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