Realistic Choices in Future Energy Investments

We expect energy demand to rise significantly through 2020, even with substantial gains in the efficiency of energy use. And a major reason for this growth will be greater energy use in the developing world, where modern energy underpins the relatively rapid economic progress that is likely to occur.

What we have seen, continue to observe, and expect in the future is that economic growth will be dependent on adequate energy, and that growth will drive future increases in energy demand.

We expect energy demand to rise significantly through 2020, even with substantial gains in the efficiency of energy use. And a major reason for this growth will be greater energy use in the developing world, where modern energy underpins the relatively rapid economic progress that is likely to occur.

Meeting this growing demand will be a broad portfolio of energy options, but despite rapid growth in some alternative energy options, the greatest growth will be in oil and natural gas.

In fact, we expect these sources to provide about 60 percent of the energy used in 2020, which is similar to today’s share. But more important, oil and gas will be a much greater volume of energy, in fact, about 40 percent larger.

During this outlook period, the resources will be available to meet that larger demand, but they will not become available automatically — we will have to advance the technology and have the policies that will make the resources available and economic to develop.

Natural gas deserves special mention. It is likely to capture about one-third of all incremental energy growth through 2020. One of its key advantages is lower carbon dioxide emissions as compared to coal in power generation applications.

Oil demand will also grow, rising primarily due to factors such as a greater and greater worldwide car population, which will more than offset efficiency gains made in developed countries.

And while alternative energy supplies from wind, solar and biofuels will grow rapidly, especially in light of public subsidies both here and in the United States, these sources too will face limitations and through 2020 will still remain small contributors overall.

As important as the global increase in energy needed will be the location of the resources to meet that energy need.

Exxon