energy viewto 2040_exon

7/30/2019 Energy Viewto 2040_Exon

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013T h e O u T l O O k f O r e n e r g y : A V i e w T O 2 0 4 0 u. S. e d i T i O n


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Explore our complete Outlook for Energy,

or download your own copy, at

exxonmobil.com/energyoutlook.


3/24The Outlook or Energy: A View to 2040

The words energy andscape is aways changing the resut o new technoogies,

government poicies, economic and popuation trends, and consumer choices. Today,

nowhere is the energy andscape changing more than it is in the United States.

U.S. oi and natura gas production has risen to its highest eve in three decades, as advances in technology

have unlocked vast resources o oil and gas that are located in shale and other tight rock ormations in many states,

including Texas, North Dakota and Pennsylvania.

This domestic energy renaissance has created signicant economic benets or the United States, including: lower energy

costs or businesses and individuals; increased manuacturing activity; millions o new jobs; billions o dollars in taxes and

government revenue; and new opportunities to expand Americas role in the global energy trade.

ExxonMobis Outlook or Energysees U.S. oi and gas production continuing to grow over the coming

decades as shale and other unconventional resource output combines with new supplies rom the deepwater

U.S. Gul o Mexico and elsewhere. ExxonMobil expects North Americas liquids and natural gas production to riseby about 45 percent rom 2010 to 2040, boosted by U.S. activity.

But rising energy production is only hal o the story.

The United States aso continues to reduce its energy consumption. Largely because o ongoing eciency

improvements, rom 2010 to 2040 energy usage in the United States the worlds second-largest energy consumer

ater China is projected to all by about 5 percent, even as the U.S. population grows and economic output doubles.

ExxonMobil expects that the combination o these two trends steep gains in energy production and modest declines

in U.S. consumption will enable North America to become a net energy exporter by about 2025 and bring signicant

benets to the U.S. economy, including opportunities associated with natural gas exports.

Reduced U.S. energy consumption also will provide environmental benets, especially when combined with another

major energy trend under way in the United States: a pronounced shit away rom coal in avor o less-carbon-intensive

uels such as natural gas. ExxonMobi expects that by 2040, Americas carbon dioxide (CO2) emissions wi

have aen back to eves not seen since the 1970s.

O course, the United States is just one part o the global energy market, which must meet the needs o a population

projected to rise rom 7 billion today to close to 9 billion by 2040. ExxonMobil sees global energy demand rising by about

35 percent rom 2010 to 2040, driven by growth in China, India and other ast-developing countries in Asia Pacic, Arica,

the Middle East and Latin America.

ExxonMobil has served Americas energy needs or 130 years. We hope this U.S. version o our global Outlook for Energywill

shed light on the transormative changes that are reshaping Americas energy landscape, and the opportunities they present

to urther strengthen the countrys economy and its role in the global marketplace.

Note: Excerpted rom ExxonMobils 2013 global publication, The Outlook for Energy. The complete report can be

ound at http://www.exxonmobil.com/energyoutlook

The Outlook for Energy: A View to 2040


4/24

Energy demandAccess to energy remains vital not only to the l ives o the more than 300 million

Americans, but also to U.S. businesses and industries that use energy to

support jobs, technologies and the provision o U.S.-made goods and services.

But the relationship between Americas economy and its energy usage is

changing. Ater climbing steadily or decades, U.S. energy demand will level

o and begin to decline through 2040 even as its economy and population

continue to grow. This undamental shit will be driven by improvements to

energy efciency, especially in the transportation sector.

2 exxonmobil.com/energyoutlook


5/24The Outlook or Energy: A View to 2040 3The Outlook or Energy: A View to 2040 3

30%Electricity demand, the single biggest

driver of energy in the United States,

grows 30 percent by 2040.

2010 2040


6/24

Global population

Billions of people

21

18

15

12

9

6

3

02000 2020 2040


Popuation, economic growth drive energydemand, both gobay and domesticay

Global GDP

Trillions of 2005 dollars

120

100

80

60

40

20

0

2000 2020 2040

Global energy demand

Quadrillion BTUs

1400

1200

1000

800

600

400

200

02000 2020 2040

United States

Rest of world

Energy saved~500

Energy savings throughefficiency gains

i

Global demand or energy is expected to rise by about

35 percent rom 2010 to 2040, a signiicant increase that

will require trillions o dollars in investment and ongoingadvances in energy technology.

One reason or rising energy demand is population growth.

Although the rate o growth is slowing, by 2040 there will be

nearly 9 billion people on the planet, up rom about 7 billion

today an increase equal to six times the current U.S.

population. Another actor is rising prosperity and economic

growth around the world, which will create new demands

or energy. Global GDP is projected to expand by about

130 percent rom 2010 to 2040.

Energy demand trends will vary greatly by country type.

Among members o the Organization or Economic

Cooperation and Development (OECD), which includes the

United States, energy demand will be essentially fat through

2040. In these more mature economies, increased energy

demand rom economic growth will be oset by improvements

to eciency. In Non OECD countries, such as China and India,

demand is seen rising by 65 percent as rapid increases ineconomic output and prosperity levels outpace gains in eciency.

The expanded use o energy-saving technologies and

practices in every country, and across all end-use sectors,

will save a tremendous amount o energy an estimated

500 quadrillion British thermal units (BTU) a year by 2040.

In act, ExxonMobil projects that global energy demand

growth through 2040 would be nearly our times the projected

35 percent were it not or expected gains in eciency.

Improved eciency, plus the shi t to less-carbon-intensiveuels, also will help curb greenhouse gas emissions; globally,

energy-related CO2 emissions are expected to plateau around

2030. Trends will vary greatly by country, however, with

emissions rom OECD nations alling by about 20 percent

and Non OECD emissions rising by 50 percent.

75%75 percent of the

worlds population will

reside in Asia Pacific

and Africa by 2040.


7/24The Outlook or Energy: A View to 2040 5

America will use less energy even as GDP doubles

Ater many decades o rising energy consumption, the United

States appears to have reached a point where it can continue

to expand its economy and prosperity while maintaining a airly

stable level o energy usage.

As the worlds largest economy, the United States already

has achieved relatively high living standards. The country alsohas relatively high per-capita energy use, as energy-related

technologies everything rom vehicles to air-conditioning

are already widely deployed throughout the country. As a

result, over the next ew decades, underlying undamentals

that would tend to drive increases in U.S. demand or energy

will be more than oset by gains in energy eciency.

Overall U.S. energy consumption is expected to gradually

plateau and then decline by about 5 percent rom 2010 to 2040,

even as GDP doubles. One actor supporting U.S. economic

expansion is its population. While populations in many OECD

nations will shrink over the next 30 years, the U.S. population

will expand by more than 20 percent, with steady gains in its

working-age group (those 15 to 64 years o age). Broken

down by sector, U.S. demand or uel or electricity generation

will rise slightly, but all in the other major demand sectors:

transportation, residential/commercial and industrial.

U.S. energy demand by sector

Quadrillion BTUs

100

80

60

40

20

02000 2020 2040

Electricity generation

Transportation

Industrial

Residential/commercial

U.S. energy demand by fuel

Quadrillion BTUs

100

80

60

40

20

0

2000 2020 2040

Oil

Gas

Coal

Nuclear

Biomass Otherrenewables

U.S. energy-related CO2 emissions by sect

Billion tons

6

5

4

3

2

1

02000 2020 2040

Industrial

Electricity generation

Transportation

Residential/commercial

U.S. shits to less-carbon-intensive uels

The United States wil l cont inue i ts shit toward less-carbon-

intensive uels, particularly in the electricity generation sector.

U.S. demand or natural gas will rise by more than 25 percent

to 2040. Technologies that have expanded production o

shale gas across the U.S. will help meet this demand.

Wind, solar and biouels also grow sharply; by 2040, theserenewable uels will meet about 7 percent o U.S. demand.

U.S. use o nuclear power is expected to rise by about

25 percent rom 2025 through 2040. On the other hand,

U.S. coal consumption is expected to drop by more than

65 percent; by 2040, coal will account or about 7 percent

o U.S. energy, down rom more than 20 percent in 2010.

This is due in part to new policies and regulations that wi ll

eectively raise the price o more-carbon-intensive uels.

Because o improved eciency and the increased use o

natural gas, renewables and nuclear, ExxonMobil sees U.S.

energy-related CO2 emissions alling by more than 25 percent

rom 2010 to 2040, reaching levels not seen since the 1970s.

However, even by 2040 U.S. per-capita emissions still will be

higher than in other countries.


8/246 exxonmobil.com/energyoutlook

Residential/commercial demand by sector

Quadrillion BTUs

20

15

10

5

0

2000 2020 2040

Residential

Commercial

Residential/commercial demand by fuel

Quadrillion BTUs

20

15

10

5

02000 2020 2040

Oil

Other

Gas

Electricity

Coal

Eciency to curb demand inresidentia/commercia sector

The residential/commercial sector represents Americas single-

and multi-amily residences, plus commercial buildings such as

oces, stores, schools and medical acilities. Nearly 30 percento the energy used in the United States is directed to this end-

use sector, counting both direct energy usage (e.g., natural gas

or cooking and heating) plus net delivered electricity used in

these structures.

While direct energy use in the residential/commercial sector

will all by more than 15 percent over the Outlookperiod, total

energy demand (including delivered electricity) in this sector is

projected to rise slightly, by about 5 percent.

In the residential subsector, demand is expected to peak in2025, then decline through 2040. One reason is improved

eciency, the result o actors such as better insulation and

energy-saving appliances. U.S. homes already have seen

signicant improvements in eciency. While new U.S. homes

built since 1990 are nearly 30 percent larger than homes built

beore 1990, total energy demand or residential use grew by

only about 20 percent over the last 20 years.

In the commercial subsector, total energy demand is expected

to rise by more than 10 percent between 2010 and 2040,

largely because o an expected steady increase in commercial

square ootage in the United States.

One noteworthy growth area is hospitals. According to

government data, in 2003 hospitals accounted or 4.3 percent

o U.S. commercial energy demand; by 2007, that number had

risen to 5.5 percent. In addition, hospitals tend to require about

twice as much energy per square oot as most other types ocommercial buildings.



Industrial demand by sector

30

25

20

15

10

5

02000 2020 2040

Quadrillion BTUs

Other

Heavy industry

Chemicals

Energy industry

Industrial production

200

175

150

125

100

75

50

25

0

Indexed to 2000 = 100

2010 2025 2040

Domestic manuacturing and other industrial activity is expected

to grow steadily over the next ew decades, in conjunction with

projected U.S. economic recovery and growth.

The industrial sector which includes heavy industries such

as steel and machinery as well as agriculture, chemicals and

energy uses oil and natural gas not just as uel but also

in many cases as eedstock or the manuacture o other

products, such as plastics and ertilizer. Over the coming

decades, rising North American oil and gas production is

expected to continue to support the expansion o U.S.-based

industrial activ ity.

North Americas chemicals production is expected to rise bymore than 20 percent in just the years rom 2012 to 2020, and

ertilizer production is seen ris ing by nearly 50 percent rom

2010 to 2040. By 2015, U.S. steel production is expected

to return to 2007 levels, as the economy recovers and

commercial construction and manuacturing expand.

ExxonMobil expects energy consumption in this sector will rise

slightly through 2025 as industry responds to lower natural gas

prices. Yet even as U.S. industrial activity increases, rom 2025to 2040 energy consumption will decline by about 5 percent,

refecting ongoing improvements in eciency such as process

intensication and energy-use management systems. In act,

the energy required or a constant level o industrial production

will all by about hal over the Outlookperiod.

One o the biggest improvements in eciency can be seen

in the energy industry subsector (including U.S. oil and gas

production and rening), where energy usage is expected

to all by more than 25 percent, mostly because o the

expanded use o advanced energy-saving technologies suchas cogeneration.

Demand or energy or the heavy industry and chemicals

subsectors is projected to rise in the range o 5 to 10 percent

over the Outlookperiod as economic opportunities exist to

expand output.

Industria activity to expand,but energy demand stays fat



New ue-economy standardsto curb transportation demand

Overall energy demand in the U.S. transportation sector is

expected to peak shortly ater 2015 and decline by 10 percent

over the Outlookperiod. The United States will remain thelargest consumer o energy or transportation, but by 2040 its

share o global transportation demand will have allen to about

15 percent, compared to about 25 percent in 2010.

Federal Corporate Average Fuel Economy (CAFE) standards

call or U.S. auto companies to raise the average EPA-rated uel

eciency o the light duty vehicles they sell in the United States

to 34.5 miles per gallon by 2016 and 54.5 mpg by 2025. These

new rules will require signicant changes in the U.S. light duty

feet, which in 2010 had an EPA-rated average o 28.4 mpg.

While actual on-road mileage typically is lower, achieving thesestandards will have a dramatic impact on uel consumption.

Advanced vehicles are expected to account or more than

50 percent o the feet and about 80 percent o U.S. new-

car sales by 2040. Conventional vehicles also will need

to become smaller and more uel-ecient to meet the new

Transportation demand by fuel

Millions of oil-equivalent barrels per day

15

10

5

02000 2020 2040

Gasoline

Ethanol

Biodiesel

Diesel

Jet fuel

Fuel oil Natural gas

Other

Light duty vehicle fleet by type

Millions of vehicles

300

250

200

150

100

50

02000 2020 2040

Natural gas/LPG

Conventional gasoline

Hybrid

Electric/Plug-in hybrid

Conventional diesel

Transportation demand by sector


15

10

5

02000 2020 2040

Light duty

Heavy duty

Aviation

Rail Marine

uel-economy standards. As a result, the average on-road uel

economy o new U.S. light duty vehicles is expected to rise to

about 45 mpg by 2040, or about twice the 22 mpg level in 2010.Nationwide demand or uel or light duty vehicles will all by

one-third over the Outlookperiod, even as the number o these

vehicles on U.S. roads rises by approximately 65 mill ion.

On the other hand, U.S. demand or uel or commercial

vehicles trucks, planes, ships and trains will rise by

nearly 35 percent, as a recovering economy spurs increased

movement o people and goods.

Another change on the horizon is the potential use o natural gas as

a transportation uel, particularly or certain trucks and other heavyduty vehicles that can more readily recoup the higher up-ront costs.

ExxonMobil sees natural gas accounting or about 7 percent o

U.S. heavy duty vehicle demand by 2040, compared with less than

1 percent today. However, ExxonMobil continues to expect very

limited use o natural gas in light duty vehicles due to competing

technologies, such as hybrids, having broader appeal to consumers.


11/24

When consumers set out to buy a new vehicle, cost and unctionality are top concerns. Buyers consider not only purchase cost,

but also the cost o uel or the vehicle over its lietime. So while making cars and other light duty vehicles more ecient and

reducing vehicle emissions is a shared global goal, consumers generally will choose vehicles that meet that goal at the lowest

cost to them. Through 2040, ExxonMobil sees most consumers gravitating to three options based on key decision criteria

including unctionality requirements o the vehicle or the users, the cost o various options, and the relative saety, perormance

and convenience aorded by various vehicles. Consumers also must consider other actors, such as driving range. Because

gasoline and diesel are energy dense, they contain more energy per ll-up than ethanol, compressed natural gas (CNG) or

electric vehicle batteries; this enhances consumer convenience by reducing the need or reueling stops.

Technoogies that make conventiona vehices more ecient. Because it is relatively inexpensive to improve the eciency

o todays vehicles, this is the only option in which consumers uel savings over the rst ve years o ownership equal or

exceed their added costs. Technologies such as turbocharging, higher-speed automatic transmissions, improved aerodynamics

and reduced weight can improve uel economy and reduce CO2 emissions by more than 30 percent. ExxonMobil expects

automakers will make increased use o these technologies as they seek to meet government uel-eciency mandates.

Advanced vehices. O all advanced-vehicle technologies, hybrids will oer by ar the best value or consumers.

By 2030, ExxonMobil expects that, on average, the cost o hybrid vehicles (like the Toyota Prius) will be about $2,000

higher than that o a similar-sized conventional vehicle, while a standard electric vehicle (like Nissans Lea) will be abou

$7,000 higher and a plug-in hybrid electric vehicle (like the Chevrolet Volt) will be about $5,000 higher. In the case o

the standard electric vehicle, consumers would not recoup that higher purchase cost within ive years unless gasoline

prices were more than $7 a gallon; with gasoline at $4 a gallon, it would take 11 years to break even. Additionally, the

CO2 emissions o electric vehicles vary signiicantly based on the uel source used to generate their electricity.

Smaer vehices. Whether they drive conventional or advanced vehicles, consumers can improve uel economy by up to

35 percent by switching to smaller, lighter vehicles.

The economics o consumer decisions will change as vehicle technology develops and as the prices o uels rise and all.

Consumer decisions will naturally evolve over time as their particular needs change, vehicle technology develops, and the

economics o buying and operating a vehicle change. Ultimately, the choices made by consumers will determine how the global

vehicle feet and related energy demand evolve in the coming decades.

Vehicle efciency:Costs infuence consumer choices

The Outlook or Energy: A View to 2040 9



Power generation shits tonatura gas, nucear and wind

The generation o electricity is the single biggest source o U.S. uel

demand today, accounting or about 40 percent o consumption.

Over the next ew decades, the use o less-carbon-intensive uels

(natural gas, nuclear and renewables) will grow substantially, while

coal declines. Coal, which produced about 45 percent o Americas

electricity in 2010, will account or only about 15 percent in 2040.

This orecast refects assumptions about the implied cost o CO2

in the United States, which serve as a proxy or a wide variety

o potential policies that might be adopted to stem greenhouse

gas emissions. The Outlookhas implied CO2 costs in the United

States and other OECD countries reaching about $60 per ton in

2030, rising to about $80 in 2040.

The biggest growth or power generation will be in natural gas,

which emits up to 60 percent less CO2 than coal when used or

electricity generation. As in many other countries, natural gas is

expected to be the uel o choice or U.S. electricity generation or

several reasons. New gas-red generating units are ecient, easy

to build at a reasonable cost, fexible to operate, and supported

by abundant U.S. gas supplies.

Use o wind and solar also will grow substantially. However, wind and

solar ace challenges related to economics and reliability considerations

(see page 11). Also, considering the costs o capturing, converting and

storing wind and solar energy, these sources will require subsidies,

mandates or a higher cost o CO2 to be competitive.

By 2040, about 85 percent o Americas electricity will likely

come rom natural gas, nuclear and renewable uels, compared

to about 50 percent in 2010.

In addition to curbing emissions, the shit away rom older,coal-red plants to more ecient natural gas acilities will also

save the United States a substantial amount o energy. While

U.S. electricity demand is expected to rise by about 30 percent

through 2040, because o this improved eciency, demand or

uel to generate electricity will remain largely unchanged.

Electricity generation fuel consumption

Quadrillion BTUs

50

40

30

20

10

0

2000 2020 2040

Gas

Coal

Nuclear

Oil

Wind and SolarBiomass

Other Renewables

Average U.S. cost of electricity generation in 2030

Cost per kilowatt hour in 2012 cents

14

12

10

8

6

4

2

0Gas Nuclear

* Wind and solar exclude costs for backup capacity and additional transmission.

Coal

NoCO2cost

At $60per tonof CO2

Reliabilitycost*

Onshore Wind*

Reliabilitycost*

Solar PV*



Wind and solar energy comprise an important and growing part o the global energy mix and have an important role to play

in meeting energy needs. However, or decades, people have been working to overcome the challenges associated with

harnessing the wind and sun to generate energy. The key obstacle is the intermittent nature o these natural resources: The sun

doesnt shine 24 hours a day and the wind doesnt blow continuously.

To generate electricity rom the sun, photovoltaic solar panels capture light energy, or photons. Various weather conditions

can substantially impact the eectiveness o solar, or example when the air is humid or is o poor quality or when the skies are

cloudy, making solar electricity generation intermittent.

Wind power generation depends on how ast wind is blowing. I wind speed is too low or too high, the turbine cannot generate

electricity. This makes wind electricity generation variable and intermittent. In act, studies indicate that it is not uncommon or

wind turbines to operate at only 5 to 15 percent o capacity during peak electricity demand.

The availability o wind and sun at certain times o the day also actors into their use as reliable sources o energy. Solar power is

best during mid-day. However, in many regions o the world, peak electricity demand occurs in the aternoon when air conditioning

load is highest. In other regions, peak power demand occurs during winter evenings, when the sun has already set.

Because solar and wind cannot be relied on to always generate power when electricity is needed, other more fexible types

o generation, such as hydro, coal or natural gas, must remain on standby to ensure reliability o the power system. However,

hydropower is limited in supply and coal power generation emits the highest amount o CO 2 and is slow to start up. That makes

natural gas the generation uel o choice to complement wind and solar.

Gas emits up to 60 percent less CO2 than coal when used or electricity generation. Gas plants are quick to start up and adjust

to demand, are quicker and less costly to build, and have a smaller environmental ootprint. Because gas generation produces

minimal sulur or particulates emissions, it can be located in populated areas. And unlike coal, onsite uel storage is not required.

The intermittency and variability o wind and solar generation limit their practical abil ity to meet electricity demand when

required. The need to have additional generation to ensure a reliable electricity supply increases their cost relative to alternatives

like gas and nuclear. Thats why, even though by 2040 wind-powered energy grows by seven times, it will only account or

about 7 percent o global electricity supply. Likewise, solar power generation is expected to increase by more than 20 times,

but will only account or about 2 percent o global electricity supply in 2040.

Electricity 201:The challenges oharnessing wind and solar energy


14/24

Energy supplyThe United States continues to enjoy access to an abundance o energy

sources. Through 2040, oil will remain the countrys most popular uel,

but oil demand is expected to all as American vehicles become more

uel-efcient. Natural gas usage will rise sharply as U.S. electricity

generators shit away rom coal. Expanding North American production

o oil and natural gas the result o technologies that have enabled the

development o energy rom shale rock and other sources will help

meet U.S. energy demand and reduce the need or imports.



15/24The Outlook or Energy: A View to 2040 13The Outlook or Energy: A View to 2040 13The Outlook or Energy: A View to 2040 13

65%Oil and gas willcontinue to supplyabout 65 percent

of U.S. energy

demand in 2040.

OTHER


16/24

North America natural gas resource

Thousand trillion cubic feet

6

5

4

3

2

1

0

2040

Cumulativeproduction

Remainingresource

U.S. shae boom wi hep meetgrowing demand or natura gas

North America has abundant resources o natural gas a uel

used to generate electricity, heat homes and buildings, and

power industries. Spurred by demand or less-carbon-intensiveuels, U.S. consumption o natural gas is projected to rise by

more than 25 percent through 2040, when it will satisy nearly

one-third o Americas energy needs.

In recent years, domestic supplies have been greatly expanded

by advances in technology that have enabled the United States

to tap the vast quantities o natural gas located in shale rock,

which previously were considered too costly to produce. U.S.

natural gas production is at its all-time high, and expected to rise

by more than 45 percent over the Outlookperiod.

This expansion in domestic gas production continues to have

positive eects on the U.S. economy, including providing an

abundance o reliable and aordable energy or consumers

and businesses, the creation o millions o new jobs, billions

o dollars in taxes and other revenues. It also will provide

signicant new economic opportunities or North America as it

transitions to a net natural gas exporter by about 2020.

Shale and other unconventional supplies rom North

America will play an increasingly important role in meetingglobal demand or natural gas, which by 2025 will have

overtaken coal as the worlds second-most-consumed uel.

Unconventional gas production also is expected to expand

overseas, as the shale technologies developed in the United

States are applied in other countries.

About 60 percent o the growth in global gas demand will be

met by unconventional sources, which by 2040 will account or

nearly one-third o global gas supply. Unconventional resources

also include coal bed methane and tight gas.

Even with the projected increase in its natural gas production

through 2040, North America will continue to have signicant

gas resources in the ground an estimated 100 years supply

at current consumption rates, a number that has the potential

to expand as technology advances.

Global natural gas supply

Billions of cubic feet per day

600

500

400

300

200

100

02010 2025 2040

Rest of worldconventional

North Americaunconventional

Rest of worldunconventional

North America conventional


80%By 2040, close to

80 percent of North

America gas supplieswill be produced from

local unconventional

resources.



Rising oi production wireduce the need or imports

Oil and other liquid uels are critical to economic growth, and

to the transportation that moves people and goods. More than

95 percent o U.S. transportation relies on gasoline, diesel, jetuel and other products rened rom crude oil.

U.S. liquids demand is expected to decline by about

15 percent through 2040. This will be largely the result o

steep improvements in uel eciency or cars and other

personal vehicles, which will more than oset continued strong

gains in demand or uel or heavy duty trucks and other orms

o commercial transportation. At the same time, advances

in technology are transorming oil production in the United

States, Mexico and Canada.

Ater decades o relatively lat product ion, output o oi l

and other liquid uels in North America is projected to

rise by about 40 percent rom 2010 to 2040, as declines

in conventional crude oil are more than oset by rising

production o resources that until recently could not be

produced economically. The biggest contribution will come

rom Canadas oil sands, where production is expected to

triple over the Outlookperiod, reaching about 4.5 millionbarrels a day by 2040.

Large gains also are expected in production o tight oil (oil

extracted rom shale in states like North Dakota), biouels

(oil produced rom corn and other agricultural products) and

natural gas liquids (NGLs) liquids associated with natural

gas, including shale gas. Another major contributor will be a

projected doubling in production rom deepwater sources,

mostly in the U.S. Gul o Mexico. U.S. production o oil and

other liquid uels is projected to rise by 35 percent rom 2010 to

2040, reaching about 12 million barrels per day o oil equivalent

Not only will these trends reduce the need or oil imports

into North America, but ExxonMobil projects that by about

2030 North America will transition to become a net exporter

o liquid uels.

U.S. liquids supply and demand by type


30

25

20

15

10

5

02000 2020 2040

11

6

4

i l

il

Net imports

Liquids demand

North America liquids supply and demand by type


30

25

20

15

10

5

02000 2020 204

Crude and condensate

Other petroleum

Canadian oil sands

Biofuels

Net imports

Liquids demand

9

3

i l



S P E C I A l S E C T I O N


19/24The Outlook or Energy: A View to 2040 17The Outlook or Energy: A View to 2040 17The Outlook or Energy: A View to 2040 17

Global tradeEnergy imports and exports have been an important part o international trade

or more than a century. Over the next ew decades, North America will play

a new role in the global energy marketplace, as its rising oil and natural gas

production will enable the region to transition rom a net energy importer to a net

exporter. But one act will not change: Whether imports or exports, expanding

trade opportunities or any product including energy helps economies grow

and increases the prosperity o people in the United States and around the world.

50%Meeting global oildemand today requires

about one-half of the

worlds supplies to be

traded internationally.


20/24

Regional energy balances

Quadrillion BTUs

In-countrysupplies

Countryimports

9489

94

United States

2010 20402025

113

121120

In-countrysupplies

Regionalimports

North America

Regionalexports

2010 20402025

Energy trade heps ue economic growth

From ancient caravans to the e-commerce o today, people

have long engaged in trade to meet their needs. Trading

exchanging something you have or something others have

that you need or would preer benets both buyers and

sellers, and acilitates global economic growth, prosperity

and constructive relationships between nations.

Energy imports and exports are part o that picture, and

they are undamentally the same as the thousands o other

products traded globally on a daily basis including grain,

cars, computer products and steel.

Expanding trade opportunities or U.S. products including

energy creates economic value and strengthens the global

supply chain upon which all consumers depend. One-hal o

the oil used every day around the world and one-quarter o

the natural gas is traded international ly.

North America to become a net energy exporter

But the global energy market is dynamic, as evidenced by

whats happening today in North America. North America

is capitalizing on advances in technology that have tapped

huge energy resources shale oil and gas, oil sands, and

deepwater, or example that previously were uneconomic to

produce. At the same time, because o advances in energy

eciency and other trends, North Americas demand or

energy is expected to be essentially unchanged rom 2010.

The net result is that ExxonMobil expects that North America

which in 2010 imported 15 percent o its total energy and

35 percent o its oil is likely to transition to a net energy

exporter by about 2025. ExxonMobil expects that by 2040,

North America will have the opportunity to export about

15 percent o its natural gas production and about 5 percent

o its oil production.

In contrast, Europe and Asia Pacic are likely to continue to

call on international markets to meet a substantial portion o

their energy requirements. ExxonMobil expects that by 2040,

Asia Pacic nations wil l be importing close to 40 percent

o their total energy demand. The economic growth in that

region, and the energy required to uel it, will open more

opportunities or global trade.


15%By 2040, North

America will have

the opportunity

to export about

15 percent of itsnatural gas and

5 percent of its

oil production.


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2011 supply and net imports of crude oil and products

Nigeria 4%

Mexico 3%

Russia 3%

Iraq 2%

Colombia 2%

Algeria 2%

Venezuela 5%

Saudi Arabia 6%

Canada 13%

Angola 2%

Kuwait 1%

Norway 1%

United Kingdom 1%

Ecuador 1%

U.S. Virgin Islands 1%

U.S. supply

55%

U.S. net imports

45%

U.S. shale gas growth will provide expanding

economic opportunities through LNG exports

For example, rising demand or natural gas in Asia Paciic

and elsewhere will require the expansion o the global market

or liqueied natural gas (LNG). LNG, which is transported

on the water via tankers, enables natural gas to be shipped

anywhere in the world not just to places reached by

underground pipeline.

The United States is emerging as an exporter o LNG into world

markets, as projected growth in shale and other U.S. natural gas

production will provide enough supply to not only meet domestic

demand, but also additional supplies or export. As a study

commissioned by the Department o Energy recently concluded,

U.S. LNG exports will, under any scenario, have a positive eect

on the U.S. economy and the real income o U.S. households.

U.S. benefts rom access to global oil market

As the worlds largest oi l consumer and its third-largest oil

producer, the United States will continue to play an important

role in global oil trading.

Today, the United States is a net exporter o rened oil

products, as reneries along the Gul Coast and elsewhere

support not just domestic needs or gasoline, diesel uel and

other products, but also make these products available to

export elsewhere. The U.S. also imports crude and products

rom a host o countries around the world; this diversity

strengthens U.S. energy choices and helps avoid the impact

o supply disruptions.

The single biggest source o net U.S. crude oil and product

imports is Canada. The trading relationship betweenthe United States and Canada continues to benet both

economies. Canadas oil production is projected to double

rom 2010 to 2040, in large part because o production

rom the vast oil sands resources in western Canada. Rising

Canadian production coupled with growth in U.S. oil

production will not only reduce the need or imports into

North America, but also present an opportunity or both

countries to urther strengthen their relationship and create

jobs and economic value.

Even as North America approaches a time when it producesmore energy than it consumes, the region will continue

to beneit rom access to the global energy market. The

value o ree trade whether imports or exports is

a undamental principle o modern economics, and is

critical to U.S. energy security, economic growth and

competitiveness in the global marketplace.

The Outlook or Energy: A View to 2040 19


22/24

Rounding of data in the Outlookmay result in slight differences between totals and the sum of individual components.

Energy Demand (Quadriion BTUs Average Annua Change % Change

uness otherwise indicated) 2010- 2025- 2010- 2010- 2025- 2010- Share o Tota

Regions 1990 2000 2010 2025 2040 2025 2040 2040 2025 2040 2040 2010 2025 2040

UNITED STATES

Primary 81 96 94 94 89 0.0% -0.4% -0.2% 0% -5% -6% 100% 100% 100%

Oil 35 40 38 35 31 -0.5% -0.9% -0.7% -7% -13% -19% 40% 38% 35%

Gas 17 22 22 27 28 1.3% 0.3% 0.8% 21% 5% 27% 23% 28% 32%

Coal 18 22 20 13 6 -2.6% -4.7% -3.7% -33% -52% -67% 21% 14% 7%

Nuclear 6 8 9 10 13 1.1% 1.5% 1.3% 17% 25% 46% 9% 11% 14%

Biomass/Waste 2 3 3 3 3 0.6% 0.0% 0.3% 9% 0% 9% 3% 3% 3%Hydro 1 1 1 1 1 2.0% 0.3% 1.2% 34% 5% 41% 1% 1% 1%

Other Renewables 1 1 2 4 7 5.3% 3.0% 4.2% 118% 57% 242% 2% 4% 7%

End-Use Demand (incuding eectricity)

Total End-Use 61 72 70 71 68 0.1% -0.3% -0.1% 1% -5% -3% 100% 100% 100%

Residential/C ommercial 15 18 19 20 20 0.2% 0.0% 0.1% 3% 0% 3% 27% 28% 29%

Transportation 22 27 27 26 25 -0. 2% -0.5% -0.3% -3% -7% -10% 39% 37% 36%

Industrial 24 27 24 25 24 0.3% -0.4% 0.0% 5% -6% -1% 34% 35% 35%

Memo: Electricit y Demand 9 12 13 16 17 1.1% 0.7% 0.9% 19% 11% 31% 19% 22% 26%

Eectricity Generation Fue 29 37 38 39 39 0.2% -0.1% 0.1% 4% -1% 3% 40% 41% 44%

CO2 Emissions, Biion Tons 4.9 5.7 5.5 5.0 4.0 -0.7% -1.4% -1.1% -10% -19% -27%

NORTH AMERICA

Primary 95 114 113 116 112 0.2% -0.3% 0.0% 3% -4% -1% 100% 100% 100%

Oil 42 49 47 45 40 -0.3% -0.7% -0.5% -4% -10% -14% 42% 39% 36%

Gas 21 26 27 34 36 1.6% 0.4% 1.0% 26% 6% 34% 24% 29% 32%

Coal 20 23 21 14 7 -2.6% -4.7% -3.6% -32% -51% -67% 19% 12% 6%

Nuclear 7 9 10 12 14 1.2% 1.3% 1.3% 20% 21% 45% 9% 10% 13%Biomass/Waste 3 4 3 4 3 0.5% -0.3% 0.1% 7% -4% 3% 3% 3% 3%

Hydro 2 2 2 3 3 1.3% 0.3% 0.8% 21% 4% 27% 2% 2% 3%



Total End-Use 73 86 86 90 88 0.3% -0.2% 0.1% 5% -2% 2% 100% 100% 100%

Residential/Co mmercial 18 22 23 24 24 0.3% 0.0% 0.2% 5% 0% 5% 26% 26% 27%

Transportation 25 31 32 32 31 0.0% -0.2% -0.1% 0% -3% -3% 37% 36% 35%

Industrial 30 34 31 34 33 0.6% -0.2% 0.2% 9% -3% 5% 36% 38% 38%


Eectricity Generation Fue 33 42 43 46 46 0.4% 0.0% 0.2% 6% 0% 6% 38% 39% 41%

CO2 Emissions, Biion Tons 5.6 6.6 6.4 6.0 5.1 -0.4% -1.2% -0.8% -6% -16% -21%

WORLD

Primary 360 416 522 654 705 1.5% 0.5% 1.0% 25% 8% 35% 100% 100% 100%

Oil 137 158 178 208 223 1.1% 0.5% 0.8% 17% 7% 26% 34% 32% 32%

Gas 72 89 115 160 189 2.2% 1.1% 1.7% 39% 18% 65% 22% 24% 27%

Coal 86 90 134 156 131 1.0% -1.2% -0.1% 17% -16% -2% 26% 24% 19%Nuclear 21 27 29 41 59 2.4% 2.5% 2.4% 42% 45% 106% 5% 6% 8%

Biomass/Waste 36 41 49 55 55 0.8% 0.0% 0.4% 13% 0% 14% 9% 8% 8%

Hydro 7 9 12 16 19 2.3% 1.1% 1.7% 40% 18% 66% 2% 2% 3%



Total End-Use 290 327 404 501 540 1.5% 0.5% 1.0% 24% 8% 34% 100% 100% 100%

Residential/Co mmercial 87 98 116 138 148 1.2% 0.5% 0.8% 19% 7% 28% 29% 28% 27%

Transportation 65 81 99 124 141 1.5% 0.9% 1.2% 25% 14% 43% 24% 25% 26%

Industrial 138 149 189 240 250 1.6% 0.3% 0.9% 27% 4% 32% 47% 48% 46%


Eectricity Generation Fue 118 144 192 258 292 2.0% 0.8% 1.4% 34% 13% 52% 37% 39% 41%

CO2 Emissions, Biion Tons 21.3 23.6 30.5 36.7 36.3 1.2% -0.1% 0.6% 20% -1% 19%

Data table and glossary

GossaryExxonMobils Outlook for Energycontains global projections through 2040.

In the Outlook, we reer to standard units or the measurement o energy:

Biions o cubic eet per day (BCFD). This is used to measure volumes

o natural gas. One billion cubic eet per day o natural gas can heat

approximately 5 million homes in the U.S. or one year. Six billion cubic eet per

day o natural gas is equivalent to about 1 million oil-equivalent barrels per day.

BTU. British thermal unit. A BTU is a standard unit o energy that can be

used to measure any type o energy source. It takes approximately 400,000

BTUs per day to run the average North American household. (Quad reers to

quadrillion BTUs.)

Watt. A unit o electrical power, equal to one joule per second. A 1-gigawatt

power plant can meet the electricity demand o more than 500,000 homes

in the U.S. (Kilowatt (KW) = 1,000 watts; Gigawatt (GW) = 1,000,000,000

watts; Terawatt (TW) = 1012 watts). Three hundred terawatt hours is

equivalent to about 1 quadrillion BTUs (Quad).

Miions o oi-equivaent barres per day (MBDOE). This term provides

a standardized unit o measure or dierent types o energy sources (oil,

gas, coal, etc.) based on energy content relative to a typical barrel o

oil. One million oil-equivalent barrels per day is enough energy to uel

about 5 percent o the vehicles on the worlds roads today.



23/24

The Outlook for Energyincludes Exxon Mobil Corporations internal estimates and

forecasts of energy demand, supply, and trends through 2040 based upon internal data

and analyses as well as publicly available information from external sources including

the International Energy Agency. This report includes forward looking statements. Actual

future conditions and results (including economic conditions, energy demand, energy

supply, the relative mix of energy across sources, economic sectors and geographic

regions) could differ materially due to changes in technology, the development of new

supply source, political events, demographic changes, and other factors discussed herein

and under the heading Factors Affecting Future Results in the Investors section of our

website at www.exxonmobil.com. This material is not to be used or reproduced without

the permission of Exxon Mobil Corporation. All rights reserved.


24/24

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