The Long-Term Outlook
Energy outlooks by companies, government agencies, and private industry groups identify long-term energy trends and develop projections on supply and demand based on factors such as technological advancement, population trends, the global economy, and policy issues. One of the most respected of these viewpoints comes annually from ExxonMobil, which last month updated its projections for the next 25-plus years in its “Outlook for Energy: A View to 2040.”
Although some of the trends are carry-overs from previous editions, the energy landscape has changed a lot over the past few years, most notably the growth in unconventional resources in North America. Here are some of the significant findings from the report:
- Energy demand in developing nations will rise 65% by 2040, reflecting growing prosperity and expanding economies.
- Greater demand in electricity and transportation fuel will help drive this increase.
- Technology continues to allow for the development of once hard-to-produce energy resources, significantly expanding available supplies to meet global demand.
- Oil will remain the top global fuel, as transportation use will contribute to gasoline and diesel demand. Demand for transportation fuel will stay flat in Europe and decline in North America, but it will grow dramatically in the rest of the world.
- Natural gas will become the world’s second most used fuel during the period, overtaking coal.
ExxonMobil forecasts that global energy consumption will rise 35% by 2040, primarily in China and India. Demand in developed regions such as the United States, Canada, and Europe will largely remain unchanged or decline as they become more efficient in their energy use. Developed nations are forecast to generate 80% more economic output by 2040 compared with 2010, but will use the same amount of energy.
Another report released last month, by the US Energy Information Administration (EIA), predicts that growth in unconventional production will continue to have a huge effect on the US. The report forecasts US oil production increases of more than 200,000 B/D each year through 2019. In addition, the country will become an important supplier of natural gas globally as domestic production outpaces demand.
The US currently produces 6.5 million B/D of oil and that figure will rise to 7.5 million B/D by 2019, and will remain above 6 million B/D through 2040, according to the report. Most of the growth will come from onshore production, mainly from shale and other tight formations, the EIA said. US gas production will continue to outstrip domestic demand through 2020. The outlook sees world oil demand growing from the current 88 million B/D to 113 million B/D in 2040 because of strong consumption in China, India, Brazil, and other developing economies.
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