ExxonMobil Outlook projects hybrids and advanced vehicles to account for nearly 50% of cars globally by 2040; fuel demand for for personal vehicles to peak and decline, while commercial transportation demand rises 70%
|Light duty vehicle fleet by type and average fuel efficiency. Source: ExxonMobil Outlook. Click to enlarge.|
Exxon Mobil Corporation’s new The Outlook for Energy: A View to 2040, released last week, projects that global energy demand in 2040 will be about 30% higher than it was in 2010 as population grows to 9 billion and global GDP doubles. Growth is led by developing regions such as China, India, Africa and other emerging economies. This edition of the annual Outlook marks the first extension of the long-term energy forecast to 2040.
While oil will remain the most widely used fuel, overall energy demand will be reshaped by a continued shift toward less-carbon-intensive energy source as well as steep improvements in energy efficiency in areas such as transportation, where the expanded use of advanced and hybrid vehicles will help push average new-car fuel economy to 48 mpg (4.9 L/100 km) by 2040.
ExxonMobil expects that by 2040, hybrids and other advanced vehicles will account for nearly 50 percent of light duty vehicles on the road, compared to only about 1 percent today. The vast majority will be hybrids that use mainly gasoline plus a small amount of battery power; these will make up more than 40 percent of the global fleet by 2040. Globally, ExxonMobil expects to see growth in plug-in hybrids and electric vehicles, along with compressed natural gas (CNG) and liquefied petroleum gas (LPG) powered vehicles. However, these will account for only about 5 percent of the global fleet in 2040, their growth limited by cost and functionality considerations.
Additionally, to achieve proposed fuel-economy targets, personal vehicles will need to be smaller and lighter than they are today. Vehicle downsizing could account for more than one-third of total projected fuel economy improvements through 2040. Globally, ExxonMobil expects the average new car to get 48 miles per gallon (MPG) in 2040, compared to 27 MPG in 2010.—ExxonMobil Outlook
Because of that, demand for energy for personal vehicles will remain essentially flat through 2040 even as the number of personal vehicles in the world doubles to about 1.6 billion units.
ExxonMobil projects that of all advanced-vehicle technologies, hybrids will offer the best value for consumers. By 2030, ExxonMobil expects that, on average, hybrid vehicles will cost about $1,500 more than a similar-sized conventional vehicle, whereas a compressed-natural-gas (CNG) vehicle will be nearly $4,000 more, and an electric vehicle will be $12,000 more.
The Outlook projects that demand for energy for commercial transportation—trucks, airplanes, ships and trains—will rise by more than 70%, driven by economic growth, particularly in Non OECD nations.
ExxonMobil expects that heavy duty vehicles will grow significantly more fuel-efficient over the next 30 years. However, these improvements will be partially offset by operating factors such as increased road congestion and evolving delivery trends. As a result, by 2030, the world will use more fuel for trucks and other heavy duty vehicles than for all personal vehicles combined. By 2040, heavy duty fuel demand will be up about 60 percent versus 2010.
This shift will be reflected in the market for transportation fuels. Demand for diesel—the most popular fuel for heavy duty vehicles—will rise by 85 percent through 2040, while gasoline demand will fall by about 10 percent.—ExxonMobil Outlook
|Transportation fuel demand. Source: ExxonMobil Outlook. Click to enlarge.|
Demand for oil and other liquid fuels will rise by nearly 30%, and most of that increase will be linked to transportation. 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.
As in previous editions of The Outlook for Energy, rising demand for electricity is identified as the single largest influence on energy trends. ExxonMobil projects that global electricity demand will rise by 80% through 2040 as economies and living standards improve, and consumers switch to electricity from other sources such as oil, coal or biomass. By 2040, four out of every 10 units of energy produced in the world will be going toward the production of electricity.
The mix of fuels used to produce electricity will change significantly. By 2040, 30% of the world’s electricity will be produced using natural gas, while demand for coal will peak and experience its first long-term decline in modern history. ExxonMobil estimates that natural gas from shale and similar sources will account for 30% of global gas production by 2040.
Among this year’s other findings:
While demand in the United States and other fully developed economies will remain relatively constant, global growth in energy demand will be led by China and other countries which are not part of the Organization for Economic Cooperation and Development (OECD). Non OECD energy demand is projected to rise by nearly 60 percent from 2010 to 2040.
While global energy demand is expected to rise by about 30% from 2010 to 2040, demand growth would be approximately four times that amount without projected gains in efficiency. Efficiency is the key reason why energy demand will rise by only about 1% a year on average even as global GDP rises by nearly 3% a year. It also is the reason why OECD energy demand will remain relatively unchanged through 2040 even as its economic output nearly doubles.
Natural gas will continue to be the fastest-growing major fuel, and demand will increase by about 60% from 2010 to 2040. Growth is particularly strong in the Non OECD countries in the Asia Pacific region, where demand for natural gas is expected to triple over the next 30 years.
While growth in nuclear capacity is expected to slow in the near-term, demand for nuclear power is projected to nearly double over The Outlook for Energy period as nations seek to lower emissions and diversify energy sources.
Renewable fuels will see strong growth. By 2040, more than 15 percent of the world’s electricity will be generated by renewable fuels—solar, wind, biofuels, biomass, geothermal and hydroelectric power. The fastest-growing of these will be wind, which will increase by about 8% per year from 2010 to 2040.
Developed using a combination of public and proprietary sources, The Outlook for Energy guides ExxonMobil’s global investment decisions. Many of its findings are similar to those from other organizations, including the International Energy Agency.