ExxonMobil predicts energy demand across the world will soar 35% by 2040, compared to 2010, with oil and gas supplying about 60% of that demand.
The forecast comes as technology continues to fuel production of more energy-efficient resources. The demand and supply pattern also is expected to open doors for more global trade. The future holds opportunities for North America, which ExxonMobil predicts will transition from being a net energy importer to a net exporter as early as 2025.
ExxonMobil also expects North America to become a net exporter of oil and oil-based products, as domestic oil demand falls, mostly resulting from improved transportation efficiencies and increases in liquids supplies. And Canada could be the primary driver of oil exports.
“In North America, we expect unconventional gas production will grow substantially as expected,” William Colton, vice president of corporate strategic planning, for ExxonMobil, said during a Dec. 11 conference call. “The growth in unconventional supplies is a result of recent improvements in technologies to tap these resources. This will almost eliminate the need for oil imports in North America and make LNG available for Europe and Asia Pacific.”
The technology includes use of hydraulic fracturing, a technique that has been around for decades in the oil and gas industry, and horizontal drilling to unlock resources from shale plays.
“A decade ago there was little idea that the pooling of similar technologies would lead so quickly to today’s unprecedented growth in unconventional oil and gas,” Colton said. “And who can imagine what breakthroughs could emerge in the future and how that might benefit us all. Human creativity and ingenuity will always be the most fundamental driver of progress.”
The company expects total liquids to rise globally to about 113 MMb/d by 2040, nearly a 30% increase from 2010. That growth is being pushed by technology-advancing production levels in deep water, tight oil, and NGL.
“Deep water was barely on the radar screen 10 years ago and [deepwater drilling] activity is expected to more than double by 2040. The same is true for tight oil, which is growing as a result of recent advances in technology that have enabled our industry to unlock oil found in tight rock formations,” Colton said. “The advances are very similar to the ones that have enabled growth in unconventional natural gas.”
Such advances are enabling the shift from conventional crude oil, which could make up 55% of the world’s liquids fuel supply by 2040. Deepwater, tight oil, oil sands, NGL, and biofuels will fulfill the rest of the need. But the future could look even brighter if operators are able to tap into more potential resources, considering ExxonMobil believes less than half of the recoverable oil in the world will be produced by 2040.
Unconventionals are expected to lead the global gas supply, providing about 60% of the growth by 2040, Colton said. Leading the pack will be shale gas, followed by coalbed methane and tight gas.
More than half of the growth in unconventional gas will come from North America, Colton added.
“We’re already seeing a positive and significant impact from new investments that are helping to provide reliable, affordable energy supplies for consumers and businesses as well as an abundance of new job opportunities in many areas,” he continued. “Unconventional production in other parts of the world is expected later and is definitely more uncertain in terms of size and the timing of developments.”
But the demand for energy is a certainty. The outlook projected energy for electricity generation would make up the largest chunk of demand, growing 50% by 2040, as developing countries try to provide more than 1 billion people access to electricity.
The fuel mix will be comprised of about 30% gas. Nuclear power and renewables also are expected to gain a greater share as climate change policies facilitate a shift to cleaner fuels. China, for example, plans to add more than 200 GW of nuclear capacity by 2040, according to ExxonMobil.
Both oil and gas demand is projected to increase in the Asia Pacific region. Oil demand could grow by more than 60% by 2040, with imports possibly reaching 35 MMb/d, and oil demand could increase by 150%, Colton said. “The region’s dependency on imports grows close to 80% by 2040, and China continues as the largest single driver of the global oil trade.”
“Meeting the energy challenge through 2040 also requires an unprecedented level of investment, an estimated $1.5 trillion a year,” Colton said, “but with that is an opportunity to provide significant value around the world.”
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