Peak Oil is You
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Page added on December 10, 2014
Exxon: Oil will account for 32% of world energy by 2040
North America, once a sponge that sucked in a significant portion of the world’s oil, will instead be supplying the world with oil and other liquid hydrocarbons by the end of this decade, according to ExxonMobil’s annual long-term energy forecast.
And the “almost unspeakable” amount of natural gas found in recent years in the US and elsewhere in North America will be enough to make the region one of the world’s biggest exporters of that fuel by 2025, even as domestic demand for it increases, according to Bill Colton, Exxon’s chief strategist.
“The world has such an improved outlook for supplies,” Colton said in an interview. “Peak oil theorists have been run out of town by American ingenuity.”
In a forecast that might make economists happy but environmentalists fret, Exxon’s two chief products, oil and natural gas, will be abundant and affordable enough to meet the rising demand for energy in the developing world as the global middle class swells to 5 billion from 2 billion and buys energy-hungry conveniences such as cars and air conditioners.
This is a result of advances in drilling technology that have made it possible for engineers to reach oil and gas in unconventional rock and extreme locations and quieted talk that the world was quickly running out of oil.
And it is despite what Exxon assumes will be increasingly strict policies around the world on emissions of carbon dioxide and other gasses emitted by fossil fuel use that scientists say are triggering dangerous changes to the world’s climate.
Exxon’s outlook forecasts world energy supply and demand through 2040 and is updated every year. It is noted by investors and policymakers and used by Exxon to shape its long-term strategy. Colton said the recent sharp decline in oil prices does not have much effect on the company’s long-term vision, and that the company expects prices to rise and fall, sometimes dramatically, throughout the period.
Exxon’s vision is broadly similar to that of other forecasters, including those by the International Energy Agency, which released its most recent long-term forecast last month. Demand for energy will grow rapidly in coming decades in the developing world, while demand in the developed world is expected to be flat or even decline as countries impose stricter emissions policies and become more efficient.
The use of coal, now the world’s second most important fuel after oil, will eventually slip as countries try to reduce air pollution and greenhouse gas emissions. Natural gas, which burns cleaner than coal and emits half the global warming gases as coal, will supplant coal in the number two spot.
Exxon takes a relatively dim view of the prospects for renewable energy, however. It believes that some of the aggressive targets for renewables cited by governments are too expensive to come to fruition, and the technologies have not advanced far enough to make them cheap or effective enough for broad adoption globally.
“They are just not ready for prime time,” Colton says.
While Exxon expects wind, solar and other non-hydro electric energy to grow faster by far than any other energy technology over the period, those renewables will provide just 4 percent of the world’s energy by 2040, up from 1 percent in 2010. Fossil fuels will still dominate: Oil will account for 32 percent of world energy, natural gas for 26 percent, and coal for 19 percent. Nuclear and biomass will account for 8 percent each, and hydroelectric power will account for 3 percent.
Michael E. Mann, a climate scientist and director of Penn State’s Earth System Science Center, notes that many experts dispute Exxon’s conclusion on renewables because in several places around the world renewable energy is competitive with the price of traditional power, even without a high price on carbon pollution that Exxon and others seem to agree is coming.
Scientists say if Exxon’s vision comes to pass the world’s climate system will become dangerous and chaotic, and some environmental economists suggest that economies will be forced to stop burning fossil fuels at such high rates to prevent catastrophic climate change.
“Exxon’s vision of a fossil fuel-driven future is one in which carbon dioxide levels rise well beyond the dangerous limit, where we will witness fundamental threats to food, water, land, our economy, national security, and our environment,” Mann says. “Let us hope, for the sake of us and our planet, that this is not our future.”
Other recent scientific studies have raised questions about whether oil and gas companies and government forecasters are overestimating how much oil and gas is accessible in the shale formations that have fueled the US boom in oil and gas production.
Ken Cohen, Exxon’s government and public affairs chief, says the studies “are not consonant with the facts.” He says Exxon is finding instead that improving technology is increasing productivity of each well they drill.
That will mean that the end of the decade, North America will be exporting more oil and liquid hydrocarbons than it imports, a remarkable turnaround for a region that was a major global importer.
“Limitations are political and policy-related more than technical,” Cohen says.
13 Comments on "Exxon: Oil will account for 32% of world energy by 2040"
MSN Fanboy on Wed, 10th Dec 2014 5:56 pm
Is this net energy? LOL
Rip this article apart shortonoil 🙂
Speculawyer on Wed, 10th Dec 2014 5:59 pm
I’m thinking lower. The price of oil is going to go up and the price of batteries is going to keep coming down (though not as fast as we would like). That is going to push a lot of people toward various plug-in cars (BEVs & PHEVs) since they are dirt cheap to fuel. Meanwhile, residential solar PV penetration will continue to increase. And when you get solar PV, you get the urge to get an EV so you can ‘drive on sunshine’. But the aviation, trucking, and maritime markets will remain largely oil-based.
But the light-duty transport market is pretty easy to electrify with PHEVs and BEVs . . . especially if oil prices go up a bit more and battery prices come down just a little bit more.
Plantagenet on Wed, 10th Dec 2014 6:37 pm
@Speculawyer
The price of oil is going down—not up. Check out the news sometime and you’ll find that Oil has dropped 40% in just the last four months.
Rather than high oil prices driving people towards EVs and PHEVs, the low price of oil is going to hurt EV sales. SUV sales have already picked up in the US due to the low gasoline prices.
This would be a good time to raise gas taxes to raise funds to support mass transit and such, but the lack of leadership and political cowardice from obama and others in DC makes that kind of forward thinking impossible.
Westexasfanclub on Wed, 10th Dec 2014 6:54 pm
What a dystopian nightmare are they describing here? If the world would and could grow along those absurd lines there would only be one result: An even more nightmarish peak. But in 2045 they certainly will start importing hydrocarbons from Titan…
In stead of extrapolating BAU the author could at least have offered the vision of using all that fantastic, bombastic, superelastic hydrocarbon surplus to create a really sustainable economy. But don’t worry, in 2100, when Titan is running out of oil, it will be proven that the abiotic theory was right and that we are virtually living on a panet made of oil!
Oil will be recognized as the primary energy source of the universe! The word black hole will get a totally different significance! Drill Scotty, drill!
cualcrees on Wed, 10th Dec 2014 6:58 pm
“Peak oil theorists have been run out of town by American ingenuity.”
LOL
shortonoil on Wed, 10th Dec 2014 7:30 pm
“The world has such an improved outlook for supplies,” Colton said in an interview. “Peak oil theorists have been run out of town by American ingenuity.”
Definitely, Exxon is going to flood the world with $20 oil, and $2 gas. They will do it right before they go into receivership. It is interesting that most people can understand that oil production increases until it hits a peak, and then declines. Most people have no problem accepting that scenario; petroleum is a finite commodity. But, when the same logic is applied to the price of oil it is immediately rejected. With no shortage of resource, the price must decline for production to decline, and that is what we are witnessing at this point in the life cycle of petroleum.
http://www.thehillsgroup.org/depletion2_022.htm
$100 oil was the Peak, and it is never coming back. The much lower quality product now hitting the market is not worth the price tag that the oil companies need to charge to cover its production. What they have left is a product that no one can afford. If Mr. Colton is marketing EXXON he is doing it on the wrong planet. There will be very few remaining on earth by 2040 who will be able to afford his products.
http://www.thehillsgroup.org/
Makati1 on Wed, 10th Dec 2014 8:06 pm
I got suckered in on the absurd proclamation of the headline. After the first sentence, I stopped reading the propaganda. Waste of time.
Bob Owens on Wed, 10th Dec 2014 8:35 pm
Just before the stock market crash of 1929 it was said that the stock market would ascend unto heaven. Exxon’s views in this article are at least as positive. No facts, just smooth good-talk. We are swimming in oil and gas and will be a major exporter by the end of the decade! Can it get any better? Only in our dreams.
Speculawyer on Wed, 10th Dec 2014 8:47 pm
“@Speculawyer The price of oil is going down”
Yeah, I’m gonna go out on a limb here and predict that we are going to be up above $100/barrel long before 2040. Probably before 2017 actually.
And yes, we really SHOULD raise gas taxes right now but the right has made that into political suicide.
Apneaman on Thu, 11th Dec 2014 12:08 am
“There will be very few remaining on earth by 2040 who will be able to afford his products.”
That’s because there will be very few remaining period.
Makati1, Hopium – it never changes
“We will not have any more crashes in our time.”
– John Maynard Keynes in 1927
“I cannot help but raise a dissenting voice to statements that we are living in a fool’s paradise, and that prosperity in this country must necessarily diminish and recede in the near future.”
– E. H. H. Simmons, President, New York Stock Exchange, January 12, 1928
“There will be no interruption of our permanent prosperity.”
– Myron E. Forbes, President, Pierce Arrow Motor Car Co., January 12, 1928
“No Congress of the United States ever assembled, on surveying the state of the Union, has met with a more pleasing prospect than that which appears at the present time. In the domestic field there is tranquility and contentment…and the highest record of years of prosperity. In the foreign field there is peace, the goodwill which comes from mutual understanding.”
– Calvin Coolidge December 4, 1928
“There may be a recession in stock prices, but not anything in the nature of a crash.”
– Irving Fisher, leading U.S. economist New York Times, Sept. 5, 1929
Black Tuesday–Stock Market Crash of 1929, began in late October 1929
dashster on Thu, 11th Dec 2014 5:23 am
ExxonMobil, like the other large oil companies, has peaked in oil production. The future is rosy for oil, but they are past peak?
Kenz300 on Thu, 11th Dec 2014 8:54 am
Exxon is the number one fossil fuel cheer leader…. and they are doing all they can to limit competition from alternative energy sources.
Alternative energy sources are growing in use around the world and are our only hope for dealing with Climate Change.
“Exxon’s vision of a fossil fuel-driven future is one in which carbon dioxide levels rise well beyond the dangerous limit, where we will witness fundamental threats to food, water, land, our economy, national security, and our environment,” Mann says. “Let us hope, for the sake of us and our planet, that this is not our future.”
———————
Wind Energy Provides More Than Two-Thirds of New US Generating Capacity in October
http://www.renewableenergyworld.com/rea/news/article/2014/11/wind-energy-provides-more-than-two-thirds-of-new-us-generating-capacity-in-october
——————-
Solar and Wind Energy Start to Win on Price vs. Conventional Fuels
http://www.nytimes.com/2014/11/24/business/energy-environment/solar-and-wind-energy-start-to-win-on-price-vs-conventional-fuels.html?emc=edit_th_20141124&nl=todaysheadlines&nlid=21372621&_r=0
peakyeast on Thu, 11th Dec 2014 10:51 am
Exxon should notice that we also have an unspeakable amount of people – and that, in the best of worlds, fossil fuels will be used to offset the collapsing biosphere for a short while.
30% of what energy total is also a good question.