Report Dec. 21, 2021
Energy – in all its forms – enables growth and prosperity. As economies grow, as technology advances, as consumers become more environmentally aware, and as policies adapt, global energy demand will evolve to meet changing needs.
Report Dec. 21, 2021
Energy supply evolves to meet demand projections
2050 global demand by fuel – quadrillion BTUs
- Oil remains the largest source of primary energy, as it is essential for commercial transportation and chemicals.
- Natural gas demand rises the most of any individual fuel source, largely to help meet increasing needs for electricity and lower-emission industrial heat.
- Most lower-emission energy sources, including nuclear, wind/solar, and biofuels, increase at the fastest pace.
- Coal is still prominent in some non-OECD countries, although global consumption appears to have peaked in 2013.
Global energy supplies vary by sector
End-use energy - quadrillion BTUs
- The energy mix will vary by sector to meet rising demand while addressing environmental impacts.
- Oil remains essential for transportation, as growing commercial transportation still relies on liquid fuels to meet more than 80% of demand.
- With a drive for cleaner and more efficient operations, the industrial sector relies primarily on electricity and natural gas for growth; industrial oil demand grows as a feedstock for chemicals, asphalt, lubricants and other specialty products.
- Electricity demand rises in all end-use sectors while the mix of fuel supply for electricity generation is shifting to lower-emission sources.
Liquids demand driven by transportation and chemicals
By region and sector – MBDOE
- Global liquids demand growth is concentrated in developing nations, with Asia Pacific accounting for about 60% of global growth by 2050.
- Efficiency gains and fuel switching in Europe reduce liquids demand by 35% from 2019 to 2050, led by a reduction of 75% in light-duty vehicle liquids demand.
- Chemicals and commercial transportation account for almost all of the liquids demand growth, with chemicals expected to double from 2019 to 2050 and commercial transportation to increase by one-third.
Liquids are projected to remain the world’s leading energy source in 2050, even as demand growth slows beyond 2025.
Commercial transportation and chemicals - sectors where liquid fuels are favored for their high energy density and distinctive chemical properties - drive liquids demand growth. Overall, demand for liquids is expected to rise about 14 million barrels per day by 2050 with almost all of the growth in the emerging markets of Asia, Africa, the Middle East and Latin America.
New investments in oil production - and in technologies to improve recoverability, enhance efficiency and reduce cost - are needed to offset natural production decline and meet rising demand. Much of the growth in liquids production is expected to be from sources of supply that have been unlocked by technology advances in the past two decades: North American tight oil and the natural gas liquids associated with unconventional oil and gas production, and deepwater projects offshore Brazil and Guyana, for example.
Continued investment in conventional crude and condensate is required too as the Middle East and Russia/Caspian remain significant oil producing regions helping meet the needs of consumers worldwide.
Liquids supply highlights the need for investment
Global liquids supply by type – MBDOE
Liquids supply highlights regional diversity
By region and type – MBDOE
- The natural decline rate of existing oil production is 7% per year. Significant investment is needed to offset this decline and meet the projected demand growth.
- In 2019, conventional crude and condensate made up about two-thirds of the liquid supply. By 2050, new investment is expected to have diversified oil supply such that only about half of liquids will come from these conventional sources.
- Tight oil is also rich in natural gas liquids, so tight oil growth brings significant new supplies of NGLs.
- Biofuels more than double, with increasing demand for lower-emission liquid fuels and technology advancements that reduce costs and land use.
- North America tight oil and associated NGLs production increases by a third from 2019 to 2030. This significant growth solidifies North America as a net exporter of liquids.
- The Middle East and Russia/Caspian continue to invest in conventional oil production and tight oil to maintain their role as leading exporters, at about two-thirds of their production in 2050.
- Asia Pacific remains the largest and fastest-growing region for liquids demand, and increasingly relies on imports.
- Biofuels production grows across all continents to about 5 million barrels per day of oil equivalent in 2050 to address emissions from hard-to-abate end use.
Natural gas plays a vital role in satisfying the energy needs of consumers worldwide while helping to mitigate the risks of climate change.
Choosing natural gas as a lower-carbon alternative to coal improves air quality and reduces carbon intensity.
Natural gas is abundant and versatile. It is a reliable and flexible fuel for electricity generation, a lower-carbon industrial fuel and convenient for home use. Natural gas grows more than any other energy source, rising from 24% of global energy supply in 2019 to 28% in 2050.
Natural gas resources are geographically and geologically diverse. North America’s unconventional gas resources are produced by applying horizontal drilling and hydraulic fracturing technologies. The Middle East and Africa are expected to tap large conventional natural gas resources. Natural gas production is expected to grow in every region except Europe.
Natural gas trade is a critical link between resource-rich regions and demand centers in Asia Pacific and Europe. New liquefied natural gas export projects are expected to diversify the market and meet 55% of the growth in natural gas demand to 2050.
Natural gas grows in industry, electricity generation, and transportation
World – BCFD
- Natural gas is well suited for homes, businesses and electric utilities seeking versatile, lower carbon energy.
- Abundant and convenient, natural gas grows more than any other single source of primary energy during the Outlook period.
- Two-thirds of the growth in natural gas demand is for electricity generation, and one-quarter is for industrial use.
- Residential users rely on natural gas for heating and cooking.
- Increased penetration of natural gas-fueled buses and trucks can help urban areas manage air quality.
Natural gas is growing, but coal is still predominant in non-OECD Asia
2050 - Quadrillion BTUs
Coal-to-natural gas switching reduces emissions
2050 - Global share
- Natural gas rises in prominence as a cleaner-burning alternative to coal over the Outlook period.
- In China and other Asia Pacific non-OECD nations together, gas demand doubles from 2019 to 2050. Coal still plays a significant role in the region.
- Coal demand grows by 50% in non-OECD Asia Pacific countries outside China, partially offsetting major strides to reduce the use of coal in the OECD and China.
- Outside of Asia Pacific, many developing countries are expected to leverage domestic natural gas supplies to meet rising electricity demand and fuel industrial growth.
- In 2050, coal is expected to meet about 15% of global energy demand and produce 30% of energy-related CO2 emissions.
- With the same boiler efficiency, burning natural gas to produce heat emits about 40% less CO2 than burning coal.
- Choosing flexible, highly efficient gas-fired electricity generation to replace older, inefficient coal plants can reduce CO2 emissions by up to 60% while producing fewer air pollutants.
- Every 1% of global primary energy shifted from coal to natural gas can reduce energy-related CO2 emissions by almost 1% in 2050.
Gas supply diversifies and trade grows to meet rising demand
Share of supply growth 2019-2050
- North America’s abundant unconventional natural gas is expected to feed new LNG projects and meet growing local demand.
- Africa’s natural gas production could drive economic growth and prosperity, as demand and exports are poised to accelerate, led by Mozambique, Nigeria, Algeria and Egypt.
- Russia/Caspian and the Middle East together are anticipated to retain almost half of interregional gas trade by further investing in export projects; both regions are well positioned to expand pipeline exports in addition to LNG trade.
- Europe is likely to continue to rely on natural gas trade to meet consumer demand as local production declines.
- In 2019, Asia Pacific’s LNG imports were larger than all other regions’ combined; by 2035, the region’s total natural gas demand will likely surpass North America’s; and in 2050, LNG trade is expected to meet over half of Asia Pacific’s natural gas demand.
Asia Pacific benefits from LNG imports
BCFD LNG Imports
Diverse natural gas supplies underpin new LNG exports
BCFD LNG Exports
- In 2019, LNG trade met about 10% of global natural gas demand; by 2050, LNG trade will meet nearly 20% of the world’s natural gas needs.
- Asia Pacific absorbs about 90% of the growth in LNG from 2019 to 2050, helping the region to reduce its carbon intensity while sustaining economic growth.
- China’s ‘war on smog’ and ‘blue-sky’ policies have led to measurable improvements in urban air quality while boosting demand for LNG imports.
- India and other Asia Pacific importers are expected to look to LNG to supplement domestic natural gas production, often leveraging existing natural gas infrastructure.
- Europe is expected to tap competitive LNG to diversify its natural gas import portfolio.
- In 2019, 75% of LNG exports originated in Asia Pacific, the Middle East or Africa.
- North America’s LNG exports are projected to grow the most as low-cost unconventional gas production prompts investment.
- East Africa, Qatar and Russia projects are expected to expand and diversify LNG exports.
- The LNG market is expected to remain highly competitive due to abundant natural gas resources and many aspiring exporters.
- The diversity and reliability of LNG supplies, combined with the flexibility to ship it where it is needed, make LNG a favorable choice for nations needing dependable, lower-emission energy sources to foster economic growth.
Global oil supply and demand
Global natural gas supply and demand
- With oil and gas a key part of the future energy mix across all of the assessed 2°C scenarios and the IEA NZE scenario, it is important to consider the investments needed to meet society’s demand.
- Without continued investment to sustain existing producing fields and develop new resources, the supply of oil and natural gas declines, with oil supply naturally declining at an estimated 7% per year, and natural gas declining at an estimated 5% per year.
- As shown in the charts, these decline rates create a significant need for continuous investment just to sustain existing production levels observed in 2019. The natural rate of decline for oil and gas far exceed the range of demand projections out to 2050. Ceasing to invest in either oil or gas could lead to a significant supply shortfall versus what is needed to meet global demand, both for the near term and for the broad range of scenario demand projections.
Global fundamentalsEnergy is essential for human progress. Economic expansion and improving access to energy enable longer, more productive lives for the growing global population.
Outlook for Energy Report • Dec. 21, 2021
Energy demand: Three driversPolicy. Technology. Consumer preferences. All three impact how the world uses energy. Each driver influences the other. The interplay among these can vary depending on local circumstances (available resources, public support) and can change over time. At ExxonMobil, we’re continually studying energy demand and developing models that measure its potential impact — all in an effort to gain a deeper understanding of the interconnectivity of the global energy system.
Outlook for Energy Report • Dec. 21, 2021
EmissionsProviding reliable, affordable energy to support prosperity and enhance living standards is coupled with the need to do so in ways that reduce impacts on the environment, including the risks of climate change.
Outlook for Energy Report • Dec. 21, 2021