overtaken coal as the second most
popular fuel. Nuclear energy also will
see strong growth, expanding at about
2. 2 percent a year through 2040.
Liquids Supply by Type
Millions of oil-equivalent
barrels per day
production from oil sands in both
Canada and Venezuela. By 2040, oil
sands will account for 25 percent
of total liquids supply in North and
South America. Tight oil and natural
gas liquids (NGLs) also will see
significant growth through 2040.
On the other hand, demand for coal
is expected to peak around 2025 and
begin a gradual decline. This would
mark the first long-term decline
in global coal usage since the start
of the Industrial Revolution.
At the same time, the world will see
meaningful growth in renewable
fuels. The largest contribution will
be from wind, but solar, hydro,
biofuels, and geothermal energy
also will expand. By 2040, modern
renewable fuels will account for about
7 percent of global energy demand,
compared to 3 percent in 2010.
As a result of improved efficiency and
a shift to lower-carbon fuels, global
energy-related CO2 emissions will grow
slowly, then level off around 2030, the
report predicts. In the United States
and Europe, where a shift from coal
to less carbon-intensive fuels such
as natural gas already is underway,
emissions will decline through 2040.
Trillions in Investment
ExxonMobil uses “Outlook for Energy” as
a foundation for its business strategies
and investments. Meeting this projected
growth in energy demand will require
a tremendous level of innovation
and investment. ExxonMobil alone
expects to invest about $37 billion
each year over the next five years.
And yet, as big as these numbers are,
the company produces only about 2
percent of daily global energy supplies.
The International Energy Agency
estimates that to meet demand, global
energy infrastructure investment
will need to exceed $1.5 trillion a year
(in 2010 dollars) through 2035.
The Role of Technology
While government policies and
consumer preferences each play a role
in the evolution of energy supplies,
the biggest factor is advancements
in technology, which shape both
demand for energy and the supplies
used to meet that demand.
and refinery gains
Natural gas liquids
The impact of technology can be
seen in the U.S. natural gas market.
In recent years, the combination
of horizontal drilling and hydraulic
fracturing has enabled the energy
industry to economically access and
produce unconventional natural gas
resources, such as gas found in shale
rock. These technologies have been
in use for decades. But by combining
them, the United States has seen a
turnaround in domestic gas production
and provided the world with the tools
to unlock up to 250 years of natural
gas at current demand levels.
conventional crude production holds
relatively flat through 2040, demand
growth will be met by newer sources
(Figure 5). The biggest gains will come
from deepwater production, which
will more than double through 2040.
Interestingly, deepwater production
was in its infancy just 10 years ago;
by 2025, it will provide 10 percent
of global liquid fuels supplies.
Naturally, the future is subject to
any number of developments that
cannot be predicted with precision.
Unexpected economic or geopolitical
events can have significant impacts
on energy supply and demand, as can
government policies and the pace
of new technologies. For example, a
breakthrough in low-cost, large-scale
storage of electricity would greatly
improve the economics of wind and
solar for electricity generation. Faster
than expected drops in battery costs
could accelerate growth in electric cars.
And, of course, new combinations
of existing technologies can result in
significant changes, as demonstrated by
today’s shale natural gas production.
In addition to deepwater, there
also will be tremendous growth in
All of this goes to prove that when
it comes to energy, the future is not
predetermined. How much and what
types of energy the world will use
through 2040 and beyond depend
not just on actions taken by energy
companies, but also by those taken
by policymakers and consumers. J
The report predicts that by 2040,
unconventional gas will account
for 30 percent of global production,
up from 10 percent in 2010.
Advances in technology also will be key
to expanding liquid fuel supplies. As
Vincent Yuskiewicz is an energy advisor in ExxonMobil’s Corporate
Strategic Planning Department. He is responsible for assessing economic
and energy trends, emerging energy technologies, and related market
and public policy issues around the world. He is a principal contributor
to the company’s long-term global energy outlook, including the
identification of potential implications for energy markets and the
corporation’s strategic plans. Yuskiewicz has more than 14 years’
experience in a variety of technical and management positions involving
ExxonMobil’s activities in the United States and around the world. He can
be contacted at firstname.lastname@example.org or 972-444-1621.