Understanding long-term energy supply and demand is critical as the energy industry faces a time of significant stress – but also opportunities.
The Outlook for Energy report, produced by ExxonMobil, looks at energy demand and supply through 2040. The report’s findings are used to inform the company’s global long-term strategies and investments.
It found that a significant energy transition is underway, and many factors will shape the world’s energy future. These include government ambitions and policies that seek to promote prosperity while also addressing the risks of climate change.
The recent Paris Agreement on climate change provided significant insights on governments’ intentions to reduce greenhouse gas (GHG) emissions through the inclusion in the agreement of nationally determined contributions (NDCs). Policies adopted to support NDCs will likely affect supply and use of energy across society.
To support economic growth and make substantial progress on the climate goals identified in the Paris Agreement, well-designed and transparent policy approaches that carefully weigh costs and benefits are needed. Such policies are likely to help manage the risks of climate change while also enabling societies to pursue other high-priority goals, including: clean air and water; access to reliable, affordable energy; and economic progress for all people.
Technology will also be vital to improve living standards while addressing climate risks. Technological advances continue to reshape the energy playing field. Many developments not prevalent five to 10 years ago have a more significant role today, and their impacts will continue to expand.
Examples include wind and solar power, unconventional oil and gas development, and electric cars. Meeting the dual challenge of mitigating the risks of climate change while boosting standards of living will require additional advances in technology.
While policies and technologies help shape living standards and the evolution of energy, they also disrupt the status quo and can cause uncertainty and unexpected consequences. Accordingly, as part of the report’s development process, ExxonMobil develops and uses sensitivities to increase understanding of possible energy outcomes.
The report includes several sensitivities on specific areas of interest to provide greater perspective on how changes to our base assumptions could affect the energy landscape.
In addition, it anticipates countries around the world undergoing significant changes through 2040 to boost living standards, reshape the use of energy, broaden access to abundant energy supplies, and accelerate decarbonisation of the world’s energy system to address the risks of climate change.
A role for everyone
Seven billion people shape the world’s energy system and have a direct impact on the fundamental drivers of energy demand. Energy impacts the economy as well as security and environment goals, and energy solutions can vary over time and circumstances.
Think about how access to energy affects your own life, and how that translates to billions of other people around the world. Compare your own conclusions on the energy future with those in the Outlook for Energy report.
Energy is fundamental to modern life. As the world’s population is set to reach 9 billion people by 2040, we will need to rise to the challenge of improving living standards everywhere. This progress will be powered by human ingenuity – and the energy that helps make better lives possible.
The report has some key findings that will influence the work of those in the energy sector over the next two decades. By 2040:
- Global energy needs will rise about 25 percent, led by non-OECD nations;
- Electricity demand will nearly double in non-OECD nations;
- Energy generation from solar and wind will increase by about 400 percent;
- Natural gas’ role will expand to meet a wide variety of needs; and
- Oil will play a leading role to aid mobility and the development of modern products.
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