January 28, 2011 in Business

Exxon updates energy outlook

Oil giant sees drop in demand for gasoline over next 20 years
Jonathan Fahey Associated Press
 

NEW YORK – There will be 400 million more cars on the world’s roads 20 years from now, yet gasoline consumption will decline, according to a projection from Exxon Mobil Corp. in its long-term energy outlook released Thursday.

The world’s biggest investor-owned oil and gas company expects energy use overall will grow 35 percent by 2030, But that growth would be three times higher if people used as much energy per capita as they do now.

Nowhere is that more apparent than in projections of gasoline demand. People in developing countries, especially China, will drive millions of more cars and gas demand will grow, but the cars will be more efficient.

Meanwhile, improvements in fuel efficiency in the U.S. and Europe will create a drop in demand that more than matches Asia’s growth. Demand for fuel for passenger vehicles will decline by 20 percent in the U.S. and by one third in Europe by 2030.

Exxon’s long-term energy analysis, updated and released to the public every year, paints a picture of what Bill Colton, vice president, Corporate Strategic Planning, called a “tale of two worlds.”

In developed countries like the U.S., Japan, and the nations of Europe, demand for energy will stay flat even as economic activity increases by 60 percent. In developing countries like China, India and Brazil, demand for energy will rise more than 70 percent as more and more people gain access to electricity and transportation.

While demand for gasoline is expected to stay flat, demand for oil is expected to grow. Diesel, jet fuel, and other oil-derived transportation fuels are expected to more than make up for the small decline in gasoline demand.

Exxon projects annual oil demand of 100 million barrels per day by 2030. Worldwide demand for 2011 is expected to be about 88 million barrels per day, according to the analysis firm Wood Mackenzie.

Exxon does predict a few other major shifts in energy demand. Natural gas is expected to displace coal as the second most important worldwide fuel by 2020.

The shift to natural gas is being driven by new drilling technology that allows companies to tap huge reserves of natural gas. And Exxon expects that clean air and climate change regulations around the world will make coal more expensive.

Nuclear power will grow steadily, Exxon says, and renewable power will grow fastest of all, about 10 percent per year. Still, by 2020, Exxon predicts only 2.5 percent of global energy demand will be met with renewable power.

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