The Energy Future

December 12, 2011 | 2 Comments

ExxonMobil has their 2012 Outlook out for anyone to see and its different from what the government agencies are saying by some pleasing measures and some measures that will disappoint some folks.

The variance comes from ExxonMobil being in business where careers, investors and consumers have to live with the results.  As the world’s largest free and independent petroleum company ExxonMobil has the most careers, largest amount and number of capital holders and countless consumers.  With investment planning running over a decade and money at risk in the hundreds of billions of dollars in such time frames, what these folks think matters to everyone.

To no great surprise the forecast calls for more worldwide energy use through 2040 by 30%.  Natural gas is expected to grow, and surprisingly coal is expected to decrease on a long trend down.

Catch this brief statement – Demand growth would be more than 4 times the 30% projection without the expectation of efficiency gains.  Obviously some consumers are going to do better than others and the hint in case it’s missed is, efficiency gains are going to be crucial to one’s economic welfare.

Global Fuel Mix By Decade ExxonMobil. Click image for the largest view.

On that point ExxonMobil is noting that steep improvements in personal transport are going to be vital as hybrids push the new car efficiency to 50 mpg.  The sooner one own transport gets there the better off over time one will be.

The Outlook mentions horizontal drilling and fracking reservoirs.  By 2040 the high tech natural gas production should clear 30% of the total consumption.  That’s cause to pause on the hysterics about the technology.  30% is a huge marginal percentage, meaning a loss of the technology would drive prices astronomically higher.

ExxonMobil isn’t just looking at petroleum because a tiny bit of oil and a substantial amount of natural gas goes to electric power generation.  Here is where the numbers truly surprise and are due a great deal of thought. ExxonMobil is projecting that global electricity demand will rise by 80% through 2040 in national economies for living standard improvement and consumers will switch to electricity from other sources such as oil, coal or biomass. By 2040, four out of every 10 units of energy produced in the world will be going toward the production of electricity.

Even at that 80% rise the Outlook foresees coal use to start shrinking and natural gas use to increase dramatically to over 30% as well.

Depending on one’s viewpoint good or bad, ExxonMobil points out that nuclear power use could well double by 2040 in nations worldwide.  One might think that the U.S. would do very well from a national security and economic standpoint to get moving on less dangerous and less expensive nuclear power options.

The projection for 2040 holds that more than 15 percent of the world’s electricity will be generated by renewable fuels – solar, wind, biofuels, biomass, geothermal and hydroelectric power. The fastest growing of these will be wind, which will increase by about 8% per year from 2010 to 2040.

The brightest point is ExxonMobil’s calculations suggest that as the world personal vehicle fleet doubles the total fuel use will be essentially flat.  Against that is commercial use, trucks, planes, ships, and trains’ energy demand will grow 70%.  The Outlook is calling for 30% more oil production to keep up.

The Outlook is honest enough to point out some factors that could revise the forecast dramatically.  The leading ideas are in low cost storage for wind electricity and the fact that high utilization could speed up the wind installations.  Then battery costs on a steep decline would have a major impact on electric drive personal vehicles.  Then there are breakthroughs in petroleum production in research that might make everyone’s ideas obsolete.

The ExxonMobil 2012 Outlook pdf file is only 43 graphic rich pages. It’s a written narrative more than a track through data rich statistics.  And the variance from the Energy Information Agency isn’t far off.  Its time well spent to leaf through it.

The graphic above makes clear that is only been a couple hundred year since coal got a market share start, about 100 years for oil then natural gas to take off and barely 50 years for everything else.  It takes decades for energy infrastructure to take hold and gain major market share.

The question on the technological front is and will remain for some time which technologies will earn a big chunk of the bar in future graphics.  It’s quite clear for now that those bar segments aren’t going to change much in the coming decades without some major production and infrastructure cost break throughs.


2 Comments so far

  1. John on December 12, 2011 10:31 AM

    I don’t think the general projections will be much different to those from the lawrence livermore labs at “flowcharts llnl gov”.

    On that graph the renewables is almost entirely dominated by hydro, with the rest being close to the 1% mark.

    If nuclear is allowed to grow then the situation could also change for nuclear made fuels as fossil supplies diminish.

    If only the solar fans would examine these graphs to get a feel for the magnitude of energy production they might learn something.

  2. +Alex White on December 20, 2011 3:03 PM

    Of course burning natural gas is much better than burning coal. Because of shale gas long-term contracts for natural gas are available.

    There is another reality about renewables, primarily solar and wind, they cannot replace coal and natural gas generated electricity by any great amount. They are simply expensive supplements.

    I’m following this guy in Austin, TX – Andrew West who has some technology to burn natural gas even cleaner (no NOX and 80% less CO2). It’s an old technology called oxy-fuel where the natural gas is blended with pure oxygen. In the past it wasn’t adopted because the oxygen was too expensive. He claims to make it affordable enough to produce electricity that’s less than coal-generated electricity.

    If I understand his math correctly, we can retrofit all coal and natural gas power plants (and many industrial boilers) economically, meaning the utilities could pay for it without an increase in the cost of electricity. The result would be the elimination of NOX and SOX and an 80% reduction of CO2. Solar and wind advocates can’t make those claims. Despite spending $1 trillion in the last 10 years, solar and wind installations didn’t even keep up with new demand. That means we made NO progress on reducing CO2 emissions.

    Too much of the energy conversation seems to be “fossil fuels versus renewables” and we’re missing the chance to make significant progress by simply cleaning up the burning of natural gas with oxygen. There’s more, he also provides affordable nitrogen to the power plants for cooling so they no longer need to damage rivers, lakes and streams.

    He has some other solutions, too. Agriculture and education included.

    It’s worth a look:

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