ExxonMobil’s outlook debunks imminent energy transition predictions
- Insists on sustained oil demand till 2050
Sopuruchi Onwuka
Frontline global energy company, ExxonMobil, holds strongly that energy transition from fossil fuels may not be very imminent as touted by some industry analysts; pointing at indications that suggest that actual volumes of petroleum consumed globally might likely rise from current levels.
The Oracle Today reports that industry analysts in Africa including the Africa Petroleum Producers Organization (APPO), investors and Nigerian National Petroleum Company (NNPC) Limited, have all predicted that the urgency of energy transition is overhyped and out of reality.
The secretary-general of the United Nations, Antonio Guterres, on Monday called on world leaders to phase out oil and gas from their economies and stop new exploration in hydrocarbons. He said greenhouse gases overwhelmingly generated by burning fossil fuels are cooking our planet
In a call to the leaders of the G20 group of industrialized countries, Guterres urged the world to stop using oil, gas, and coal, and suspend further expansion in hydrocarbon exploration in order to avoid the apocalyptic catastrophe.
But the G20 group hosts the world’s most industrialized nations that burn fossil fuels to fire up manufacturing, utility and commerce.
Apart from the transportation transportations industry where electric vehicles and bikes have recorded significant displacement of fossil fuels, oil and gas remain the dominant fuel for heavy equipment, Industrial machines, marine equipment, ships and aviation vessels.
Evolution of renewable power to displace gas and coal fired power generating plants has remained slow, costly and inefficiently low in capacity.
In its 2024 Global Outlook Report, ExxonMobil presented a challenging perspective for those advocating for a rapid energy transition away from fossil fuels.
Contrary to the aggressive decarbonization scenarios laid out by agencies like the International Energy Agency (IEA), Exxon predicts that global oil demand will not only remain robust but could even increase, staying above 100 million barrels per day by 2050.
The sustained demand pressure predicted by ExxonMobil suggests that the energy transition, as envisioned by many, may be unrealistic without significant adjustments.
ExxonMobil forecasts a 15% increase in total energy consumption by 2050, driven by population growth and economic development, particularly in emerging markets. Population growth projection puts additional pressure on the energy supply, making a sudden shift away from oil unlikely.
And despite the rapid expansion of renewable energy and an anticipated 80% increase in electricity usage, Exxon predicts that oil demand will remain high, exceeding 100 million barrels per day through 2050. The outlook highlights the enduring reliance on oil, even as the world seeks to diversify its energy mix.
ExxonMobil’s Energy and Strategic Planning Director, Chris Birdsall, emphasizes that oil and gas demand will continue to grow in the coming years, pointing to a “very, very long runway” for these energy sources.
The company warns in the report that without new investments in oil production, the world could face a shortfall of 70 million barrels per day by 2030, leading to significant price spike and underscoring the ongoing necessity of oil in meeting global energy needs.
While acknowledging that global greenhouse gas emissions are expected to decline starting in 2030 due to the growth of renewables, it maintains that oil will continue to play a crucial role even if every new car sold by 2035 is electric.
The report estimates that oil demand in 2050 would still be around 80 million barrels per day, reflecting the deep integration of oil in the global economy.
Exxon’s forecast for 2050 oil demand is about 25% higher than BP’s, which suggests that emissions reductions will happen sooner. This divergence in projections highlights differing views on the pace and feasibility of the energy transition.
Exxon’s outlook suggests that the sustained pressure from ongoing high oil demand makes a rapid and complete transition away from fossil fuels highly challenging. The report raises critical questions about the realism of current energy transition goals and whether the world can meet these targets without continued reliance on oil.
