ExxonMobil today released its Energy & Carbon Summary:
Positioning for a Lower-Carbon Future and its Outlook for Energy: A
View to 2040. The reports highlight ExxonMobil’s analysis of 2
degree Celsius (2oC) scenarios and include sensitivity analyses on
electric vehicle penetration and renewables deployment. They are in
response to a 2017 shareholder resolution seeking additional
climate disclosures about the impacts of technology advances and
global climate change policies on the company.
The Energy & Carbon Summary and a new special section in the
annual Outlook for Energy include consideration of the impact on
future energy demand from an analysis of multiple lower-carbon
scenarios published by the Stanford University Energy Modeling
Forum. The forum’s scenarios are publicly available and are used
for analytical purposes, including by the UN’s Intergovernmental
Panel on Climate Change.
The global scenarios assessed by ExxonMobil, which include a
full range of energy technologies, contemplate limiting global
greenhouse gas (GHG) emissions to have a likely chance of holding
atmospheric concentrations to the equivalent of 450 parts per
million CO2 in 2100; these scenarios are generally considered to be
consistent with pathways that would limit global average
temperature rise in 2100 to 2oC above pre-industrial levels.
The company’s analysis of these 2oC scenarios examined the mean
of the annual average demand growth rates of the various model
outputs between 2010 and 2040 for multiple sources of energy. This
analysis of these 2oC scenarios indicates: total energy demand
increases about 0.5 percent per year; oil demand decreases about
0.4 percent per year; natural gas demand increases about 0.9
percent per year; coal demand decreases about 2.4 percent per year;
and renewables demand increases about 4.5 percent per year.
All energy sources remain important across the assessed 2oC
scenarios to 2040. As a result of ongoing demand coupled with
natural hydrocarbon field decline, trillions of dollars of
additional investment in oil and gas production will be required,
including to meet a 2oC pathway. Based on the average growth rates
of assessed 2oC scenarios, natural gas demand is estimated to
increase to 445 billion cubic feet per day by 2040; oil demand is
estimated to decline to 78 million barrels per day by 2040.
“Our job is to supply the energy the world needs in an
environmentally responsible way,” said Darren W. Woods, chairman
and chief executive of Exxon Mobil Corporation (NYSE:XOM). “It’s a
dual challenge – we need to meet society’s growing need for energy
while addressing the risks of climate change. We are committed to
being part of the solution by investing in new technologies that
can provide economic solutions on a globally scalable basis. ”
Many experts agree that advancements will be needed to reach and
maintain a 2oC pathway through 2100. ExxonMobil has invested
billions of dollars in research and development, including multiple
university and business partnerships around the globe, aimed at
achieving the technical breakthroughs required.
“Since 2000, our investments to develop lower-emission energy
solutions have totaled about $8 billion,” Woods said. “We are
deploying technologies such as cogeneration and carbon capture and
storage, while researching next-generation solutions such as algae
biofuels and advanced carbon capture using fuel cells. Continued
research will be critical.”
With growing global populations and economies, key levers to
address the risks of climate change include further energy
efficiency improvements and reducing the GHG intensity of the
world’s energy system. “For our part, we continue to take action to
mitigate our emissions and help consumers lessen their GHG impact,”
Woods said.
ExxonMobil’s Outlook for Energy: A View to 2040 describes a
rapidly growing global population and rise in living standards in
developing countries that will drive a growth in worldwide energy
demand of about 25 percent from 2016 to 2040. At the same time,
energy efficiency gains and gradual reductions in the GHG intensity
of the energy system, will help to moderate energy use and reduce
by nearly 45 percent the carbon intensity of the global economy,
according to the report.
Emerging economies in countries that are not part of the
Organisation for Economic Co-operation and Development (OECD) will
account for essentially all energy demand growth, led by an
expanding Asia-Pacific region.
As prosperity rises, electrification continues as a significant
global trend. Energy demand for power generation accounts for about
50 percent of global demand growth, with much of that coming from
non-OECD countries.
“Natural gas use is likely to increase more than any other
energy source, around 40 percent, with about half its growth for
electricity generation,” said T.J. Wojnar, vice president for
Corporate Strategic Planning. “The abundance and versatility of
natural gas, in addition to its significant air quality benefits,
make it a valuable energy source to meet a wide variety of needs,
while also helping the world to shift to a less carbon-intensive
source of energy.”
Among the most rapidly expanding energy supplies will be
electricity from solar and wind, together growing about 400
percent.
While energy demand will grow, global carbon dioxide emissions
are likely to peak by 2040, at about 10 percent above 2016 levels,
as energy sources shift toward lower-emission fuels such as natural
gas, renewables, and nuclear.
The Outlook predicts a rise in electric vehicles as well as
efficiency improvements in conventional engines. This will likely
lead to a peak in liquid fuels use by the world’s light-duty
vehicle fleet by 2030. However, oil will continue to play a leading
role in the world’s energy mix.
“Our in-depth analysis shows that even if every light-duty
vehicle in the world was fully electric by 2040, the demand for
liquids could still be similar to levels seen in 2013,” said
Wojnar. “This is because of growing demand from commercial
transportation and the chemical sector.”
The Outlook for Energy is ExxonMobil’s long-range forecast
developed through data-driven analysis, reflecting broad knowledge
of energy markets and the expertise of economists, engineers, and
scientists. It examines energy supply and demand trends for
approximately 100 regional/country areas, 15 demand sectors and 20
different energy types. ExxonMobil uses the forecast as a
foundation for its business strategies and to help guide
multi-billion dollar investment decisions.
Key findings from this year’s Outlook:
- In 2040, oil and natural gas continue
to supply about 55 percent of the world’s energy needs; oil
continues to provide the largest share of the energy mix with
demand rising about 20 percent driven by commercial transportation
and chemicals.
- Nuclear and renewable energy sources
are likely to account for nearly 40 percent of the growth in global
energy demand to 2040.
- The share of the world’s electricity
generated by coal is expected to fall to less than 30 percent in
2040 from approximately 40 percent in 2016.
- Increasing electrification of
light-duty vehicles is anticipated to grow strongly. In total, full
hybrid, plug-in hybrid, and electric-only vehicles will be
approaching 40 percent of global light-duty vehicle sales in 2040,
compared to about 3 percent in 2016.
For more information on the Energy & Carbon Summary and
Outlook for Energy, visit www.exxonmobil.com/energyoutlook.
About ExxonMobil
ExxonMobil, the largest publicly traded international energy
company, uses technology and innovation to help meet the world’s
growing energy needs. ExxonMobil holds an industry-leading
inventory of resources, is one of the largest refiners and
marketers of petroleum products, and its chemical company is one of
the largest in the world. For more information, visit
www.exxonmobil.com or follow us on Twitter
www.twitter.com/exxonmobil.
Cautionary Statement: Statements in
the Outlook for Energy and this release relating to future events
or conditions are forward-looking statements. Actual future global
or local conditions (including economic conditions and growth,
population growth, energy demand growth and mix, energy supply
sources, efficiency gains, the impact of technology, and carbon
emissions) could differ materially due to changes in supply and
demand and market conditions affecting oil, gas, and other energy
prices; changes in law or government regulation and other political
events; changes in technology; the occurrence and duration of
economic recessions; the actions of competitors; the development of
new supply sources; demographic changes; and changes in other
assumptions or factors discussed in the Outlook for Energy and
under the heading “Factors Affecting Future Results” on the
Investors page of our website at www.exxonmobil.com. See also Item
1A of ExxonMobil’s latest Form 10-K.
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