Exxon: Oil demand to rise 50%
Dallas Morning News (www.wfaa.com)
By Elizabeth Souder
December 14, 2005
Energy industry can supply what's needed, company says
Exxon Mobil Corp. forecasts global energy demand will rise 50 percent by 2030 and oil will remain the dominant fuel source.
The Irving-based oil company said Tuesday that economic growth in developing countries will drive much of the demand, along with population growth.
The forecast comes one day after the Energy Department predicted oil prices will remain north of $50 a barrel for years.
Exxon declined to forecast energy prices, saying only that its expectations of supply and demand don't support current high prices.
And Exxon said it's confident the energy industry can meet demand, a sentiment some industry experts don't share.
Most experts blame rising demand for the run-up in prices in the past couple of years.
Exxon disagrees with skeptics who warn that oil production will soon peak because humans have used nearly half the oil in the world.
"What we've seen, through doing this for decades, is that repeated predictions of peak oil have proved wrong time after time," Jaime Spellings, Exxon's general manager of corporate planning, said in a conference call.
"We're very comfortable with the resource size to support the production outlook," he said, adding that new technology plays an important role in meeting demand.
Electricity generation is the fastest-growing energy need, boosting demand for coal and natural gas as well, Exxon said.
Oil use will grow more slowly, but oil will remain the dominant fuel, Exxon predicts, driven by transportation needs.
The company expects the global fleet of cars and light trucks to rise by 1 percent a year until 2030, with the fleet in Asia Pacific quadrupling in that time.
Demand for hybrid cars in North America and Europe should eventually begin pushing demand for gasoline and diesel vehicles down, the company said.
Exxon expects gasoline demand in North America to remain constant for the next 30 years as cars become more efficient, and more people buy diesel and hybrid cars. But demand for gasoline in Asia Pacific will probably triple.
The world's largest company by revenue predicted the energy industry will keep up with that demand, though North America will come to rely more heavily on oil from members of the Organization of Petroleum Exporting Countries.
Exxon estimates global conventional oil reserves, or the amount of oil that can be produced through conventional methods, at 3.2 trillion barrels.
Nonconventional resources boosts the amount to 4 trillion, accounting for new discoveries and improved technology.
Through 2004, the energy industry has produced about 1 trillion barrels, leaving more than 2 trillion barrels of conventional resources still to be produced, Exxon said.
Only the U.S. has passed its peak oil production.
That's a point of contention among some energy experts.
In a hearing last week before the U.S. House Subcommittee on Energy and Air Quality, several experts and representatives testified that global oil reserves will peak in the next few decades, causing prices to rise dramatically and shifting more political power to oil producing countries.
So far, few decision-makers are paying much attention to peak oil theorists.
Rep. Tom Udall, D-N.M., and a member of the Congressional Peak Oil Caucus, called on Congress to develop a plan to cut oil use and move to a different fuel.
"The sooner we start, the smaller those sacrifices will be," Mr. Udall said, testifying that little is being done.
Exxon doesn't seem to expect such efforts to derail oil's dominance anytime soon.
The company predicted oil will retain the largest market share of the energy industry.
Oil and natural gas will still have 60 percent of the market by 2030, the company said.
The company stressed that technology to explore and produce oil is critical to meeting demand challenges.
The company also expects demand for natural gas and coal to rise, as demand for all kinds of fuel increases.
Wind and solar demand should rise by 11 percent a year during the next 25 years, but those fuels will serve only 1 percent of the market, Exxon predicts.
The company expects sentiment in the U.S. on nuclear energy to turn in the next two decades, boosting demand for nuclear fuel.