While renewables get a great deal of attention – and for good reason — oil is expected to remain the world’s primary energy source through 2040, meeting roughly 33% of demand, according to ExxonMobil’s recently released 2017 Outlook for Energy: A View to 2040.
The use of oil will be driven by need for transportation fuel and feedstock for the chemical industry.
Natural gas is projected to grow the most of any energy type, accounting for 25% of all demand by 2040. Coal will remain important but will lose a significant amount of its share as the world transitions to cleaner energy, ExxonMobil (XOM) projects.
Nuclear energy and renewables will grow about 50% and be approaching a 25% share of the world’s energy mix, according to the Outlook.
“By 2040, world population is expected to reach 9.1 billion, up from 7.3 billion today,” the Outlook states. “Over that same period, global GDP will effectively double, with non-member countries of the Organization of Economic Cooperation and Development (OECD) seeing particularly high levels of economic growth. This means rising living standards in essentially every corner of the world, and billions of people joining the global middle class.”
Economic expansion, coupled with growing numbers of people, will help drive up global energy demand by about 25% by the year 2040, similar to adding another North America and Latin America to the world’s current energy demand, Kallanish Energy understands.
“The world will need to pursue all economic energy sources to keep up with this considerable demand growth,” the Outlook states.
Increasing electrification will drive the growth in global energy demand over the next 25 years, 55% of energy demand growth coming from power generation to support increasingly digital and plugged-in lifestyles, ExxonMobil’s Outlook projects.
Natural gas demand will increase significantly, with the fuel gaining share across all sectors due to its abundance and flexibility.
Evolving natural gas supply and demand will also cause gas trade balances to shift, with North America, Russia, and the Middle East being net gas exporters by 2040.
Asia-Pacific will continue to be the largest gas importer despite growing production, with regional gas demand doubling by 2040. Demand in Europe will also grow as regional gas production there declines. Unconventional gas is expected to account for 33% of total gas production by 2040.