North America will contribute more than half of the growth in global unconventional natural gas supplies to 2040, ExxonMobil Corp. predicted in its well regarded annual energy outlook published on Thursday.
Executives unveiled the annual "Outlook for Energy: A View to 2040" and shared some insight into the latest findings during a webcast. ExxonMobil economists predict there is at least a 100 year supply of oil and liquids. Natural gas supplies will last at least 200 years, said corporate strategy chief Bill Colton.
The outlook for energy "is clearly a technology story," he said.
Global oil and gas reserves continue on an ever-growing pace "as new technologies allow us to tap ever-larger resources. And this is a positive, consistent trend over many years as human innovation and new technology continue to find new ways to access the world's resources."
Oil will continue to hold the title as the No. 1 global fuel through the forecast period but natural gas is playing "an increasingly important role...Estimates of recoverable gas have doubled even in the last 10 to 15 years as hydraulic fracturing and horizontal drilling technologies have unlocked huge reserves of natural gas.
"Unconventional gas accounts now for 40% of the global resource base," said the ExxonMobil executive. And gas resources are diverse: production through 2040 should reflect this diversity with strong growth -- both conventional and unconventional -- in most regions.
"The safe and economic supply of gas from these unconventional resources is one of the most significant developments for our energy future," said Colton. "It's made possible, as you know, by technical breakthroughs developed right here in the United States. These unconventional resources will account for 65% of the growth in global gas production, led by North America."
For several years ExxonMobil, the No. 1 gas producer in the United States, has contended that gas is becoming the fuel of choice worldwide; last year it said gas would overtake coal as the No. 2 fuel by 2025 (see Shale Daily, Dec. 12, 2012). That view hasn't changed, said Colton.
A lot of the increase in gas demand is tied to growing role in worldwide electricity generation, where it has become the fuel of choice.
"Electricity generation is not only the largest sector today, but it is the one that has the most growth to 2040," said Colton. "So electricity becomes even more important in the future..."
Global industrial demand is expected to rise by 35% to 2040 from today, with fuel demand "moving away from coal and toward greater use of natural gas and electricity. In North America, for example, the abundant natural gas supply is leading to a resurgence in the chemical industry, as well as in manufacturing."
Natural gas has the largest "absolute growth, with demand rising 65%. It passes coal into the No. 2 position. Gas is a prime fuel for power generation…and gas is also used in all the other sectors," said Colton. Oil demand should increase by about 25% to 2040, because it's "uniquely attractive for transportation as liquid fuels continue to set the standard for convenience and for energy density," offering "large amounts of energy in a small volume," such as in a tank of gasoline.
The supply outlook for liquid fuels is expected to see a 27% increase in demand growth.
There's expected to be a "relatively flat outlook for conventional crude oil production. The real story is the dramatic impact of new technologies that are being deployed today to produce growing volumes of liquids in new ways," Colton said. "Specifically, deepwater drilling, tight oil production, oilsands extraction and natural gas liquids…All of these new sources have robust growth rates."
ExxonMobil's energy outlook helps to guide investments that underpin its business strategy. The outlook examines energy supply and demand trends in more than 100 countries and 15 demand sectors, such as transportation, industrial and power generation. Twenty different types of energy that will be available to future consumers are evaluated while taking into account assessments of future technologies, government policies and cross-border trade flows.
This year's outlook "has never been so positive," said Colton. "We live in a world with vast resources, not just geologically, but more importantly, in terms of human potential, in innovation through technology.
"In the world of energy, new technologies have unlocked new resources, allowing us to produce more energy in new ways, and this fundamentally underpins our standards of living. And more important, it allows people around the world to improve their standards of living. That's a key theme in our outlook."