Energy Outlook: A View to 2040 Nazeer Bhore Detroit Automotive Petroleum Forum Detroit, MI April 16, 2014 This presentation includes forward-looking statements. Actual future conditions (including economic conditions, energy demand, and energy supply) could differ materially due to changes in technology, the development of new supply sources, 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. The information provided includes ExxonMobil's internal estimates and forecasts based upon internal data and analyses as well as publically-available information from external sources including the International Energy Agency. This material is not to be used or reproduced without the permission of Exxon Mobil Corporation. All rights reserved. Energy Outlook Development 100 countries ExxonMobil 2014 Outlook for Energy Energy Outlook Development 15 demand sectors Residential Chemicals Commercial Asphalt Lt. Transportation Lubricants Hvy. Transportation Flaring Aviation Energy Industry Marine Agriculture Rail Heavy Industry Power Generation ExxonMobil 2014 Outlook for Energy Energy Outlook Development Motor Gasoline Asphalt Solar Distillate Natural Gas Wind Naphtha Nuclear Bio-mogas Jet Fuel Biomass/Other Bio-distillate Fuel Oil Coal Electricity LPG Hydro Market Heat Lubes ExxonMobil 2014 Outlook for Energy Geothermal 20 fuel types Energy Outlook Development Technology & Policy ExxonMobil 2014 Outlook for Energy Energy Outlook Development Trade Flows ExxonMobil 2014 Outlook for Energy Global Progress Drives Demand Population GDP Energy Demand Billion Trillion 2005$ Quadrillion BTUs Average Growth / Yr. 2010 – 2040 0.8% Average Growth / Yr. 2010 – 2040 2.8% Average Growth / Yr. 2010 – 2040 1.0% Energy Saved ~500 Non OECD OECD ExxonMobil 2014 Outlook for Energy Electricity Generation Leads Growth Energy Demand by Sector Quadrillion BTUs 2040 2025 2010 ExxonMobil 2014 Outlook for Energy Industrial Industrial Energy Demand By Region By Sector Quadrillion BTUs Percent Share 2010 Other Rest of Non OECD Energy Industry Heavy Industry India China Chemicals OECD ExxonMobil 2014 Outlook for Energy 2040 Industrial Energy Demand By Region By Fuel Quadrillion BTUs Percent Share 2010 Other Naphtha NGLs Rest of Non OECD Electricity Other Oil India China Coal Gas OECD ExxonMobil 2014 Outlook for Energy 2040 Transportation Transportation Demand Sector Demand Commercial Transportation by Region - 2010 MBDOE MBDOE Rail Marine Aviation Heavy Duty Light Duty ExxonMobil 2014 Outlook for Energy Transportation Demand Sector Demand Commercial Transportation by Region - 2040 MBDOE MBDOE Rail Marine Aviation Heavy Duty 2010 Light Duty ExxonMobil 2014 Outlook for Energy Technologies for Light Duty Transport well-to-wheels basis crude recovery crude transportation crude refining to products production of fuel 20% GHG/mile product storage & transportation retail site gasoline vehicle Consumers’ use of fuel 80% GHG/mile technologies for fuel production technologies for consumers’ use of fuel shorter-term • energy efficiency • flare reduction • cogeneration shorter-term • conventional vehicle technology improvements − engines (e.g. adv. lubricants); efficient transmissions − others (e.g. tire liners, low weight plastics) • advanced vehicles − hybrid (e.g. lithium ion battery materials) − advanced diesel − CNG longer-term • breakthrough vehicles − “HCCI” or “CAI”; fuel cell (e.g. on-board H2 generator) − plug-in hybrid and EV (e.g. lithium ion battery materials) longer-term • second generation bio-fuels • Carbon Capture and Storage (CCS) Source: U.S. Basis - WTW Study, Argonne National Lab, 2005 Light Duty Vehicle Efficiency Car Fleet by Type Range of Average Vehicle Efficiency Million Cars On-Road Miles per Gallon Average Fleet Europe U.S. ExxonMobil 2014 Outlook for Energy Transportation Fuel Mix by Region Asia Pacific North America Europe MBDOE MBDOE MBDOE Other Natural Gas Fuel Oil Jet Fuel Biodiesel Diesel Ethanol Gasoline ExxonMobil 2014 Outlook for Energy Natural Gas Into Transportation By Sector 2040 by Region BCFD BCFD 18 10 Rail 15 8 12 Marine 6 9 4 6 Heavy Duty 2 3 0 2000 Light Duty 2010 2020 ExxonMobil 2013 Outlook for Energy 2030 2040 0 AP NA LA ME EU RC AF Electricity generation Electricity Demand Global Electrical Demand by Sector Global Electrical Demand by Fuel Thousand TWh Thousand TWh Other Industry Gas Heavy Industry Coal Commercial Nuclear Wind & Solar Residential Transportation ExxonMobil 2014 Outlook for Energy Oil Other Renewables Electricity Use by Region Electricity Use 1000 KWh per Capita 2040 Population (Billions) ExxonMobil 2014 Outlook for Energy Growth in Electricity Demand 2010 – 2040 ~90% Economic Choices for U.S. Electricity Plant Cost, Startup 2030 Baseload Intermittent 2013 cents/kWh Reliability Cost* Coal Reliability Cost* Gas $60/tonne of CO2 $0/tonne Gas Coal Nuclear *Reliability cost includes integration, backup capacity and additional transmission costs. ExxonMobil 2014 Outlook for Energy CCS Onshore Wind Solar PV Utility CCS Use for Power Generation Least Cost Generation Technology Zones 140 CO2 Cost , $/T 120 Supercritical Coal-CCS Gas CCGT-CCS 100 80 60 40 Gas CCGT Supercritical Coal 20 0 2 4 6 8 Gas Price, $/MBtu Source: Society of Petroleum Engineering, SPE-139716-PA 10 12 14 Emissions CO2 Emissions Plateau Energy-Related CO2 Emissions by Region Billion Tonnes Emissions per Capita Tonnes / Person 2010 Asia Pacific 2040 Middle East Africa Latin America Russia/Caspian Europe North America ExxonMobil 2014 Outlook for Energy Energy Mix Continues to Evolve Quadrillion BTUs 0.7% 2040 Average Growth / Yr. 2010 - 2040 1.7% 2010 1.0% 0.0% 2.5% 0.4% 5.9% ExxonMobil 2014 Outlook for Energy 2.0% Supply Liquids Supply Liquid Supply by Type Crude and Condensate Resource* MBDOE Trillion barrels of oil Biofuels Oil Sands Tight Oil Deepwater Other Remaining Resource NGLs Conventional Crude & Condensate Cumulative Production through 2040 * Source: IEA ExxonMobil 2014 Outlook for Energy * Source: IEA Gas Resources Abundant; Supply Diversifies Remaining Recoverable Resource* Gas Production by Region Gas Production by Type Thousand TCF BCFD BCFD ROW Africa Africa AP Middle East NA Unconventional Middle East Unconventional Asia Pacific Asia Pacific Russia/ Caspian Russia/ Caspian Europe Conventional Europe Latin America Latin America North America * Source: IEA 2012 ExxonMobil 2014 Outlook for Energy * Source: IEA North America Conventional LNG Demand Triples and LNG Supply Diversifies LNG in 2040 BCFD Other Europe Atlantic Basin Asia Pacific Middle East 2010 ExxonMobil 2014 Outlook for Energy Pacific Basin Liquids Trade Russia/Caspian North America Europe Middle East Asia Pacific Latin America MBDOE Net Exports Net Imports ExxonMobil 2014 Outlook for Energy Africa Natural Gas Trade Russia/Caspian North America Europe Middle East Asia Pacific Latin America BCFD Net Exports Net Imports ExxonMobil 2014 Outlook for Energy Africa Technology Evolution Summary • • • • • Technology development requires longer-term focus and is unpredictable – – – – Benefits from a portfolio approach; Learning from failure advises future projects May require business model innovation, especially in “new-to-world” applications Sometimes driven by science and technology developments in other unrelated areas Extent, pace, and source of future cost reduction cannot be precisely predicted • Unconventional gas – current low costs were not expected a few years ago • Batteries – 5x energy density increase in two centuries – another 15x increase = gasoline Technologies are likely commercialized in higher value segments before they are used in lower value segments – – – Lithium ion batteries – cell phones > power tools > hybrids > electric vehicles CCS – NG separation/EOR > Power plants/storage > Refineries/storage Butanol: Bio-n-butanol – displaces chemical n-butanol > fuel additive > neat fuel Technology evolution typically crosses national boundaries but government funding is frequently driven by desire to create national competitive advantage, E.g. Li-ion battery – – – – Lithium ion batteries concept, Whittingham, Exxon Corporate Lab, NJ in 1970s Anode – Yazimi – France/ Cathode – Goodenough – Texas, USA in 1980s Separator Film, Tonen in Japan in 1980s, former Exxon and Mobil Affiliate Li-ion use in consumer devices, cell phone use, Sony in Japan in 1990s Global widespread technology adoption is driven by long-term economic fundamentals Market driven selection of the solutions will ensure longer-term viability Source: Bhore, N.A., US Association of Energy Economics, 2012 Annual Meeting. Conclusions ExxonMobil 2014 Outlook for Energy
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