is being fine tuned, one phase at a time.

It depends on how you measure success. China has 100 million affluent and one billion not. They do not have the environmental protections we have and their air and water quality show it.

If you just measure how much it costs to bring a coal fired power plant into operation, then you miss other metrics. I personally like having clean air, clean water and a middle class.

SJC...right on with CPP and environment. Up to 60% of the air pollutants come from CPPs. China and many other countries have made huge mistakes.

However, 120+ NPP, 100,000+ Km high speed e-rails, 100,000+ e-city buses and 200+ million electrified vehicles may help to fix the air pollution problem in China.

It may take 20 to 30+ years but China will introduce the changes required.

SJC ...if they have 10% affuluent, they are doing much better than us with only 3% (and 97% getting relatively poorer year after year).

Of course, being affluent is very relative.

In some society, it may take well over $1M (lets say 5+M) while in other places one may be classified as affluent with 1/10 as much?

The heavy degree of pollution in China is a worrisome sign for the world's environment and the world's economy. It means the economic race to the bottom. It means the race to squander precious environment, health and human lives all in the name of corporate profits. It means that China and other low-cost outsourced destinations give unfair manufacturing cost advantage for those companies who are heavily polluting their environments, causing high rates of cancer and respiratory illnesses. It means that workers in the West are losing their jobs and their self-esteem and their hope and their future just so that others in outsourced destinations can pollute their environment and will live shortened lives with diseases...while the pollution like Mercury, CO2, arsenic, etc will poison the sea water and the air and will make their ways to the West. This globalism and job-outsourcing without regard for environment and human labor exploitation eventually will destroy us all...an all losing situation.

The best way out of it is to imposed tariffs on all goods from countries with more polluted environment and more labor exploitation...in order to give our domestic manufacturers and workers a level playing field.

The Dem wanna raise minimum wage to $11.50 an hour? Fine and good, until the middle class can no longer afford any goods and services made in the USA, while even more illegal immigrants will flock to the USA to fill positions unable to be filled by legal US citizens because they are now being priced out of the labor market, courtesy of an all-well-intended Liberal Democrats!!!

With proper tariffs on imports of goods and services to level the playing field, the minimum wage law should be abolished, in order to give legal Americans a chance at the labor market, as well as giving domestic manufacturers a chance to hire legal Americans!

even more illegal immigrants will flock to the USA to fill positions unable to be filled by legal US citizens because they are now being priced out of the labor market, courtesy of an all-well-intended Liberal Democrats!!!

You have the motivations wrong.  Their goal is to be re-elected, which takes campaign money.  To get campaign money they sell themselves to well-heeled sponsors, whose agendas they carry out.  Those sponsors like the idea of turning the USA into Brazil Norte, with them ruling the roost from gated communities while the middle class vanishes and the masses live in slums.

All the talk about "fairness" and "equality" is a wash of paint over the real agenda.

Good point, E-P. We don't really have leaders anymore. We have followers who has to payback, and who has to follow polls and voters' whims.

The last time the USA had a true leader who came from a rich family hence not beholden to special interests, who wanted world peace, transparency, and a civil society...He was brutally assassinated by a conspiracy of thugs in high power in collusion with his Vice President, without given a chance. His brother was also later assassinated for fear of revenge! From then on, America lost hopes and the people lost hope in their system! People knew...they are not stupid!

Sorry, but that's how the world's top MONEYCRACIES work.

It is completely false to keep calling them DEMOCRACIES. They are no more Democratic than Europe was 500 years ago when a few hundred Lords and Kings ruled and changed the laws to suit their purpose.

Today, in our new Moneycracies, the 3% (soon to be the 1%) with most of the accumulated wealth rule via elected puppets who are invested with the rights to tell us that we are fortunate to live in great Democracies.

They will move their factories, where labour and environment can be exploited without limits, to maximize profits and pay less taxes. They will finance Herbal Tea or Coffee Parties to promote their ideals and increase their hold on the 99%.

To increase the transfer of wealth from the 99% to he 1%, a new tool is being used.

To print an added $85B/month, that will quickly find the way to the 1%, is one of their best move because the 99% strongly believe that they are the one to benefit. The truth is that the benefit for the 99% is very short lived. This new wealth is just passing through on the way to the 1%.

A few North European countries, specially Norway, may have found better ways to distribute wealth without going overboard, like Russia did 90 years ago.

@Harvey,
The type of wealth transfer "like Russia did 90 yrs ago" has proven to be disastrous, so much so that the entire system collapsed.

All that's needed is to level the playing field. Countries in the world and people should compete in ways that respect our world-wide environment and human dignity and human labor. Countries that do not pay sufficient respect to their local environments and the lives and well-being of their workers have unfair cost advantage for the products made in their countries. It's kinda like doping or steroid use in competitive sports and other illegal means to gain advantage. These should be banned. Correspondingly, tariffs should be assessed in proportion to the difference in environment quality and degree of labor exploitation and degree of workplace safety from respective countries. Countries that harmonize these standards can form a Free-Trade Pact wherein no tariffs will be needed.

One way to reduce income inequality is to be sure that there is fair competition and equal opportunities to all members of society. Anti-trust laws should be enforced and revised and evolved to avoid monopoly and to ensure fair competition. Some people will become rich due to their hard work and talent, while other may remain poor due to lack of motivation or lack of talent. However, as long as the playing field is level, and the rules are fair and well-enforced, the poor will accept their fate and will not resent the rich, but will appreciate the rich more for their higher contribution to society that their wealth is well-deserved.

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