Energy Ink

A roundup of views on Exxon’s outlook to 2040

Hybrid vehicles and lots of oil to be had in coming decades: Exxon

December 09, 2011

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More on Exxon’s energy outlook from around the Web:

Javier Blas notes at the Global Exchange blog over at the Globe and Mail that the big takeaway from Exxon’s outlook to 2040 is the global shift from natural gas to coal. Sure, that outlook fits nicely with Exxon’s own investment priorities (like it’s supermajor cousins, the firm has steadily invested in shale properties across the U.S.), but it would be a mistake, Blas writes, to read the projection purely as an exercise in parochial strategic planning.

The conclusions fit with the talk by many energy executives, who see a growing role for natural gas in years to come.

Foreign Policy contributing editor Steve LeVine, an astute Exxon watcher, zeroed in on the company’s views on the evolution of the transportation market. In previous iterations of its outlook, LeVine notes, Exxon predicted that by 2030, 25 per cent of new vehicles sold globally will be electric or hybrids. The latest projection says hybrids and electric vehicles will comprise 45 per cent of the total fleet of vehicles; while the share of gasoline-driven vehicles falls from 75 per cent in 2030 to 35 per cent in 2040 – “an enormous shift,” LeVine writes. The catch, he observes, is that while by 2040, 40 per cent of all vehicles on the road will be hybrids, just five per cent will be electric or plug-in hybrids. Gasoline, in other words, still rules the roost. On this note, though, Exxon leaves room for the unforeseen. LeVine writes:

While the company’s billions of dollars in investment is based on the outlook, giving it “a huge stake in getting it right,” it leaves room for unforeseen technological breakthroughs. For example, “faster-than-expected drops in battery costs would likely make electric cars more of a factor through 2040 than we expect them to be.”

Chris Kahn at the Associated Press also picked up on the vehicle meme. He quoted William Colton, Exxon’s strategic planning chief, who told journalists on a conference call that although vehicle mileage standards could make battery-powered cars more attractive for consumers, gasoline will continue to occupy a large share of the hybrid market. “One gallon of gasoline has enough energy to recharge an iPhone for almost 20 years,” Colton told AP.

Yadullah Hussain at the Financial Post plucked from the report a few details on unconventional fuels.

[Exxon] believes that oil sands from Canada and Venezuela will contribute 25% of North and South America’s production. In addition, offshore, tight oil and natural gas liquids (NGLs) will see significant growth through 2040, thanks to new techniques that have enabled the extraction of oil and gas from shale and other challenging rock formations.

You can link to Exxon’s outlook here.

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