As global population increases, efficiency and technology need to help reduce the energy demand curve.
Looking to the future Image: ExxonMobil |
ExxonMobil's 2018 Global Outlook for Energy reinforces the challenges faced by the energy industry in general, and oil and lubes producers in particular, as world population increases, emissions regulations tighten and demand needs to be contained.
According to the report, without energy savings from global efficiency improvements, energy demand could nearly double by 2040, led by non-OECD nations China and India. However, Exxon believes these improvements are already happening and likely to continue, showing a much more positive 25% increase in overall demand from 2016 to 2040.
At the same time as efficiencies, the move towards less carbon-intensive energy sources will also drive an almost 45% drop in carbon intensity of global GDP, with energy-related CO2 emissions likely to peak in 2040 some 10% higher than 2016 levels, the Report claims.
Naturally, there will still be a place for oil, with Exxon seeing it taking a leading role in commercial transportation and the chemical industry, although it suggests liquid fuel demand will peak for light vehicles by 2030. Projections include heavy-vehicle growth being the largest in the transport sector up to 2040 by volume, with aviation seeing the largest percentage increase.
Given the projections that global population could double by 2040 to around nine billion, Exxon highlights the significant challenges now faced in attempting to hold an increase in global temperature to 2oC or less - as set in the Paris Climate Agreement in 2015. One critical solution in reaching that goal will be through the use of technology, in particular for the energy supply chain.