Exxon Mobil recently said that it expects global oil demand to plateau beyond 2030 but remain above 100 million barrels per day through 2050, similar to today’s levels.
In its latest global outlook report, the company said that the large majority of the world’s oil is and will go to industrial processes including manufacturing and chemical production, along with heavy-duty transportation like shipping, trucking and aviation. These services are essential for modern life and they also fuel future economic growth in the developing world.
Lifting nations toward the modern energy minimum
The largest U.S. oil company said that the world is at a pivotal stage where it needs to reduce carbon emissions and still provide the energy people need. Lifting nations toward the modern energy minimum will drive a 15 percent increase in total energy use worldwide between now and 2050.
Renewables will play an important role and so will oil and natural gas. Nearly all of this increase enables economic growth in developing countries. By contrast, energy use in developed nations will decline by more than 10 percent as efficiency improves.
Carbon emission to fall by 2030
“Even as developing economies grow and consume more energy, global carbon emissions will start to fall for the first time by 2030,” stated Exxon Mobil. In fact, the company’s outlook sees carbon emissions continuing to decline through 2050 due to greater energy efficiency, more renewables, and lower-emission technologies, including carbon capture and storage, hydrogen, and biofuels.
The oil giant also expects electricity use to grow by 80 percent by 2050.
More broadly, the most significant changes in the world’s total energy mix between now and then will be solar and wind energy, which will likely grow by fourfold in the total energy mix. In addition, coal will continue to be displaced by lower-emission sources, including natural gas, which reduces carbon emissions by up to 60 percent in electricity generation.
Global oil supplies to dwindle without new investment
Exxon Mobil says that if every new car sold in the world in 2035 were electric, oil demand in 2050 would still be 85 million barrels per day. That’s the same as it was in 2010.
As the world’s demand for oil and natural gas remains strong, sustaining investment is more important than ever.
The oil company’s outlook reflects oil production naturally declining at a rate of about 15 percent per year. That’s nearly double the IEA’s prior estimates of about 8 percent. This increase is the result of the world’s shifting energy mix toward unconventional sources of oil and natural gas. These are mostly shale and dense rock formations where oil and gas production typically declines faster.
With no new investment, global oil supplies would fall by more than 15 million barrels per day in the first year alone. At that rate, by 2030, oil supplies would fall from 100 million barrels per day to less than 30 million – that’s 70 million barrels short of what’s needed to meet demand every day.
Read: QatarEnergy, KPC ink 15-year deal to supply up to 3 MTPA of LNG to Kuwait
Investments in technology
“To improve living standards and get to a lower emissions future, the world needs to make sustained investments in new technologies to meet increased demand, fuel economic growth – especially in developing countries, and further reduce global emissions,” stated Exxon Mobil.
Rapid growth in wind and solar in the energy mix will trigger the biggest changes to the energy landscape. That’s an important part of the solution.
Commercial transportation and industrial activity alone will account for nearly half of the world’s emissions in 2050. Wind and solar will play a limited role in these sectors. Therefore, reducing emissions in “hard to decarbonize” sectors such as aviation, cement, steel, and others with unique energy needs will require the world to rely on the expansion of biofuels, carbon capture and storage, and hydrogen, among other technologies.
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