EXXON: ENERGY DEMAND WILL GROW

Exxon finally noticed: The demand for energy is rising. Everywhere. Their answer: More drilling, more drilling, more drilling. The world is, indeed, going to want all the oil it can get for the next two or three decades. But there are other answers.

ExxonMobil Releases New Outlook for Energy: A View to 2030
November 5, 2007 (Business Wire via Yahoo Finance)
and
IEA Sees Signs High Oil Prices Starting to Hit Demand
Selina Williams and Adam Smallman, November 13, 2007 (Dow Jones Newswires/FWN Financial News via RigZone)

WHO
Exxon Mobil Corporation (Rex W. Tillerson, Chirman/CEO); International Energy Agency (IEA)

Rising demand in all areas. (click to enlarge)

WHAT
Exxon’s “Outlook for Energy: A View to 2030” concludes that demand for energy, especially oil, will keep growing. Subsequently, an IEA report reported high prices were slowing near term demand.

WHEN
The Exxon report was released November 5. The IEA report came November 6.

WHERE
- The Exxon study analyzed 100 countries, 15 demand sectors and 20 fuel types. It included economic and population projections as wells as anticipated efficiency improvements and technology advances.
- The IEA report is the organization’s standard periodic accounting of world energy markets.

WHY
- Overall world energy demand will be 1/3 higher in 2030.
- Energy demand will grow 1.3% per year, 2005 to 2030.
- Energy demand in the developing world will grow 2% per year, four times the 0.5% per year growth of the developed world.
- Hydrocarbons will be 80% of energy demand; oil and gas: 60% .
- Renewable energies will grow 9% per year, from today’s 0.5% of world energy to 2% by 2030.
- Energy efficiency (aka energy intensity: energy demand divided by GDP) has been improving 1% per year since 1980. It will accelerate to 1.6% per year.
- Emissions will grow 2% in the developing world but will remain almost constant in the developed world through 2030.
- Nevertheless, there will be fluctuations. The current downturn in demand caused the IEA to revise its 2007 world oil demand growth prediction down from 1.5% from 1.2% and its oil demand growth forecast for 2008 from 2.4% to 2.3%.

Supply not quite keeping pace. (click to enlarge)

QUOTES
- Tillerson: "Ready access to reliable, affordable energy is essential to economic prosperity worldwide…Our challenge is to meet energy demand with practical, broad-based solutions that promote economic development and energy security while balancing the need to protect our environment…”
- Tillerson: “The energy challenges faced by the world are undeniable…Economic progress will drive energy demand, oil and gas will remain indispensable for the foreseeable future, and a global effort will be required to tackle greenhouse gas emissions…”
- Tillerson: "…Understanding the outlook for energy and thoughtfully examining our options is essential."
- Lawrence Eagles, IEA report editor: "Price effects are clearly starting to spill through into demand…We're seeing it in the transport sector in the U.S., which is typically very unresponsive to high prices, as well as in other areas…"