Outlook for Energy: A perspective to 2040

The 2019 Outlook for Energy is ExxonMobil’s latest view of energy demand and supply through 2040. For many years the Outlook has helped inform ExxonMobil’s long-term business strategies, investment plans and research programs.

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Outlook for Energy: A perspective to 2040

The Dual Challenge 

As energy is essential for human development, society faces a dual challenge: to provide reliable and affordable energy to a growing population, while reducing environmental impacts, including the risks of climate change.

A significant portion of the world’s population remains energy-deprived, facing living conditions that would be considered dire by most people in developed countries. Access to modern energy improves a community’s quality of life; it is closely correlated to increased life expectancy, reduced poverty and malnutrition, and higher levels of childhood education.

As growing populations gain increased access to energy, rising living standards in many parts of the world will create the largest expansion of the global middle class in history, meaning more demand for homes, transportation, electricity, consumer goods, and the energy to power them all. The challenge is to satisfy this growing demand, while reducing the risks of climate change.

Building a perspective

The Outlook provides a projection of energy demand through 2040 using the International Energy Agency (IEA) and other credible third-party sources as a foundation. The projection is based on likely trends in technology, policy, consumer preferences, geopolitics and economic development. While these individual trends may vary over time, the snapshot provided by the Outlook can help to evaluate society’s progress toward addressing both aspects of the dual challenge.

As these trends evolve, we continue to discuss our approach and conclusions with numerous stakeholder groups, economists and policy experts. The Outlook team also considers various sensitivities and third-party scenarios from peer-reviewed work to improve our understanding of the energy landscape.

Addressing the dual challenge will have ramifications for every nation’s economic, energy security and environmental goals. By sharing our Outlook with the public, we seek to broaden understanding of the world’s energy system and enrich the dialogue on practical, robust solutions.

ExxonMobil supports the Paris Agreement

The Paris Agreement1 on climate change declared governments’ intentions to reduce greenhouse gas (GHG) emissions as outlined in each country’s nationally determined contribution (NDCs). Many states, cities and businesses, including ExxonMobil, expressed support for the aims of the agreement. Our own climate change risk management strategy is described in ExxonMobil’s Energy & Carbon Summary, which can be found at exxonmobil.com.

Based on the Outlook and third-party reports, including the 2018 Emissions Gap Report from the United Nations Environment Programme, we expect that the world is likely to meet, in aggregate, the 2030 Paris Agreement pledges with continued focused efforts, but further work is needed for the world to accelerate progress toward a 2oC pathway.2

Our 2019 Outlook, like the 2018 Outlook, includes a section, “Pursuing a 2oC Pathway,” utilizing third-party, peer-reviewed work coordinated by the Energy Modeling Forum at Stanford University.3 The discussion in this section highlights the need for enabling technologies and policies, a role for all primary energy sources, and the continued need for focused investments, including in oil and natural gas.

We believe technology holds the greatest potential to help society address the dual challenge. Technology has already significantly improved energy efficiency and helped to unlock diverse and abundant sources of energy. To address the dual challenge, no technology or energy type can be ignored. Instead, the world must harness a variety of energy sources and technology advances, guided by policies that fully reflect the costs and benefits, consumer preferences and the need to provide affordable energy to all.

Progress toward tackling the dual challenge requires thoughtful and meaningful action by everyone - policymakers, business leaders, technologists and consumers. ExxonMobil is committed to doing our part. As one of the world’s premier energy and technology companies, we are well-positioned to continue providing safe, reliable energy today and effective solutions to meet the word’s future energy needs - all while reducing environmental impacts and mitigating the risks of climate change.

Energy matters to everyone and we all play a role in shaping its future.

Sources

  1. https://unfccc.int/process-and-meetings/the-paris-agreement/the-paris-agreement
  2. UNEP (2018). The Emissions Gap Report 2018. United Nations Environment Programme, Nairobi, page XIV and XV, http://wedocs.unep.org/bitstream/handle/20.500.11822/26895/EGR2018_FullReport_EN.pdf?sequence=1&isAllowed=y
  3. EMF was established at Stanford in 1976 to bring together leading experts and decision makers from government, industry,universities, and other research organizations to study important energy and environmental issues. For each study, the Forum organizes a working group to develop the study design, analyze and compare each model’s results and discuss key conclusions. https://emf.stanford.edu/about. EMF is supported by grants from the U.S. Department of Energy, the U.S. Environmental Protection Agency as well as industry affiliates including ExxonMobil. https://emf.stanford.edu/industry-affiliates

Related content

Emissions

Providing reliable, affordable energy to support prosperity and enhance living standards is coupled with the need to do so in ways that reduce impacts on the environment, including the risks of climate change. This is society’s dual challenge and ExxonMobil takes it seriously.

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Energy supply

Energy – in all its forms – enables growth and prosperity. As economies grow, as technology advances, as consumers become more environmentally aware, and as policies adapt, global energy demand will evolve to meet changing needs.

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Energy demand: Three drivers

Policy. Technology. Consumer preferences. All three impact how the world uses energy. Each driver influences the other. The interplay between these can vary depending on local circumstances (available resources, public support) and can change over time. At ExxonMobil, we’re continually studying energy demand and developing models that measure its potential impact — all in an effort to gain a deeper understanding of the interconnectivity of the global energy system.

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Global fundamentals

Energy is essential for society’s progress. Economic expansion and improving access to energy enable longer, more productive lives for the growing global population.

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How we develop our Outlook

ExxonMobil uses a data-driven approach to understand potential future energy demand and supply.

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Pursuing a 2°C pathway

Many uncertainties exist concerning the future of energy demand and supply, including potential actions that societies may take to address the risks of climate change.

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