While many call for a severe shift from fossil fuel use by 2030, ExxonMobil released its annual Global Outlook, which counters the notion of a diminishing oil and gas industry. Instead, its analysts foresee an approximate 100 million b/d demand that will continue through 2050 and warned that disinvestment in oil and gas could bring severe disruption to everyday life paired with critical energy shortages.
Exxon admits its Global Outlook is centered around its own forecasting methods instead of utilizing measurements made by groups like the International Energy Agency, which foresee a much smaller role played by oil and gas in the future of the energy sector. Although the IEA fossil fuels make up 46 percent of the future energy basket, Exxon sees a slight reduction from 56 percent in 2030 to 54 percent in 2050. Overall, all forms of energy will have individual place holdings in the Global Outlook forecast.
Report framework
Exxon’s Global Outlook features a framework of energy sources and how they contribute in 2050. It includes fossil fuels and alternative energy sources.
- All energy forms will be drawn upon in 2050.
- The quickest growth cycle will apply to renewables.
- Coal will see the most significant decline.
- No matter the circumstances, oil and gas will remain essential to energy production.
- Although low-carbon technology requires policy and regulation support to see increased growth, the market must support the demand.
Addressing the energy transition
Exxon acknowledges the energy transition is a revolution that has gained traction and will continue to grow. It, however, maintains that growth should be practical in nature. With population growth expected to increase from eight billion to ten billion by 2050, petroleum products will help shore up manufacturing and offset any fuel reductions due to policies waged at rectifying climate change effects.
“The large majority of the world’s oil is and will be used for industrial processes, such as manufacturing and chemical production, along with heavy-duty transportation like shipping, trucking, and aviation,” said Exxon. “These services are needed for modern life—and they also fuel future economic growth in the developing world.”
Although Exxon supports the need for greater fossil fuel use in 2050, it still sees energy transition measures increasing in capacity. Global carbon emissions are expected to taper off in 2030, with a further decline of 25 percent by 2050. This should be made possible through efforts levied at gains in efficiency, renewable energy use, and efforts developed in carbon capture and storage technologies.
Down the road
According to Exxon’s Global Outlook, nearly half of the global population lives below the company’s “modern energy minimum,” with the pitfalls being energy shortages in housing, infrastructure, the workplace, and mobility. Its data supports a 15 percent increase in energy use across the globe to ensure reliable energy worldwide as we ramp up to 2050.
This usage increase will be fueled by a 25 percent increase directed at developing countries whose energy challenges consist of risks associated with limited electricity limitations, harmful cooking fuels, and poverty. Developed countries, however, are expected to make efficiency improvements that spark decreased energy use.
As the energy transition grows in popularity and need, the demand for fossil fuels is expected to remain relevant and strong. As time continues and geopolitical uncertainty mounts, potential outcomes could alter. Betting on the sequence of events present in today’s society, Exxon sees a more practical approach to energy supply with a large emphasis on fossil fuels, but in partnership with the energy transition.
Nick Vaccaro is a freelance writer and photographer. In addition to providing technical writing services, he is an HSE consultant in the oil and gas industry with twelve years of experience. Vaccaro also contributes to SHALE Oil and Gas Business Magazine, American Oil and Gas Investor, Oil and Gas Investor, Energies Magazine and Louisiana Sportsman Magazine. He has a BA in photojournalism from Loyola University and resides in the New Orleans area. Vaccaro can be reached at 985-966-0957 or [email protected].
