Enduring Demand for Oil and Gas
Exxon Mobil has released a forecast indicating that fossil fuels, despite global efforts to shift towards renewable energy, will still constitute over half of the world’s energy mix by 2050. The oil giant expects oil demand to plateau post-2030 but maintain levels above 100 million barrels per day, underscoring the persistent reliance on traditional energy sources.
Projections Amidst Electric Vehicle Growth
The projection remains stark even with the potential surge in electric vehicle adoption. Exxon estimates that even if every new car sold by 2035 is electric, oil demand will still hover around 85 million barrels per day by 2050, mirroring consumption levels from 2010. This projection considers the broader usage of oil beyond gasoline, such as in manufacturing, chemical production, and aviation.
Challenges in Achieving Climate Goals
The robust demand for oil and natural gas poses significant challenges to achieving global climate objectives, including the net-zero carbon emissions target by 2050 intended to limit global warming to 1.5 degrees Celsius. The International Energy Agency (IEA) has warned that the pathway to these goals is narrowing.
Renewable Energy and Market Dynamics
While renewable energy capacities are rapidly expanding—seeing a 50% increase in 2023 alone according to the IEA—the transition faces resistance. Notable figures like Saudi Aramco’s CEO Amin Nasser have critiqued the feasibility of completely phasing out fossil fuels, particularly citing rising demands in emerging markets.
Investment Needs and Economic Implications
Exxon underscores the necessity for continued investments in new oil projects to meet ongoing global demand. The company warns that halting new investments could lead to a severe supply shock, skyrocketing energy prices, and an ensuing economic crisis, projecting a potential decline in global oil supplies by more than 15 million barrels per day in the first year without fresh investments.
Source: cnbc.com
