Advances in technology to develop unconventional oil and natural gas resources will help lift global liquid supplies to 115 million b/d in 2040 from 89 million b/d in 2010, an increase of almost 30%, ExxonMobil Corp. said Tuesday. Unconventional gas output from North America alone should nearly triple, the oil major said.
In its much-watched Outlook for Energy, which the oil major issues every year, the forecast looks solid for big gains in gas, oil and natural gas liquids (NGL) production, boosted by North America's unconventionals.
Gas is showing the strongest gains overall, as ExxonMobil has noted in previous years, and should surpass coal as the No. 2 fuel source by the end of the forecast period. U.S. and Canadian gas output is projected to grow by about 75% to about 140 Bcf/d, as unconventional output nearly triples, and within five years, North America should surpass the Russia/Caspian region as the largest gas-producing region in the world.
"Through 2040, an increasing share of liquids will come not from the conventional oil deposits that have been the mainstay for generations, but from other sources such as those unlocked by relatively recent advances in technology," ExxonMobil's team of economists, engineers and scientists said.
"New development of conventional deposits is expected to rise significantly, but not quite enough to offset declines in developed ones. By 2040, sources other than conventional crude and condensate will account for about 45% of global liquids production, compared to under 25% in 2010. As a result, global liquids supplies will diversify, both by source and by region."
Like the 20th century technology that enabled offshore drilling advances, many of the unconventional liquids reserves are the result of improving engineering advances.Tight oil's significant expansion is the newest example of breakthroughs in technology, which can happen "sometimes very rapidly and unexpectedly" to expand energy supplies, ExxonMobil noted.
"In 2010, tight oil...accounted for less than 1% of the world’s liquids supply. By 2040, however, we project that tight oil will have grown to 7% of global liquids supply as production rises by a factor of 15. The majority of the growth in tight oil production through 2040 is expected to come from North America, where supply is expanding so rapidly that North America is poised to become a net liquids exporter by the end of this decade."
NGL production also is growing as a result of unconventional growth and by 2040, should account for nearly 15% of liquids supply, according to the outlook.
North American liquids production is projected to rise by more than 10 million boe/d through 2040 -- an increase of more than 65% -- while demand declines by about 1 million boe/d, mostly on efficiency gains in light-duty transportation.
"The combination of robust production growth and receding demand would eliminate North America’s need to draw on global liquid balances," said the report. "This does not mean there won't be imports in North America -- just that such transactions will be driven by reasons other than an overall gap between local demand and supply."