Despite much lower oil prices at the end of 2014, ExxonMobil’s forecast for the global energy supply and demand picture through 2040 is very similar to its forecast for last year. It sees energy demand growing 35% to fulfil the needs of 2 billion more inhabitants consuming energy worldwide by 2040. It expects carbon-based fuels to meet approximately 75% of global energy demand through 2040. It also expects that oil and natural gas will be the two most prominent global fuels in 2040 with oil maintaining its number one ranking and natural gas surpassing coal for the second position. Combined, these two fuels are expected to provide 60% of global energy demand in 2040.
Global energy demand
Global energy demand is expected to increase by 35% by 2040 – less than half the growth rate during the previous 30 year period from 1980 to 2010 due to efficiency gains. Without these efficiency gains that Exxon assumes, energy demand from 2010 to 2040 would increase 140% instead of just 35%. China and India combine to account for half the expected 35% growth in global energy demand because these two developing economies are expected to lead the world in population and increased living standards. Exxon expects an additional group of 10 key growth countries to represent an increasingly significant share of the global energy market due to their increasing population and living standards. This geographically diverse group consists of Brazil, Mexico, South Africa, Nigeria, Egypt, Turkey, Saudi Arabia, Iran, Thailand and Indonesia. Note that Exxon puts Mexico and Turkey in this category, taking them out of the group of countries that comprise the OECD, which represent developed economies.
The global population is projected to increase to 9 billion in 2040, 2 billion more than the approximately 7 billion in 2010. Approximately 40% of the increase is expected to be from India and the 10 key growth countries. The developed countries and China are expected to see only modest population growth. China’s population is expected to plateau around 2030, at 1.4 billion, and India is expected to become the world’s most populous country, with 1.6 billion people by 2040.
Exxon anticipates that the percentage of people over 65 in China will increase from 8% in 2010 to over 20% in 2040. With an ageing population, China’s economic growth is expected to moderate, but its GDP is expected to expand by approximately 400% over the forecast period. Most of the rest of the developing world is expected to see large increases in working age population both in absolute numbers and as shares of the total.
Exxon expects global GDP to increase by approximately 140%, the fastest growth is expected to occur in China, India and the key growth economies. By 2040, per capita GDP in China is expected to be four times higher than in 2010; in India, three times higher; and in the key growth economies, 1 -2 times higher. The higher standards of living for billion of people results in a fast growing middle class in many developing countries, which increases energy demand.
Adapted from a report by Emma McAleavey.
Read the article online at: https://www.hydrocarbonengineering.com/refining/06012015/exxonmobil-energy-demand-forecast-022/