At this time of year there is no shortage of commentators and pundits who will look back on 2011 – but rather than do the same on this blog, let’s instead look ahead at what the future holds for America’s energy.
For that, I turn to ExxonMobil’s Outlook for Energy, released earlier this month. The published version of the Outlook focuses mostly on global energy trends to 2040. But as part of putting together the Outlook, ExxonMobil also takes a detailed look at individual countries, including the United States. Here are some of our findings.
Our economists and energy experts see some big changes to America’s energy landscape over the next 30 years. As you’ll see, these changes are positive ones, because they produce a future in which the United States continues to have the reliable, affordable energy it needs to support economic growth and job creation, while also reducing the environmental impact of its energy use.
Here are just a few highlights of what the U.S. energy landscape is expected to look like in 2040:
1. We’ll use energy far more efficiently. For example, in 2040, new cars sold in the U.S. will average 45 miles per gallon (mpg), compared to 22 mpg in 2010. The biggest reason is the growing use of hybrids and other advanced vehicles, which will jump from 2 percent of new car sales in 2010 to nearly 80 percent in 2040. We’ll also use energy more efficiently in our homes, businesses and electric utilities.
We’ll use less energy, even as our economic output doubles. U.S. energy demand will decline by 5 percent from 2010 to 2040, even as our gross domestic product doubles and population rises. Direct use of fuels for the transportation, industrial and residential sectors will fall, while fuels used to generate electricity will rise by about 10 percent.
2. The United States (and Canada) will produce more domestic oil and natural gas. Much of this growth will come from new technologies – developed here in the U.S. – that enable us to tap the oil and natural gas found in shale and other similar formations. North American unconventional natural gas production is projected to grow by almost 150 percent from 2010 to 2040, when it will account for 70 percent of all U.S. natural gas supply. In addition, North American oil production from deepwater sources will double over the period, with the vast majority of that growth coming from the Gulf of Mexico.
We’ll diversify our energy portfolio. In addition to the growth in U.S. deepwater and unconventional sources, production of Canadian oil sands will nearly triple by 2040. This increase in North American energy available to meet U.S. and world demand is good news considering that the global demand for energy is expected to rise by about 30 percent in the next three decades. To meet this demand, the global market will need countries around the world – the United States included – to step up production of all types of energy.
3. We’ll use cleaner fuels. Over the next 30 years, the U.S. will see a pronounced shift toward natural gas, nuclear and renewable fuels due in part to policies that encourage less-carbon intensive fuels. By 2040, 55 percent of America’s energy will come from these three fuel types, while use of coal will drop by more than 50 percent. Demand for natural gas will grow by nearly 20 percent to 2040, while wind will be the fastest-growing fuel in the renewable category – generating more than 10 percent of America’s electricity in 2040.
By 2040, America’s CO2 emissions will be back to levels not seen since the 1970s. U.S. emissions of carbon-dioxide will fall by 25 percent from 2010 to 2040, as a result of improved energy efficiency and a switch to cleaner-burning fuels, such as the switch from coal to natural gas for power generation. Natural gas emits up to 60 percent less CO2 emissions than coal when used for electricity generation.
The changes I have just described will be driven in part by economic and demographic trends. But many of them – finding new energy supplies, improving energy efficiency – will continue to be driven by ongoing advances in technology, as well as billions of dollars in investment on the part of the energy industry and others.
But this relatively optimistic outlook for the United States energy landscape over the coming decades is not predetermined. It will take huge investment in new energy projects, a continued stream of well–qualified scientists and engineers, and sound government policy to make it happen.
As our Outlook for Energy noted, “How much and what types of energy the world will use through 2040 – and beyond – will depend on the actions taken not just by companies like ExxonMobil, but by everyone – including policymakers and consumers.”
As we look ahead to a new year – a year that will include a U.S. presidential election and continued U.S. economic recovery – we need to stay focused on America’s long-term future, and promote sound energy policies that support innovation, investment and growth through 2040 and beyond.