ExxonMobil declared at the weekend that the global oil demand would increase by 25 per cent by 2040 as new supplies, particularly from North America, meet the needs of a booming and energy-hungry population.
The US supermajor, which said this in its annual energy forecast maintained that energy demands would be about 35 per cent higher in 2040 compared to 2010, but will be tempered by increasing efficiencies in energy use, ExxonMobil said in the outlook released last Thursday.
Without gains in energy efficiencies, “demand could have risen by more than 100%”, the company said.
The world’s population will hit nine billion in 2040, up from the current seven billion, as the global economy doubles in size, driven by higher living standards in the developing world.
Oil and gas will continue to meet about 60% of the world’s energy needs in 2040, according to ExxonMobil, and liquid fuels will continue to be the “energy of choice” for most types of transportation due to their affordability and utility.
By 2040, about 65 per cent of the world’s recoverable crude and condensate resource will have yet to be produced, the company said.
Over that time, North America will become one of the world’s leading producers of liquids and is projected to grow its output by 40 per cent in the coming decades, as it shifts from a major importer to “a fairly balanced position by 2030.”
US oil production hit a 25-year peak in November at about 8 million barrels per day on the back of booming unconventional output, according to the US Energy Information Administration. Production from tight formations, deep-water and oil sands will keep the continent humming through 2040 and beyond, ExxonMobil said.
Production from the oil sands of Canada is expected to grow by more than 200 per cent through 2040, while tight-oil and natural-gas-liquids output in North America will jump by nearly 35 per cent.
The story is similar worldwide, and tight-oil will lead the way, ExxonMobil said. Global production from tight formations is expected to increase by 1000% from 2010 to 2040 and will account for 5% of global liquids output. Russia will likely join the US as one of the top producers of tight oil.
Latin America would almost double its oil production as new sources in Venezuela and Brazil come online. The Middle East, driven by conventional oil in Iraq, also stands to add about 35 per cent to its liquids production, representing the largest absolute growth in liquids production through 2040.
Africa could see an uptick of about 10 per cent as deep-water fields off Angola and Nigeria start to pump oil. Deep-water supplies worldwide are expected to grow by more than 150 per cent, ExxonMobil said.
NGLs will contribute the most to liquids output, with production of fuels like ethane, propane and butane expected to grow by 80 per cent.
Even as massive volumes of liquids are produced, natural gas will be the fastest growing major fuel source through 2040, ExxonMobil said. Gas will account for more than 25 per cent of all global energy needs by 2040 and is expected to overtake coal as the largest source of electricity.