Because of the abundance of natural gas and oil now being unearthed in North America, energy imports into the United States and Canada will steadily decline and be "down to almost zero" by 2040, an ExxonMobil Corp. executive said Thursday.
Bill Colton, vice president of corporate strategic planning, made those observations during a conference call to unveil the company's "Outlook for Energy: A View to 2040." The annual outlook is forecasting that global energy demand in 2040 will be about 30% higher than it was in 2010, with natural gas making the biggest gains.
Oil would remain the most widely used fuel but "overall energy demand will be reshaped by a continued shift toward less carbon-intensive energy sources -- such as natural gas -- as well as steep improvements in energy efficiency in areas like transportation, where the expanded use of hybrid vehicles will help push average new-car fuel economy to nearly 50 miles per gallon by 2040," the report said.
The market for natural gas is growing "so fast" because "coal has unique environmental challenges..." Even though coal today "is the most economical followed by natural gas...the economics shift where governments have policies to impose the cost of carbon on a number of fuels. Coal becomes much less competitive because of the higher carbon content per Btu of power."
Nuclear energy, a formerly popular alternative, has lost ground since the Fukushima nuclear disaster in Japan this year. And of the alternative energy sources, wind is the fastest growing but it's "fundamentally limited in how fast it can grow" because it's intermittent power, Colton said.
"Gas is the practical choice. It's easy to build and very efficient."
And there's plenty of it worldwide, said the ExxonMobil executive. By 2040 natural gas is expected to account for 30% of global power general demand, he said.
Rising demand for electricity continues to be the "single largest influence on energy trends," according to the report. ExxonMobil is projecting that global electricity demand will rise by 80%. "By 2040 four out of every 10 units of energy produced in the world will be going toward the production of electricity."
The report was developed by a team using a combination of public and proprietary sources, ExxonMobil noted. The Irving, TX-based producer noted that it publishes the report every year not only to guide its global investment decisions but also to "encourage broader understanding of energy issues among policymakers and the public.
Among the key findings, ExxonMobil said global energy demand is expected to rise by about 30% to 2040, but demand growth "would be about four times that amount without projected gains in efficiency, which is the main reason why energy demand will rise by only about 1% a year on average even as global gross domestic product rises by nearly 3% a year."
In transportation, the second-fastest growing demand sector behind electricity generation, advanced hybrid vehicles are expected to account for half of the cars people will drive in 2040, compared to about 1% today. Meanwhile, demand for oil and other liquid fuels will rise by nearly 30%, with most of the increase linked to transportation. A growing share of the supplies used to meet liquid fuel demand will come from deepwater, oilsands, tight oil, natural gas liquids and biofuels.
Tillerson said in a speech to the World Petroleum Congress in Qatar earlier this week that liquefied natural gas was expected to replace coal as the second largest global energy source by 2040.