Exxon Mobil forecasts steady oil use through 2050 despite rise in renewables

Global petroleum giant Exxon Mobil has predicted that the world will use almost as much crude oil in 2050 as it does currently.

The company also expects the world’s natural gas demand to rise by 21% by 2050, with most of that growth in industrial sectors to fuel manufacturing and as chemical feedstock.

While Exxon agrees that passenger cars will consume less fossil fuel, it says oil demand will grow by 2%, with large trucks, the aviation industry and industrial and chemical plants using more oil.

Demand to plateau

In its annual “Global Outlook” report, Exxon is forecasting oil demand will plateau beyond 2030 and remain above 100 million barrels per day through to 2050.

It said that while changes in the world’s overall energy mix are coming, oil and natural gas will remain essential and suggests oil production will naturally decline at a rate of a million barrels per day or a rate of about 15% per year.

With that in mind, Exxon says that as the world’s demand for oil and natural gas remains strong and production declines, sustaining investment is more important than ever.

New oil crisis

The report – which forms the basis for the company’s business planning and is scientifically grounded in its deep understanding of long-term market fundamentals – says that with no new investment, global oil supplies would fall by more than 15 million barrels per day in the first year alone and from 100 million barrels per day to less than 30 million by 2030, about 70 million barrels short of what’s needed to meet demand every day.

Based on price responses to past oil supply shocks, it estimates that the permanent loss of 15% of oil supply per year could raise oil prices by more than 400%.

By comparison, prices rose 200% during the oil price shocks of the 1970s.

That, in turn, would likely see unemployment rates reach 30% within 10 years, higher than those recorded during the great depression of the 1930s.