Natural gas is poised to become an even more predominant fuel in the 21st century because the global economy is expanding and energy is a key driver in this economic success story. This is especially true across large parts of Asia and China where, in a relatively short time, millions of people joined the ranks of the middle class. This economic expansion is igniting unprecedented consumption of energy as people are improving their households, health, safety, and being empowered to realize their potential. More and more of that energy is slated to come from natural gas, because it is a low-emissions and versatile fuel capable of not only powering homes, but also utilities and transportation in the form of liquefied natural gas or compressed natural gas.
In a world characterized by increasing prosperity, growing energy use, and an expanding push to cut greenhouse gas emissions, natural gas will be one of the most important sources of energy to meet the needs of the future. Through a series of charts we show some of the economic and demographic trends that we expect to drive demand for natural gas over the next quarter century.
Rising living standards means rising consumption
By 2040, world population is expected to reach 9.2 billion people, up from 7.4 billion today. Between 2014 and 2040 global GDP will more than double. Rising incomes means rising consumption as new members of the middle class require more energy to power applications from lighting, to home appliances, global e-commerce and digital services. All of these require energy to produce, transport and operate—energy that more and more will be supplied by natural gas.
The world will consume more energy
The need for safe, clean, reliable and affordable energy is expanding significantly. Even with significant efficiency gains, global energy demand will likely increase nearly 25 percent by 2040, driven largely by developing nations. Renewable and nuclear energy will see strong growth, contributing close to 40 percent of incremental energy supplies to meet that demand growth. Oil and natural gas continue to supply about 55 percent of the world’s energy needs through 2040. Natural gas demand rises the most, largely to help meet increasing needs for electricity and support increasing industrial demand.A new CO2 reality
The growing role for natural gas will help cut CO2 intensity in both industrialized economies and emerging markets. Longer term, the shift toward natural gas and other less-carbon-intensive energy types, combined with significant improvements in energy efficiency, will enable global energy-related CO2 emissions to peak around 2040. This will be a significant result, recognizing that energy-related CO2 emissions rose more than 50 percent from 1990 to 2014.
A local resource
With global natural gas demand likely to rise by 50 percent between 2014 and 2040, supplying the markets will be a challenge. Some of the natural gas will be shipped across oceans as LNG. Some will be transported via large regional pipeline networks. However, most of it will be produced locally, in places like the Marcellus and Barnett Shales in the U.S., helping ensure reliable, affordable energy to support broad-based economic prosperity and thousands of well-paid jobs.
By 2040 about 30 percent of the world’s electricity will be generated by natural gas. Motivating the shift are a number of factors, including: energy security, cost of fuel, and emissions concerns. In the U.S. the switch to natural gas a source of power generation is already well underway. A recent report by the U.S. Energy Information Administration shows that through year-end 2017, natural gas continued to be the leading energy source for generating the nation’s electricity. Providing reliable, affordable energy to support prosperity and enhance living standards is coupled with the need to do so in ways that reduce impacts on the environment, including the risk of climate change. This is a dual challenge ExxonMobil takes seriously.
This article first appeared on the Energy Factor on June 9, 2016, and has been updated to reflect recent developments.
Sources: Charts: “ExxonMobil: The Outlook for Energy: A View to 2040”;
Refrigerator sales, 2002 – 2022: Freedonia Group, Inc.; ExxonMobil estimates