Global fundamentals

Energy is essential for human progress. Economic expansion and improving access to energy enable longer, more productive lives for the growing global population.

Report Dec. 21, 2021

Global fundamentals

ExxonMobil’s business planning is underpinned by a deep understanding of long-term energy fundamentals.

These fundamentals include energy supply and demand trends, the scale and variety of energy needs worldwide; capability, practicality and affordability of energy alternatives including lower-emission solutions; greenhouse gas emission-reduction technologies; and supportive government policies. The Company’s Outlook considers these fundamentals to form the basis for long-term business planning, investment decisions, and research programs. 

The Outlook reflects the Company’s view of global energy demand and supply through 2050. It is a projection based on current trends in technology, government policies, consumer preferences, geopolitics, and economic development.

What’s the difference between a projection and a scenario?

The Outlook projects ExxonMobil’s view of future energy supply and demand. It starts with current factors, such as policy and commercially available technology, and estimates how they might change over time. In contrast, many scenarios start with a hypothetical outcome and work backward to identify the factors that need to occur to achieve that outcome.

How are the Outlook and scenarios being used?

ExxonMobil uses the Outlook as the basis for developing plans. The Company considers scenarios including the Intergovernmental Panel on Climate Change Lower 2°C and the International Energy Agency Net Zero Emissions by 2050 to help inform its thinking on the resiliency of its assets and the opportunities to evolve its businesses.

How do Scenarios inform?

To effectively evaluate the pace of change, ExxonMobil uses many scenarios to identify signposts that provide leading indicators of future developments and allow for timely adjustments to the Outlook.

Society’s progress is intrinsically related to energy. Access to safe, reliable and affordable energy is a critical enabler of higher living standards, including a longer and healthier life. Today a significant portion of the global population still faces serious challenges in accessing energy on a daily basis, negatively impacting health and preventing many from fully realizing their potential. The challenges become even greater considering that by 2050 the global population is projected to grow to almost 9.7 billion from 7.7 billion today.

Improving access to energy and a growing global economy will lead to better economic opportunities, higher incomes and improved living conditions for many. As countries move up the human development index, the improving living standards are associated with increased energy use. Today, more than 40% of the global population lives in countries that rank low to medium on the U.N.’s human development index1. Advancing development for such a substantial part of the global population, creates the potential for significant global energy growth.

1 UN  Development Programme Website: http://hdr.undp.org/en/indicators/

Population

Billions

Image Population

Energy per capita

Million BTUs /capita

Image Energy per capita

Energy demand growth

Quadrillion BTUs 2019 – 2050

Image Energy demand growth
  • Global population grows to 9.7 billion in 2050 from 7.7 billion today.
  • About 65% of this growth is in Africa and the Middle East, more than 25% in Asia Pacific, and just under 5% in OECD countries.
  • Efficiency gains reduce energy use per capita in the developed world whereas the developing world increases its energy per capita in pursuit of improved living standards. 
  • Global demand is expected to rise 15% by 2050 as developing nations add four times what is reduced by developed countries.

Non-OECD leads GDP growth

Trillions of 2015 dollars GDP 2019-2050
Image Non-OECD leads GDP growth
  • Economic expansion is a key driver of energy demand. World GDP is projected to more than double from 2019 to 2050 with the non-OECD (developing nations) growing at more than twice the rate of the OECD (developed countries).
  • By 2050, the non-OECD countries will account for almost 55% of global GDP, up from about 40% today. China’s growth from 2019 to 2050 is similar to the entire OECD growth.
  • The widespread non-OECD economic expansion suggests continued robust energy demand in these economies.
  • GDP for the OECD countries grows at a slower pace but from a much higher base than the non-OECD countries.

Purchasing power expands

GDP per capita – thousands of purchasing power parity dollars
Image Purchasing power expands
  • Access to energy enables economic progress and improves quality of life. As income grows, it enables a family to own a home, purchase labor-saving appliances, pursue an education, travel and obtain needed medical treatment.
  • As GDP grows faster than population around the globe, average personal incomes rise everywhere, albeit with significant country and regional variations.
  • By 2050, China GDP per capita is expected to more than triple and be at about 75% of the OECD.
  • Over the Outlook period, India's per capita GDP is likely to grow even faster than China, but India’s GDP per capita level remains below the global average.
  • Africa per capita GDP adds 50%, yet in 2050 is still at around 10% of the higher-income OECD average.

Middle class almost doubles

Global middle class – billions of people
Image Middle class almost doubles

Source: Brookings Institution

  • Even though the average income in the non-OECD countries remains lower than in the OECD, there is already a burgeoning middle class that can afford more than the basic necessities of food and shelter. The Brookings Institution foresees continued rapid growth of the global middle class, with billions more people rising out of poverty by 2030.
  • Asia Pacific represents the largest growth, with India and China each expected to have more than 1 billion middle-class citizens by 2030.
  • The expanding middle class means billions of people will aim to improve their living conditions and access to energy is a critical enabler for these aspirations.

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