The closely watched annual forecast of energy trends concludes the growth of U.S. and Canadian oil and gas production has staying power and could lead to more international shipments of oil and gas.
Exxon's forecast follows similar estimates by the U.S. Energy Information Administration and the International Energy Agency, which have recently predicted North America will produce more energy than it uses in just a few decades, a shift with geopolitical as well as economic ramifications.
Exxon predicts that an anticipated decline in coal usage by power plants will accelerate as more efficient natural-gas-fired plants are built. It also forecasts coal use will drop 33% from 2010 to 2025,substantially more than its previous 23% estimate.
The economics of natural gas in the power-generating sector continue to look even better over time.
The U.S. is in the midst of a renaissance of oil and gas production thanks to a combination of technologies, including hydraulic fracturing and horizontal drilling, which are unlocking deposits trapped in shale formations throughout the country.
Daily U.S. oil production reached a 15-year high in September, and is expected to keep climbing. U.S. natural-gas production will outpace the nation's demand by 2020.
Growing production from Canada's oil-sands region, much of it exported to the U.S., and the continued growth of deep-water Gulf of Mexico production is also bolstering forecasts.
The net energy exports forecast for North America by Exxon don't mean the U.S. would be energy independent, however, as it will still rely heavily on Canadian crude production.
Global energy demand will increase 35% from 2010 to 2040, with most of the increased demand coming from developing nations like India and China.
Developed regions like the U.S., Canada and Europe will see their demand flat or declining as they become more efficient, the company said. By 2040 developed nations are expected to generate 80% more economic output than in 2010 but use the same amount of energy.
Source: Tom Fowler, Wall Street Journal
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