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Louisiana Light • 4 days | 72.39 | +1.98 | +2.81% | ||
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Bonny Light • 3 days | 75.19 | +1.17 | +1.58% | ||
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Opec Basket • 4 days | 72.79 | -0.28 | -0.38% | ||
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Mars US • 2 days | 71.39 | +1.89 | +2.72% | ||
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Gasoline • 2 days | 2.501 | +0.065 | +2.65% |
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Bonny Light • 3 days | 75.19 | +1.17 | +1.58% | ||
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Girassol • 3 days | 77.03 | +1.40 | +1.85% | ||
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Opec Basket • 4 days | 72.79 | -0.28 | -0.38% |
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Peace Sour • 3 days | 64.35 | +2.01 | +3.22% | ||
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Light Sour Blend • 3 days | 65.65 | +2.01 | +3.16% | ||
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Syncrude Sweet Premium • 3 days | 74.60 | +2.01 | +2.77% | ||
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Central Alberta • 3 days | 63.95 | +2.01 | +3.25% |
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Eagle Ford • 4 days | 66.58 | +2.01 | +3.11% | ||
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Oklahoma Sweet • 4 days | 66.50 | +2.50 | +3.91% | ||
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Kansas Common • 5 days | 58.25 | -1.50 | -2.51% | ||
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Buena Vista • 13 days | 76.15 | -1.09 | -1.41% |
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Exxon’s 2040 Outlook: Fossil Fuels Aren’t Going Anywhere
Gas, Nuclear, and Renewables Will Grow the Most, in that Order
The global energy mix will not look that much different for oil and gas in 2040, according to Exxon Mobil’s (ticker: XOM) recently released 2017 Outlook for Energy: A View to 2040.
(Click to enlarge)
Source: Exxon 2017 Outlook for Energy
Both the middle class and world GDP is expected to double in the next 15 years, accelerating demand for air conditioned homes, cars, and appliances such as refrigerators, washing machines, and smart phones. Non-OECD nations, particularly China and India, will experience the most economic growth, driven by urbanization.
Oil is expected to remain the world’s primary energy source, driven by demand for transportation fuel and feedstock for the chemical industry. Plastics and other advanced materials provide advantages to manufacturers and consumers including energy efficiency gains.
Natural gas is projected to grow the most of any energy type, accounting for a quarter 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.
The World Electrifies
Increasing electrification will drive the growth in global energy demand over the next 25 years, 55 percent of energy demand growth coming from power generation to support increasingly digital and plugged-in lifestyles and electricity will grow the most of any sector.
(Click to enlarge)
Source: Exxon 2017 Outlook for Energy
Natural gas demand will increase significantly, with the fuel gaining share across all sectors due to its abundance and flexibility. Different sectors will use different types of energy based on their economic supply options and suitability to different purposes.
A wide variety of energy types will support electricity generation, with gas, nuclear, and renewables all increasing their share in the mix to offset the decline of coal.
LNG Critical to Supplying Natural Gas Net Importers
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.
(Click to enlarge)
Source: Exxon 2017 Outlook for Energy
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 percent of total gas production by 2040.
To meet increasing demand, LNG export supplies will need to diversify, with major new exports expected from the U.S., Canada, Australia, and East Africa. North America is expected to become the largest exporter due to growth in unconventional resources.
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The LNG market is expected to remain highly competitive due to abundant resources and many potential exporters, so lower cost supply sources will have the advantage.
Liquids Demand Grows 20 percent ; Don’t Forget About Conventional
Demand for liquids, covering NGLs and all liquid fuels, is anticipated to grow 20 percent through 2040, with Latin America, Africa, Russia, the Middle East, and the Asia Pacific accounting for the largest increases. Chemical demand is expected to increase in all regions.
(Click to enlarge)
Source: Exxon 2017 Outlook for Energy
As with gas, Europe and Asia are expected to account for the majority of net imports, with the U.S., Middle East, and Russia remaining major exporters
Production from tight oil, deep water, and oil sands reserves will grow to account for over 25 percent of the liquid supply, with the U.S. producing the majority of all tight oil in 2040. However, continued investment in conventional crude and condensate will also be required to offset the decline in existing fields.
Exxon estimates that continued demand for liquids through 2040 will require upwards of $450 billion to meet demand. A lack of investment will cause liquids production to decline steeply and 80 percent of the current new liquids supply is needed to offset natural declines.
By Oil & Gas 360
Oil & Gas 360
From our headquarters in Denver, Colorado, Oil & Gas 360® writes in-depth daily coverage of the North American and global oil and gas industry for…
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Fusion power will have completely usurped role of fossil-derived hydrocarbon by 2040. Incontravertable fact. I'm sure people will still oil their sewing machines and machine tools with fossil-based lubricants. Just as the electrical industry requirements for gold are very minute, the demand for heating with fossil fuels in developed countries will be vanishingly small by 2040 if it exists at all..
The reason readers are surprised by this is because the media has promoted renewables to such a degree. Result is that many believe solar and wind have already taken over, or are the process of doing so. In fact they are just a tiny fraction of total energy consumption. Solar less than half of one percent. But when polled the public thinks solar provides about 30%. The public thinks the fossil fuel industry is dying but don't realize that fossil fuels provide the same fraction of total primary energy in 2016 as they did in the 1970s.
The public is misinformed and popular media is to blame.
Wind and solar cannot survive without deep pocket government support. They are unreliable and cannot be called upon whenever needed.
And who won the last election? Someone who wants to pour more billions down the drain of unreliable and poor quality energy? Not hardly.
The big green fraud was the biggest loser.
When it comes to the energy business, it's Animal Farm all over again.
Without some significant climate changes taken place before human existence, there would have been no such a species called homo sapient on this planet. Climate change, just like storms and earthquakes, has been a natural phenomenon for 4 billion years . '
'Man made CO2 is the main cause for climate change on earth' is the most fraudulent notion in human history sanctioned by corrupted incompetent politicians, peddled by intellectual prostitutes, in order to extract taxes from the most productive people to fund the republic of parasites.
The problem with solar and wind is that it is so darn cheap, and battery storage is coming on as well. Both solar and wind are pressing into prices below $30/ MWh. The most efficient gas plants need to burn 8 mmbtu to generate 1 MWh. Thus, solar and wind put a price cap of about $3.75/mmbtu on gas and coal, and this price cap ignores recovery of capital and other O&M on fossil plants. So this price cap only applies to fully depreciated plants. For an new plant, Lazard has non-fuel cost at $26/MWh, so price for gas would need to be under $0.5/mmbtu to make the new gas plant competitive with a renewable PPA at $30/ MWh. So clearly renewables are close to shutting out new fossil generation, and exerting pricing pressure on gas and coal. What happens as solar gets cheaper? And what happens as the cost of combined solar with battery storage, which Lazard costs at $92/MWh, continues to fall? Either the price of gas and coal must continue to fall or the volume consumed must fall. For gas to remain profitable over the next 25 year it must retreat to being a niche fuel.
So the folly of Exxon's rosy volume forecast is that it is only possible if gas can continue to fall in price about 10% each year to remain price competitive with wind, solar and batteries. How many years can the gas industry go down the path of 10% fall in prices while growing supply? Eventually, the ROI gets so poor that investments decline and renewables swoop in to gain market share.
Be wary of volume forecasts. What matters is the price.
I love their product, but I can't wait to get off of it. The reasons are many and compelling: rising cost of production, health, having access to clean air and water, and -- too often overlooked -- national security. We are still a net importer of petroleum. World-wide, too many exporters use petroleum revenue to buy weapons and make war. We used to do it; now we have Russia and Iran eagerly jumping in to do some exalted person's supreme will.
Time to do something different when it comes to burning fossil fuel. There's a big picture to consider and, hopefully, a long horizon.