Analysis by Energy Workforce President Tim Tarpley
Exxon Mobil published a large market forecast this week looking at what the world energy markets are anticipated to look like in 2050. According to the report, oil and gas will remain the dominant sources of energy through the middle of this century. The report predicts that global oil demand will remain above 100 million barrels a day through 2050, even as more renewable sources come online. Specifically, the report says that by 2050 oil demand around the world will account for 54% of the energy mix, with coal at 13%, nuclear at 6%, bioenergy at 10% and renewables (wind, solar and hydro) at 15%.
One of the main reasons the report makes this forecast is population increases; they expect the world population to increase to 10 billion by 2050, up from 8 billion today. Much of this increase will come from developing countries, which will contribute to 25% of said increase. The report predicts that developing countries will actually decrease their energy use by 10% due to increased efficiencies even as their populations increase, although at a slower rate. The report also highlights that while electric vehicles will likely see increased adaptation, overall, their use will not make a significant change in overall oil demand due to the many other uses for oil and gas.
This report is in slight contrast to the IEA projection that anticipates that oil and gas demand will peak in 2029 at 105.6 million barrels a day; however, this prediction seems likely to be revised as time goes on. In addition to efficiencies in energy use in developed countries, it is also important to remember that oil and gas are being produced more efficiently than ever. These efficiencies allow for more energy to be produced with fewer inputs, a fact that is often not taken into account in these types of projections. With energy security on the forefront of policymakers’ minds throughout the world and oil and gas the most reliable, affordable, and plentiful source of energy to meet the world’s growing energy demands, it appears the Exxon outlook may be one point closer than other past predictions.
Ukraine Launches 2nd Incursion Into Russia in the Belgorod region
Sketchy reports from the front lines in the Russia-Ukraine war indicate that Ukraine has launched a 2nd incursion into Russia in the Belgorod region. This incursion is on top of the attack in the Kursk region that has been underway since August 6th. Ukraine claims that it now controls 100 Russian settlements within Russian territory following the start of that incursion. Russia so far has been hesitant to divert troops from the front lines of its own invasion of Ukraine to defend its territory. Some analysts believe that Russia would have to divert 20,000-30,000 troops in order to fully regain the captured territory, as Ukraine has now moved in roughly 10,000 troops.
This situation is putting increased pressure on Russian President Putin as it is the first time since World War 2 that a foreign power has controlled Russian territory. The successful Ukrainian invasion has served as a reminder that the war is far from over and that it is possible Ukraine could still ultimately win. European energy markets have been a little jumpy on the news as Russian gas flows from these regions through Ukraine into Europe. The current transit deal between Russia and Ukraine expires on December 31st, and Ukraine has indicated it will not renew as long as Russia continues its invasion. The Russian side has indicated they will look to bypass Ukraine entirely, perhaps using a gas transit hub in Turkey as an alternative. While the current transit deal is only a relatively small percentage of total European gas usage (15bcm out of 295 bcm total usage), it is still relevant and could have larger implications if there is a large-scale disruption in conjunction with a cold winter in Europe.
Tim Tarpley, Energy Workforce President, analyzes federal policy for the Energy Workforce & Technology Council. Click here to subscribe to the Energy Workforce newsletter, which highlights sector-specific issues, best practices, activities and more.
