The Outlook for Energy

A View to 2030
This presentation includes forward-looking statements. Actual future conditions (including economic conditions, energy demand, and energy supply) could differ materially
due to changes in technology, the development of new supply sources, political events, demographic changes, and other factors discussed herein (and in Item 1 of
ExxonMobil’s latest report on Form 10-K). This material is not to be reproduced without the permission of Exxon Mobil Corporation.
The Outlook for Energy: A View to 2030
Energy – in all its forms – is critical to economic growth,
development and social welfare. From the world’s most
modern cities to the smallest communities in developing
countries, reliable access to affordable energy is necessary
to drive long-term economic and social progress.
Today the world uses approximately 245 million barrels
per day of oil-equivalent energy (MBDOE) to fuel
transportation, generate electricity, run farms and factories,
heat and cool homes, and more. By 2030, with projected
economic and population growth, the world’s total energy
demand is expected to be approximately 35 percent
higher than it was in 2005, despite significant gains in
energy efficiency.
The majority of this expected increase in demand will take
place in developing countries, where growth is occurring
most rapidly and a transition to higher standards of living
is taking place. The immense scale as well as the pace of
this growth poses many challenges.
To help us prepare for the future energy marketplace,
each year ExxonMobil develops The Outlook for Energy,
a broad, in-depth look at the long-term global trends for
energy demand and supply, and their impact on carbon
dioxide (CO2) emissions.
The Outlook for Energy: A View to 2030
The Outlook for Energy is the result of a rigorous ongoing
assessment process that includes a detailed analysis
of approximately 100 countries, 15 demand sectors
and 20 fuel types. It is underpinned by economic and
population projections as well as our expectations for
energy-efficiency gains from the deployment of advanced
technologies and adoption of better energy-management
practices. Building on many decades of experience,
ExxonMobil conducts this analysis utilizing in-house
expertise and modeling tools as well as input from a
wide variety of third-party organizations, such as the
International Energy Agency and the U.S. Department of
Energy. The results of this comprehensive study provide
a foundation for ExxonMobil’s business planning.
ExxonMobil shares The Outlook for Energy publicly to
help build understanding of the world’s energy needs and
challenges. This year’s report focuses on energy demand
to the year 2030. It examines key drivers of rising demand
and the way this demand will be met by the various
available energy sources, including fossil fuels, nuclear
power and renewable energies, and it provides insight
into the challenge of meeting growing energy needs while
mitigating global CO2 emissions.
3
key findings of this year’s Outlook:
• Driven by growing populations and expanding
economies, global energy demand is expected
to increase by an average of 1.2 percent per year
between 2005 and 2030, even assuming significant
gains in energy efficiency. Global demand is projected
to rise from roughly 230 MBDOE in 2005 to 310
MBDOE in 2030 – an increase of 35 percent. This
forecast is down slightly from the 2007 Outlook, which
projected a 1.3 percent average annual growth rate.
The changes are spread across various demand
sectors and reflect improved energy efficiency.
• Oil, gas and coal will continue to provide the vast
majority of the world’s energy needs – meeting close
to 80 percent of global demand through 2030 – due to
their abundance, affordability and availability. Nuclear
energy will grow as emphasis on low-carbon fuels
increases. Renewable energy sources such as wind,
solar and biofuels will also grow rapidly.
• Power generation will be the largest and fastest-
growing energy-demand sector through 2030. China,
which today meets almost 90 percent of its power
needs with coal, will see its energy demand for power
generation more than double by 2030, surpassing U.S.
demand by more than one-third.
• Transportation, currently responsible for more than half
of total oil demand, is expected to grow substantially.
From 2005 to 2030, demand in developed countries
is expected to be essentially flat, reflecting significant
penetration by more-efficient vehicles. In contrast,
demand in developing countries is likely to more than
double as economies grow and rising prosperity leads
to a dramatic increase in personal vehicles.
• Global CO2 emissions are projected to rise by close
to 30 percent between 2005 and 2030, even with
improved energy efficiency and growth in nuclear
and renewable energies. Although CO2 emissions are
expected to begin declining in the United States and
Europe over the period to 2030, these declines will be
more than offset by increases in developing countries.
For example, by 2030 China is expected to have
CO2 emissions comparable to those in the U.S.
and EU combined.
4
Although the Outlook is intended as a long-term planning
tool, the document is prepared on an annual basis and
incorporates near-term market fluctuations, including the
recent downturn in economic conditions.
This year’s Outlook for Energy has been expanded to
include a new section that describes not only the energy
and environmental challenges facing our world through
2030 but also the strategies that will be required by all
participants in the global energy market to successfully
meet those challenges.
This new section, called “The Energy Imperative,” outlines
the need for an integrated set of solutions that includes
improved energy efficiency, development of all economically
viable energy sources, and cost-effective steps to curb
emissions. It describes the importance of technology in
achieving these goals as well as the political, economic and
regulatory conditions that will be required. It advocates a
steady approach that focuses on the long view rather than
short-term fluctuations in market conditions.
energy outlook – explanation of terms
ExxonMobil’s Outlook for Energy contains global
projections for the period 2005-2030. In the Outlook, we
refer to standard units for the measurement of energy:
MBDOE. Million barrels per day of oil-equivalent. This term
provides a standardized unit of measure for different types of
energy sources (oil, gas, coal, etc.) based on energy content
relative to a typical barrel of oil. One MBDOE is enough energy to
fuel about 3 percent of the vehicles on the world’s roads today.
BCFD. Billion cubic feet per day. This is used to measure
volumes of natural gas. One BCFD of natural gas can heat
approximately 5 million homes in the U.S. for one year. Six
BCFD of natural gas is equivalent to about 1 MBDOE.
Gigawatt (GW). A unit of electric power, a gigawatt is equal
to 1 billion watts, or 1,000 megawatts. A 1-GW power plant
can meet the electricity demand of approximately 500,000
homes in the U.S.
The Outlook for Energy

evolving energy sources global economics and energy

evolving energy sources
percent of total population GDP energy demand
100 billion trillion 2005$ MBDOE
10 Average Growth/Year 100 Average Growth/Year 350 Average Growth/Year
2005 – 2030 2005 – 2030 2005 – 2030 2007 EO
9 0.9% 3.0% 1.2% 1.3%
300
75
8
75
7 250

6
50 200
5 50
150
4
25
3 100
25
2
50
1
0
1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000
0 0 0
Wood Coal Hydro Oil Gas Nuclear Other 1980 2005 2030 1980 2005 2030 1980 2005 2030

The composition of the world’s energy sources has Another important lesson is the linkage among population
evolved over time, influenced by a range of factors that
120 growth, economic progress and the amount and type
10
100000
350

include technology, cost and availability. In 1900, for of energy used around the world. Growing populations
100
300
8
80000

example, oil and natural gas each accounted for about continue to advance economically over time and seek 250

280
percent of the world’s energy, far behind coal, which better living standards, which lead to increased energy
6
60000

200

accounted
60 for more than 50 percent. Seventy years use. Studying these linkages gives us a more accurate
4
40000 150

later, oil overtook coal as the largest energy source, at assessment of future energy demand.
40 100

more than 40 percent, and natural gas grew to nearly 2

20000

20percent. By 2000, while oil continued to be the single

20 In 2005, the global population was roughly 6.4 billion
50

0
0

largest fuel source, natural gas grew at similar levels to people. Birth rates are slowing in most parts of the world,
0

coal in terms of global usage, and newer renewable
energy sources joined the mix.
One lesson from the past century is that major shifts in
fuel types used typically take decades to occur. New
energy sources require substantial levels of investment
and advances in technology before they can begin to
win market share from already-established fuels. This
is important to note as we assess the ability of various
energy sources to meet projected growth in energy
demand through 2030 and beyond.
and the overall average annual growth rate between 2005
and 2030 is expected to be less than 1 percent. Although
this rate may sound insignificant, the result is a global
population increase to 8 billion by 2030 – well over a billion
more energy users than exist today.
Global economic output, as measured by gross domestic
product (GDP) at market exchange rates, is expected to
increase at approximately 3 percent per year to 2030,
led by the rapidly expanding economies of developing
countries. Though the world’s economic growth ebbs
and flows through cycles, viewed over the perspective of
decades, economic growth is surprisingly consistent on a
global scale.

Population and economic growth will drive global energy

demand higher, at an average rate of 1.2 percent per year.
Global energy demand in 2030 will be more than twice the
level of 1980, as shown in the right-hand chart above.

The Outlook for Energy: A View to 2030 5

 energy intensity When overall global economic output is assessed by
energy intensity region, what becomes evident is the impact that developing
BOE/2005$K GDP
3 countries, particularly in the Asia Pacific region, will have in
Average Growth/Year Average Growth/Year
1980 – 2005
-1.0%
2005 – 2030
-1.7%
coming years.

2
Asia Pacific – which led all regions in GDP growth rates
2007 EO from 1980 to 2005 – will continue to grow rapidly through
-1.6%

1
2030, averaging almost 4 percent annual growth. GDP
growth in other developing regions – including Africa, the
Middle East, Latin America and Russia/the Caspian – will
0
1980 2005 2030
also be strong but will grow from a much smaller base.

Today, three regions – North America, Europe and Asia

The global economy has grown since 1980 at a rate of
Pacific – dominate the world’s GDP, each generating annual
3.0
approximately 3 percent per year, and that growth has
economic output in the range of $10 trillion to $15 trillion.
been accompanied by improving energy efficiency. This
2.5
gain in efficiency is illustrated by a significant decline in
2.0 By 2030, Asia Pacific will have the highest GDP of any
“energy intensity” – the amount of energy required to
region in the world, at approximately $30 trillion, followed
1.5
generate $1,000 of economic output. Over time the world
by North America at about $26 trillion and Europe at close
has been improving its energy intensity – or, in other
1.0 to $19 trillion. In addition to rapidly growing economies,
words, using less energy to generate the same economic
0.5 countries such as China and India will continue to
output. Going forward, we anticipate that this improvement
0.0 experience significant population growth.
will continue at a 70 percent faster pace than in the past.

2.0 energy demand versus income – 2030

Despite this increase in efficiency, global energy demand
energy demand v. income – 2030
from all sources – expressed in million barrels per day BOE per capita
50 2030
of oil equivalent (MBDOE) – is expected to increase 2005

from roughly 230 MBDOE in 2005 to approximately 310 40

North
America
1.5
MBDOE by 2030, an increase of 35 percent. This estimate
reflects slower growth than experienced in 1980-2005 and 30

represents a slight decrease from our estimate last year. Europe

20

1.0
GDP by region – 2030 10
Asia
GDP by region – 2030 Pacific

trillion 2005$ 0
30 0 10 20 30 40 50 60
2030 Average Growth/Year
2005 – 2030 GDP per capita
2005
3.0% (thousand 2005$)
25

20 North America, Europe and Asia Pacific provide a

50 illustration of the link between GDP growth and
useful
15
energy demand.
10 40

5 Reflecting
30 levels of economic productivity and prosperity,
0
the higher a region’s per-capita income (based on GDP),
North
America
Latin
America
Europe Russia/
Caspian
Asia
Pacific
Africa Middle
East
20more energy it tends to use on a per-capita basis.
the
10

30000 0
0 10 20 30 40 50 60
6
25000
In 2005, North American GDP per capita was about However, we project that this growth will occur unevenly
$33,000, and energy use per capita was about 50 BOE. around the world, with demand rising much more rapidly
Europe, with a lower GDP per capita of $19,000, also had in developing economies.
a lower BOE per capita of 25. Asia Pacific was much lower
on both counts, with a GDP per capita of $3,200 and a Energy demand for transportation in 2005 was met almost
BOE per capita of 8. exclusively by oil, at approximately 98 percent. Biofuels
and natural gas made relatively smaller contributions. Oil
However, at higher income levels, greater efficiency gains remains the only fuel with the scale, infrastructure and
are projected because advanced economies are in a better energy density needed to meet the majority of the world’s
position to utilize more energy-efficient technologies and transportation demand.
standards. For example, whereas North American GDP
per capita is expected to grow at 1.8 percent per year When we look forward to 2030, we expect that oil will
between 2005 and 2030, we expect its BOE per capita remain dominant, meeting 94 percent of demand. The
to fall by 0.7 percent per year. balance will be provided by biofuels (5 percent) and natural
gas (1 percent).
Efficiency is one of the key factors that will help mitigate
the overall growth in energy demand in all primary global transportation – light-duty vehicles
sectors – transportation, power generation, industrial and
global transportation 2030 – LDV fuel demand
residential/commercial – through 2030 and beyond. by sector by region
MBDOE MBDOE
70 Average Growth/Year

global transportation 60
2005 – 2030
1.4% Rail 0.7%
6.1
global transportation – 2030 global transportation – 2030 Marine 2.5% 17.2%
by sector by fuel United
50 States
MBDOE MBDOE Aviation 1.9% 7.1
Rest of
9.2
Res/ 60 Average Growth/Year 40 World
Comm 2005 – 2030 27.8%
1.4%
Heavy-Duty 2.0%
Industrial 50 30 Vehicles
40.4 2.0
1.9 5.6%
84.5 2005
20
40 European
China Union
Light-Duty 0.3%
10 Vehicles
30
124.0
0
61.5 1980 2005 2030 20.2 MBDOE
20
Power
Transportation
rtation Generation

10

Not surprisingly, the light-duty-vehicle subgroup – which

80000
0
2030: ~310 MBDOE Oil
70000
includes personal cars, light trucks and sport utility
Gas Coal Nuclear Biomass, Wind,
Hydro Solar &
& Geo Biofuels
60000
vehicles – is the largest user of energy in transportation
50000
today, though its rate of growth is projected to slow
In 2005, transportation – which
60000
includes commercial and 40000
dramatically. In fact, through 2030, growth will be strong
personal road vehicles as well
50000as ships, trains and planes –
30000
in all transportation sectors except for light-duty vehicles,
accounted for 19 percent of40000
global energy usage, at nearly 20000 in large part due to measures to increase fuel economy
44 MBDOE. Transportation is expected to be one of the 10000
in personal automobiles. From 1980 to 2005, light-duty-
30000
fastest-growing sectors, and demand is projected to rise 0 vehicle energy use grew by 70 percent. From 2005 to
20000
to nearly 62 MBDOE by 2030, an increase of 40 percent 2030, however, we expect growth to be less than 10
from 2005. 10000 percent, reflecting significant efficiency gains.
0

The Outlook for Energy: A View to 2030 7

 The United States will account for about one-third of global light-duty-vehicle penetration linked to GDP
light-duty-vehicle energy demand in 2030, using about light-duty-vehicle penetration linked to GDP
vehicles per 1000 people
7 MBDOE, which is a decline of greater than 20 percent 1000 China
1990 – 2030

from the 9 MBDOE used in 2005. The European Union France

Germany

and China will each account for about 2 MBDOE, and the 100
UK
United States

rest of the world will make up the balance.

10

U.S. new light-duty-vehicle MPG

U.S. new light-duty-vehicle MPG
1
MPG
40

CAFE* EISA**
0
100 1000 10000 100000
30 GDP per capita
On-road EISA** (2005$)

20
One critical factor in determining the demand for fuel from
light-duty
United vehicles
States is the number of cars expected to be in
10 1000 1000
use around the world.
0 800 800
1980 1990 2000 2010 2020 2030
*CAFE – Corporate Average Fuel Economy Future vehicle-fleet-size projections are based on the
**EISA – Energy Independence and Security Act 600 established relationship between income and vehicle 600

400 ownership – as incomes rise, so does personal vehicle 400

In the United States, the average fuel economy of light- ownership. Thus the United States and European countries
duty
40 vehicles has remained roughly constant since 1980, 200 such as France, Germany and the United Kingdom, with 200
at approximately 20 miles per gallon (MPG). Although it high GDP per capita, also have high vehicle-ownership
35 0 0
is true that there have been many advances in efficiency 0 rates.20000
The United 40000 60000
States, in 80000
fact, leads 100000
the world in vehicle
during
30 that time, those advances have been offset by an ownership, with about 785 vehicles for every 1,000 people.
increase in the average weight and engine power of U.S. Conversely, China, with relatively low GDP per capita, has
25
light-duty vehicles. 1000 very low UKvehicle ownership. However, developing countries
1000
20 like China also have tremendous growth potential; as
The recently passed Energy Independence and Security 800
their economies increase in size and scale, the number of 800
15
Act (EISA) established a new mandate of 35 MPG for new
600 personal vehicles is certain to increase.
vehicles by 2020. This target reflects fuel economy under 600
laboratory conditions and translates to an on-road MPG of 400 In terms of vehicle ownership, many developed countries
400
approximately 28 MPG. such as the United States are approaching saturation – the
200
point where per-capita penetration of vehicles levels off. 200
Attaining the EISA standards poses a significant challenge 0 However, these countries will still see an increase in the
0 20000 40000 60000 80000 100000 0
for automakers. However, we expect that the new fuel- number of personal vehicles, reflecting population growth. 0
economy standards will be achieved on schedule and
that additional improvements will occur post-2020. These
improvements will reflect enhancements to conventional France

vehicles as well as greater penetration by hybrids and 1000

other advanced vehicles.
800

600

400

200
8
0
0 20000 40000 60000 80000 100000
 light-duty vehicles – fleet size light-duty-vehicle fuel demand
total fleet size new-vehicle MPG United States European Union China
millions of vehicles miles/gallon MBDOE MBDOE MBDOE
300 50 10 10 10
EU Biofuels
U.S. China
250 EU
40 8 8 8
U.S.
200
30 6 6 6

150

20 4 4 4
China
100

10 2 2 2
50

0 0 0 0 0
1990 2010 2030 1990 2010 2030 1990 2010 2030 1990 2010 2030 1990 2010 2030

The United States currently has the largest fleet of light- Our analysis of vehicle penetration and projected fuel
300000 50
duty vehicles in the world, at approximately 240 million. economy is used to derive fuel-demand projections.
10000 4000 2000

The U.S. is expected to retain the largest

250000
40 fleet at 275 3500

8000

million
200000
vehicles in 2030, although annual growth rates will In the United States, fuel demand from light-duty vehicles
3000 1500

30
average less than 1 percent. is likely to peak during the next five years, with the
6000
2500

150000

20
ongoing penetration of more-efficient vehicles reducing
2000 1000

4000

The European Union fleet has been growing, but as its

100000
demand from 9 MBDOE in 2005 to 7 MBDOE by
1500

population peaks and begins to decline

10
over the period, 2030. This demand will continue to be met primarily by
1000 500

50000 2000

we expect its vehicle fleet to plateau at close to 260 million gasoline, although biofuels will play a larger role aided by
500

0 0

in 2030, up from about 220 million in 2005. government mandates and subsidies, increasing from
0 0 0

2 percent in 2005 to about 14 percent in 2030.

By contrast, China’s light-duty fleet will increase to almost
110 million vehicles by 2030, up from approximately 12
million in 2005. It is interesting to note that as recently as
1990, China had only about 1 million cars.
How do new vehicles in these different regions compare in
terms of fuel economy? Not surprisingly, given its relatively
higher fuel prices, the European Union leads the way in
new-vehicle fuel economy today, and performance is
expected to approach 50 MPG by 2030. China is slightly
below the EU today, with predominantly lower-cost, small,
efficient cars. China is expected to improve at a rate similar
to that of the EU and the U.S. As noted earlier, the U.S. will
shift dramatically from its historical trend to meet the 2020
EISA mandate, and we project further efficiency gains
through 2030.
In the European Union, fuel demand from light-duty
vehicles is already close to its peak today at approximately
3.5 MBDOE. Fuel demand is likely to begin to decline
in the near term as more-efficient vehicles continue to
enter the market, falling to 2 MBDOE by 2030. Over time,
biofuels will also increase their share of demand, from
close to 1 percent to approximately 15 percent by 2030.
In notable contrast to the United States and European
Union, China’s light-duty-vehicle fuel demand is expected
to rise significantly, from 0.5 MBDOE in 2005 to more than
1.8 MBDOE in 2030. We expect that biofuels will not have
a significant impact in China through 2030.

The Outlook for Energy: A View to 2030 9

 global commercial transportation Total U.S. transportation fuel demand is likely to plateau
global commercial transportation commercial transportation v. GDP around 2015 at approximately 14.5 MBDOE and then
by sector
MBDOE MBDOE decline 10 percent by 2030. The downturn in U.S. light-
70 50
duty-vehicle fuel demand – driven by increased efficiency

}
Average Growth/Year
2005 – 2030 Rail
1.4% 0.7%
60
Marine 40
2030
and slow growth in the total number of vehicles – will more
2.5%
50 Aviation than offset the increase in fuel demand in the commercial
Commercial

1.9%

40
30 sector resulting from GDP growth. By 2030, transportation
2005
30
Heavy-Duty
Vehicles
fuel demand in the U.S. is likely to be approximately 13
2.0% 20

1980
MBDOE, lower than today’s consumption level.
20
Light-Duty 10
10 Vehicles
0.3%
The demand outlook for the European Union is relatively flat
0 0
1980 2005 2030 0 25 50 75 100 overall, and a drop in light-duty-vehicle fuel demand will likely
GDP (trillion 2005$)
offset commercial-sector growth. Total transportation fuel
usage in 2030 is expected to be approximately 9 MBDOE,
Commercial transportation includes heavy-duty vehicles
80000 up just slightly from demand in 2005.
such as trucks and buses as well as 50000
aviation, marine and
70000
rail. Heavy-duty vehicles represent about 60 percent of
60000 commercial demand. Aviation and 40000
It is clear, however, that China is on a different path.
marine represent most
Total transportation fuel demand is likely to more than
50000
50000 of the balance.

30000
triple by 2030, growing at nearly 5 percent per year. We
40000
expect strong growth in all areas of transportation within
40000

30000 Our outlook for energy demand from commercial

China – which in total will reach close to 8 MBDOE by
transportation reflects the fact that this
20000
demand tends to
20000
2030, approaching the level of the European Union.
30000

grow with GDP. We expect continued economic growth

10000
through 2030 – and with that, a significant
10000
increase in80 the 100
global power generation – 2030
20 40 60
0 20000

transportation of goods throughout the world’s economies. global power generation – 2030 global power generation – 2030
by sector by fuel
MBDOE MBDOE
10000

In total, commercial transportation demand is likely to grow 20 40 60 80

Res/
Comm
100
50 Average Growth/Year
2005 – 2030
1.6%
by more than 16 MBDOE by 2030, reaching 41 MBDOE, Industrial
40.4 40
and representing more than 90 percent of the growth in 84.5

total transportation demand. This growth will occur in spite 30

of significant efficiency gains over the period to 2030. 124.0

61.5 20
2005
Transportation
transportation – regional demand by sector Power
Generation 10

United States European Union China

MBDOE MBDOE MBDOE 0
15 Average Growth/Year 15 Average Growth/Year 15 Average Growth/Year 2030: ~310 MBDOE Oil Gas Coal Nuclear Biomass, Wind,
2005 – 2030 2005 – 2030 2005 – 2030 Hydro Solar &
-0.3% 0.1% 4.9% & Geo Biofuels
Rail
Marine
Aviation
10 10 10 Electricity is something many take for granted today. Yet
Heavy-Duty 50
approximately 1.5 billion people still do not have access
to reliable electricity supplies. All
40
countries, regardless of
5
Light-Duty
5 5
region, show increasing access to and use of electricity
with economic growth. Today, 30 per-capita electricity use in
0 0 0
developing countries is just a fraction of the levels found
20
1980 2005 2030 1980 2005 2030 1980 2005 2030
in developed economies. Looking forward to 2030, we
expect to see billions of people10in developing economies
8000
significantly increase their electricity use.
10000
15000
0
7000

10 12000
8000
6000

5000
6000
9000
Consistent with this projection, power generation is the 2005 regional coal supplies
largest and fastest-growing segment of global energy
2005 regional coal reserves world reserves
demand, increasing to 40 percent of total demand by region percent of total
billion tonnes
by 2030. Russia/ Africa
Caspian
Asia Pacific
6.1%
17.2%
Although efficiency gains will moderate growth somewhat North America

relative to GDP, electricity demand is projected to increase Russia/Caspian

Asia
North
40.6%
by more than 75 percent by 2030 relative to 2005. Africa America
27.8% Pacific

Europe 5.6%
Middle
Unlike transportation, power generation fuel demand is Latin America
East
0.2%
Europe
Latin
met by a diverse portfolio of energy sources. Although Middle East
America
2.5%

coal is dominant in this sector, accounting for 45 percent, ~935 billion tonnes
0 50 100 150 200 250 300 350 400 2005 world coal demand ~5 billion tonnes
natural gas and nuclear are also significant.

The prominence of coal in generating electrical power

We expect total fuel demand for power generation to
increase by approximately 50 percent by 2030, reaching
124 MBDOE. Coal will retain the largest share – driven
by growth in the Asia Pacific region, particularly China.
However, all other fuels – with the exception of oil – are
likely to grow faster. For example, natural gas use is
expected to reach close to 35 MBDOE by 2030.
As described in detail later, nuclear power is expected
to grow significantly in coming years. Nuclear power will
remain the third-most-common fuel source for power
generation globally and is expected to grow in all
major regions.
Wind power will experience very strong growth through the
year 2030, with an average annual growth rate from 2005
to 2030 of close to 12 percent. The total contribution of
wind toward power generation will be approximately 2.7
MBDOE in 2030, or about 2 percent of the total used for
power generation.
is based on both its abundance and low cost. Global
reserves of coal were approximately 935 billion tonnes
in 2005. It is clear that these reserves can meet global
needs over a long period – close to 200 years at today’s
consumption rate.
From a regional perspective, Asia Pacific has the largest
coal reserves, followed by North America. Given the
abundance of coal in Asia Pacific – about 40 percent
0 50 100 150 200 250 300 350 400
of the global total – it’s not surprising that the region is
relying on coal to help fuel its economic progress. In fact,
China, India and Australia each have more than 100 billion
tonnes of coal reserves. So not only does China have a
large domestic source; it also has the world’s largest coal
exporter, Australia, as a neighbor.
China – power generation
China – power generation
MBDOE
30
Average Growth/Year
2005 – 2030 Renewables
3.1% 5.0%
25 Nuclear
10.9%

Today the United States has the world’s highest power 20

Gas
6.7%
Oil
generation fuel demand, followed closely by China. But by
15
2030, China’s economic and population growth will drive
power generation demand up by more than 100 percent, 10 Coal
2.3%

to almost 28 MBDOE, 40 percent higher than the U.S.’s 5

2005
projected usage of approximately 20 MBDOE. Like that in 0
the U.S., demand in the European Union will grow slowly, 1980 1990 2000 2010 2020 2030

up about 10 percent to 16 MBDOE.

Because of coal’s abundant supply and low cost, it
dominates the power generation fuel mix in China,
30000
accounting for 90 percent.
The Outlook for Energy: A View to 2030 25000
11
20000
By 2030, we expect overall power generation demand Coal meets about half of the power generation demand
in China to more than double, despite efficiency gains. in the U.S. This large share for coal has been the case for
Although coal loses share in China over the outlook period, decades and reflects coal’s low cost.
it will still grow rapidly at 2.3 percent per year, reaching
more than 20 MBDOE. By 2030, coal will still dominate However, the Outlook anticipates that cost of carbon
Chinese power generation and account for almost 75 policies will be adopted in the U.S. and other developed
percent. Considering the vast coal resources that give countries in order to curb greenhouse-gas emissions.
China security of supply – and assuming no significant Depending on the exact nature of such policies, the cost
direct cost of carbon or tax on greenhouse-gas emissions – to produce electricity using coal and natural gas is likely to
it is likely that China will continue to favor coal as a fuel rise dramatically – and as a result will substantially affect
source for power generation for the foreseeable future. the relative economics of the different fuels. Coal is the
most carbon-intensive fuel, followed by oil and then
Natural gas use also will grow rapidly and reach 4 percent natural gas.
of the market at 1.1 MBDOE, helping meet peak-demand
requirements while also reducing environmental impacts The chart to the left shows the impact of cost of carbon
in urban areas. Nuclear is expected to have continued policies. The red boxes reflect the cost to produce
strong growth, reaching a 13 percent share by 2030, up electricity without a cost of carbon, and the blue boxes
from 2 percent in 2005. Hydroelectric power is the most demonstrate the result of a $60 cost per metric ton of CO2.
prominent renewable energy source for Chinese power A $60 cost per metric ton of CO2 would nearly double the
generation, and it will continue to increase significantly. cost of electricity produced from coal and increase the
Wind power will grow rapidly. cost of electricity produced by natural-gas plants relative
to nuclear and wind.
Overall, China will account for more than one-third of the
worldwide increase in power generation demand from power generation by region
2005 to 2030. This rapid expansion contrasts dramatically
United States European Union China
with that of the U.S., where demand is expected to grow MBDOE MBDOE MBDOE
30 30 30
slowly. Although total U.S. power generation demand in Average Growth/Year
2005 – 2030
Average Growth/Year
2005 – 2030
Average Growth/Year
2005 – 2030
0.3% 0.4% 3.1%
2030 will be higher (20.2 MBDOE vs. 18.6 MBDOE in
Wind
2005), it will have declined to approximately 16 percent of 20
& Solar
Biomass, 20 20
Hydro & Geo
global power generation, down from 23 percent in 2005.
Nuclear

U.S. power generation cost 10

50%
30% Coal 10 10

U.S. power generation cost

U.S. baseload, startup 2025 Gas
2005 cents/kWhr
Oil
15 0 0 0
$60/metric ton CO2
1980 2005 2030 1980 2005 2030 1980 2005 2030

Power generation outlooks for the United States and

10
Europe through 2030 are similar – they both grow, but
25000 20000
30000

very slowly, affected by efficiency gains and environmental 25000

considerations. In contrast, China grows rapidly, at 10

20000

5
15000

times the rate of growth in the United States. China’s

20000

15000

demand for power generation alone will account for nearly

10000
15000

0 10 percent of the world’s total energy needs by 2030.

10000

10000

Coal Gas Nuclear Wind

5000

5000
5000

0
0 0

12
In the United States, coal will lose a significant share
of power generation, dropping from slightly above 50
percent to approximately 30 percent by 2030, while gas
and nuclear will gain share. In fact, in 2030 coal, gas and
nuclear each will provide approximately 30 percent of
the energy for power generation. Wind will also become
more significant. Cost of carbon regulations, coupled with
mandates and subsidies, are expected to underpin this
shift in the mix of fuels used for power generation.
In the European Union, coal’s share is likely to continue
dropping, reaching about 15 percent by 2030. This
reduction in coal will be offset primarily by increases
in natural gas and nuclear. Renewable energy sources –
primarily hydro, wind and biomass – will provide an
increasingly significant contribution. This trend contrasts
with China, where coal, with no direct cost of carbon,
continues to dominate the energy mix, although renewable
fuels grow rapidly.
nuclear by region
United States European Union
GW GW
200 Average Growth/Year
2005 – 2030
200 Average Growth/Year
2005 – 2030
1.4% 0.8%
31
time frame. As we near 2030, capacity is projected to
increase at a rate of approximately 4 gigawatts (or about
four plants) a year. By 2030, the United States is expected
to have increased its capacity to just under 140 gigawatts,
an increase of 40 percent over 2005.
In the European Union, where nuclear already holds a
large share, we expect slower growth relative to that in the
United States, and capacity is expected to increase from
approximately 135 gigawatts to about 165 gigawatts.
China’s growth is likely to average 10 percent per year until
2030, due to the government’s active pursuit of nuclear
expansion. By 2030, China will have close to the current
nuclear capacity of the United States, with 85 gigawatts.
In meeting electricity demand, the share of nuclear power
in the United States is likely to grow from 19 percent in
2005 to 22 percent by 2030. Across the European Union,
nuclear will maintain close to a 30 percent share. And in
China, nuclear’s share will reach almost 10 percent, up
from just 2 percent in 2005.
China
GW
200 Average Growth/Year
2005 – 2030 wind by region
10.4%

150 22
150 150 United States European Union China
30 GW GW GW
% of electricity
250 Average Growth/Year 250 Average Growth/Year 250 Average Growth/Year
19 2005 – 2030 2005 – 2030 2005 – 2030
100 100 100 12.0% 7.1% 14 15.9%
10
200 200 200

9
50 50 50
150 % of electricity
150 150

2
0 0 0 100 100 100
2000 2015 2030 2000 2015 2030 2000 2015 2030

2
50 50 2 50

0
The United States, the European Union and China all show 0 0 0
0

2000 2015 2030 2000 2015 2030 2000 2015 2030

significant growth in nuclear capacity in the coming years.
200
200
200

If a cost of carbon is assumed in developed economies,

nuclear will represent a viable option to meet growing Cost of carbon policies are expected to drive further wind
150 150
150

power needs. Nuclear costs and safety performance have power expansion in developed economies. We project
200 250 60

also improved with time. wind power to grow rapidly in the United States, at 12
100 100
100
50
200

percent per year, from 2005 to 2030. This outlook is

150

40
50 50

In the United States, there are currently 104 reactors with aggressive and includes annual additions of 6 gigawatts
50
150

a capacity of approximately 100 gigawatts, although no per year, reflecting the highest amount of annual growth
100 30

0 0 100
0

new plants have been added in the last 10 years. We achieved to date. Total capacity is likely to reach 155 20

50

expect new plants to come online beginning in the 2015 gigawatts by 2030. 50
10

0 0 0

The Outlook for Energy: A View to 2030 13

In the European Union, wind capacity will grow at about 7 This demand is currently met by a wide range of fuel
percent per year to reach a total capacity of approximately types. Oil is the largest contributor, followed by natural
215 gigawatts by 2030, or triple today’s level. Europe gas and coal.
continues to be a global leader in wind energy, resulting
from strong rates of growth in Germany, Spain, the UK, Industrial-sector demand is expected to grow at a rate of 1
Italy and France. percent per year through the year 2030 as efficiency gains
help dampen overall growth. Total demand will reach close
In China, which has a smaller base than in either the to 85 MBDOE, or about 30 percent more than in 2005. Of
United States or Europe, wind power will grow most the major energy types, natural gas will grow the fastest,
rapidly, at 16 percent per year on average, reaching more increasing its share of industrial demand to more than
than 50 gigawatts by 2030. 30 percent.

With these rates of growth, wind will play a larger role in global residential/commercial
providing electric power in the future. In the United States, global residential/commercial – 2030 global residential/commercial – 2030
by sector by fuel
wind power will meet about 9 percent of the total electricity MBDOE
Res/
MBDOE
20
Comm Average Growth/Year
demand by 2030, up from less than 1 percent in 2005. 2005 – 2030
0.4%
Industrial 40.4
Wind’s contribution will grow even more significantly in ~40.4
~40.4 15
84.5
some parts of the United States, requiring the expansion
2005
of transmission infrastructure and possible use of backup 10

generation capacity to cover intermittency. In the EU, wind 61.5

124.0

will contribute close to 14 percent of total power demand, Transportation

Power
Generation
5

up from about 2 percent in 2005. China is expected to use

0
wind power to generate slightly more than 2 percent of its 2030: ~310 MBDOE Oil Gas Coal Nuclear Biomass, Wind,
Hydro Solar &
electricity needs in 2030. & Geo Biofuels

Residential/commercial is the smallest energy-demand

global industrial sector, representing about 16 percent of total primary
20
global industrial – 2030 global industrial – 2030
by sector by fuel energy demand (37 MBDOE in 2005). It includes energy
MBDOE MBDOE
Res/ 40 Average Growth/Year for heating and cooking in homes,
15 offices, retail facilities
Comm 2005 – 2030
Industrial 1.0%
and hospitals.
40.4
84.5 30 10

As in the industrial sector, residential/commercial demand

20 2005 5
124.0
is met by a range of fuel types. Natural gas and oil
61.5
Power
10
dominate use in developed countries such as the United
Transportation Generation 0
States, while some developing countries still rely to a great
0 extent on traditional biomass – such as wood and dung –
2030: ~310 MBDOE Oil Gas Coal Nuclear Biomass, Wind,
Hydro Solar &
& Geo Biofuels
for a significant amount of their fuel requirements.

Increased industrial demand is reflective of gains in Overall demand in this sector, which is tied to population
economic prosperity. About 3040000percent of worldwide growth, will increase by only about 10 percent by 2030.
energy demand comes from 35000the industrial sector, which Natural gas will meet the majority of this growth. Total
includes heavy industry, chemicals and refinery use. In
30000 residential/commercial usage in 2030 will be 40 MBDOE,
2005, total industrial demand25000
was 66 MBDOE. falling to about 13 percent of global energy needs.
20000

15000

10000

5000

0
14
 growing global energy demand – 2030 growing global energy demand
global energy demand – 2030
by sector by fuel
growing globaltype – 2030
energy demand
MBDOE
2030
150 2030 MBDOE
Average Growth/Year
2005 2005 – 2030 200 Average Growth/Year
1.6% 1.2% 2005 – 2030
1.2%
120
150

1.0%
90
0.9%
100
1.4%
2005 1.8%
60 0.6%

0.4%
50
0.3% 2.3%
30
2.2%
9.3%
0
Oil Coal Gas Biomass/ Nuclear Hydro/ Wind, Efficiency
0 Other Geo Solar & Gain
Transportation Power Generation Industrial Residential/ Biofuels
Commercial

Power generation continues to be the fastest-growing When viewed as a global total, it is clear that the world’s
150000
energy-demand sector through 2030, and global demand energy mix is highly diverse.
is expected to increase by 50 percent to 124 MBDOE in 200000
120000 Oil and natural gas combined provided almost 60 percent
2030. Approximately 80 percent of that growth will be in
rapidly developing countries such as China. of total global energy in 2005. When coal is added, fossil
90000 150000
fuels provide approximately 80 percent of world energy.
60000
Transportation demand will grow by 40 percent to close to
100000
62 MBDOE in 2030, even with significant vehicle-efficiency By 2030, oil will remain the largest source of energy
30000 supply at approximately 34 percent. Natural gas will grow
gains around the world. As with power generation, nearly
50000the fastest of the fossil fuels and will surpass coal as the
all0of the incremental demand will come from developing
nations. The industrial and residential/commercial sectors second-largest energy source, accounting for nearly 25
will grow at a relatively slower pace. Industrial demand
0percent. Coal will grow slowly, at 0.6 percent per year, and
will increase by 28 percent to almost 85 MBDOE, and will see its share of the energy mix shrink by 2030.
residential/commercial demand will rise 10 percent to
40 MBDOE. Nuclear power will grow significantly, surpassing coal in
terms of absolute growth. By 2030, nuclear will be the
In total, global energy-demand growth is expected to fourth-largest fuel source, behind oil, natural gas and coal.
average 1.2 percent per year in 2005-2030, growing
from roughly 230 MBDOE to 310 MBDOE. This forecast Wind, solar and biofuels will grow at 9.3 percent per year
is down slightly from the 2007 Outlook, due to higher on average, the highest growth rate of all fuels. Hydro
energy efficiency. and geothermal will also grow, but they are limited by the
availability of natural sites.

As stated earlier, in developing this Outlook we assume

significant efficiency improvements over time. Our forecast is
that energy-intensity gains to 2030 will average 70 percent
faster improvement per year compared to historical trends.
Compared to 2005 levels, these intensity gains translate to
energy savings of approximately 170 MBDOE by 2030 –
about double the corresponding growth in demand.

The Outlook for Energy: A View to 2030 15

 global liquids supply and demand These projected contributions to global supply are similar
global liquids supply and demand to those in last year’s Outlook. As a result, the lower
MBDOE
120 Average Growth/Year
demand forecast included in the 2008 Outlook reduces
2007 EO
2005 – 2030
1.0% Liquids Demand what is typically referred to as the “call on OPEC,” or
90 ~38 the amount of crude oil production needed from OPEC
~34
~31 countries to balance overall supply and demand. In the
Biofuels

60 OPEC Crude ~28 NGL, OPEC 2007 Outlook, we estimated that OPEC would need to
Condensate, Other
Non-OPEC
Oil Sands
produce 45 to 50 MBDOE in 2030; we are now projecting
30 Non-OPEC
the “call” at closer to 38 MBDOE. Overall, the resource
Crude &
Condensate base for liquids is sufficient to meet projected demand
0
1980 1990 2000 2010 2020 2030
through 2030 and beyond. Considering just conventional
crude and condensate, only one-third of the total
recoverable resource has been produced to date.
Liquids are the most prominent fuel source in the global
portfolio of energy supplies because of their unmatched
80000 biofuels by region
energy density and global supply infrastructure. Liquids
70000 biofuels by region
fuel the vast majority of our transportation needs and are
60000
MBDOE
3
the largest component in meeting industrial demand.
50000
40000 Biodiesel

In 2005, the global demand for liquids – oil, condensates,

30000 2
Other
Ethanol
natural gas liquids and other liquids – was 84 MBDOE. That
20000
figure has grown to about 86 in 2008, and it is expected to
10000 Brazil
Ethanol
1
increase
0 to approximately 108 MBDOE by 2030.
United States
Ethanol
120000
That projection is about 8 MBDOE lower than that 0
2000 2010 2020 2030
reported in last year’s Outlook, a change that is primarily
100000
due to enhanced efficiency gains in the transportation and
80000 As noted, we expect total biofuels production to reach
industrial sectors, in which oil usage is most prominent. As
60000
seen earlier for the United States, transportation-efficiency almost 3
3000 MBDOE by 2030.
120000
improvement will cause liquid demand to fall in some
40000 2500
developed economies. Still, global demand for liquid The sources of this volume will be dominated by the United
20000 2000
fuels is projected to be 30 percent higher in 2030 than States and Brazil. U.S. production of ethanol from corn
it was0 in 2005. will be approximately
1500 100000 30 percent of the worldwide biofuels
supply by 2030. Brazil’s production of ethanol from sugar
1000
This Outlook’s liquid-demand projection has important cane will add another 30 percent. The remaining 40
120000 500
implications when compared to sources of supply. Through percent of biofuel supplies in 2030 will be divided between
2030, non-OPEC crude and condensate production is 0 produced
ethanol 80000 outside Brazil and the United States plus
expected to remain relatively stable. Mature areas like global production of biodiesel.
those in the United States and the North Sea will see
100000
further declines in production, but these will be largely Despite rapid growth of nearly 8 percent per year,
offset by gains in Brazil, Kazakhstan and other non-OPEC supported by subsidies and mandates, biofuels are likely
growth areas. Canadian oil sands production should reach to represent less than 3 percent of the world’s liquids
about 4 MBDOE by 2030. And natural gas liquids, OPEC supply by 2030.
80000
condensate and other liquids will grow by 8.5 MBDOE.
Biofuels will also grow significantly, reaching 2.8 MBDOE
by 2030.

16
U.S. biofuels outlook gas supply/demand balance
U.S. biofuels outlook
billion gallons North America Europe Asia Pacific
40 BCFD BCFD BCFD
120 Average Growth/Year 120 Average Growth/Year 120 Average Growth/Year
EISA – 36 BG in 2022 2005 – 2030 2005 – 2030 2005 – 2030
1.0% 0.9% 3.7%
100 100 100
30
LNG
80 80 80

20 Biodiesel
60 Unconventional 60 60
Cellulosic

Local Production
Ethanol
40 40 Pipeline 40
10
Corn Ethanol
20 Conventional 20 20

0
2000 2010 2020 2030 0 0 0
2000 2015 2030 2000 2015 2030 2000 2015 2030

In 2008, the United States is expected to produce 9 billion Natural gas is expected to be the fastest-growing major
gallons of corn-based ethanol, using approximately 20 120
fuel source, growing more than 50 percent by 2030, when 80

20
120

percent of the country’s total corn crop. Going forward, 100

it will have overtaken coal as the second-biggest global 70

100

we expect that corn ethanol will meet the Energy fuel source. Much of the demand for natural gas will 60

15 80

Independence and Security Act (EISA) mandate of 15 come from the power generation sector, attracted by the
80
50

billion gallons by 2015. Beyond 2015, however, we do not fact that gas not only is an efficient fuel source but also
60
40 60

10
anticipate significant growth in U.S. corn ethanol volumes. 40
produces fewer emissions than oil or coal. 30

40

20

5 20
20

Besides corn ethanol, there is significant interest in The steady rise in natural gas demand in North America,
10

cellulosic biofuel – for example, cellulosic ethanol – which Europe and Asia Pacific will require increases in imports to
0 0

0
is created from cellulosic biomass feedstocks such as
grass, wood and the nonedible parts of plants. Cellulosic
biofuel has the potential to expand our energy sources to
include many materials now considered waste. Although
EISA mandates supplies of 16 billion gallons of cellulosic
biofuels by 2022, this volume will not be achieved without
significant breakthroughs, given that this technology is not
commercially viable today. Hence, although research in this
area is very active, we project that cellulosic biofuel volumes
(mainly cellulosic ethanol) will total only 3 billion gallons a
year by 2030, primarily from demonstration facilities.
In total, U.S. biofuels production is likely to approach 20
billion gallons a year by 2030, which is double the current
level but well below the EISA target of 36 billion gallons
by 2022.
those regions.
North American natural gas production will remain steady
due to increases in nonconventional sources such as tight
gas and shale gas, but demand growth of 1 percent per
year will mean that imports must increase an average of
about 10 percent annually through 2030 to keep pace. This
increase will be met by liquefied natural gas (LNG) – natural
gas that has been supercooled for transport via ship.
With domestic production falling, Europe will meet its
demand growth with a combination of imports via pipelines
(largely from Russia and the Caspian region) and LNG.
Asia Pacific demand will grow 150 percent by 2030 and
will also be met by pipeline and LNG imports.

The Outlook for Energy: A View to 2030 17

LNG trade global energy demand and CO2 emissions
LNG trade – 2005 energy demand CO2 emissions
~20 BCFD MBDOE billion metric tons
~5% of gas supply 350 40 IEA – Ref. Case
Average Growth/Year Wind, Solar Average Growth/Year
2005 – 2030 & Bio 2005 – 2030
300 1.2% 1.0%
Biomass, Hydro
& Geo
Nuclear 30
250

200 Coal

20
150 Gas

100
10

50 Oil

0 0
1980 2005 2030 1980 2005 2030

note: reflects flows greater than 1 BCFD

Our Outlook for Energy makes a number of assumptions to

LNG trade – 2030 provide a picture of the world’s energy situation in 2030. Key 35000
~60 BCFD 350000
~15% of gas supply assumptions include the likely growth of the following:
30000
300000

250000 25000

• global population
200000 20000

•
150000
economic output
15000

•
100000 energy demand 10000

50000
• energy supplies 5000

Despite broad efficiency increases projected for vehicles,

0

manufacturing, homes, etc., the resulting outlook for

note: reflects flows greater than 1 BCFD
This need for natural gas imports will have a dramatic
impact on the worldwide LNG market. In 2005, global LNG
supplies totaled about 20 BCFD, or 5 percent of global
gas demand. LNG trade was primarily intra-Asia, linking
supply in that region with markets such as Japan and
South Korea.
CO2 emissions from energy use shows an increase of
28 percent by 2030. This is slower than overall growth
in energy demand (35 percent), reflecting increasing
shares of nuclear and renewables as well as relatively
more natural gas and less coal in the energy mix. Due to
more aggressive efficiency assumptions, our forecast of
CO2 emissions is below that of the International Energy
Agency’s 2008 Reference Case.

By 2030, LNG supplies will triple to approximately 60

BCFD. The Middle East and Africa are becoming major
suppliers, and North America and Europe will import
significantly increased volumes.

Like oil, natural gas is becoming more of a global

commodity as demand increases and remote supplies
are increasingly transported to distant markets.

18
CO2 outlook by region United States CO2 emissions
United States European Union China IEA – Ref. Case
CO2 emissions
billion metric tons billion metric tons billion metric tons billion metric tons
9 Average 9 Average 9 Average
9 Average Growth/Year
Growth/Year Growth/Year Growth/Year 2005 – 2030
2005 – 2030 2005 – 2030 2005 – 2030 -0.6%
-0.6% -0.6% 2.1%

6 6 6 6
IEA – Ref. Case

IEA – Ref. Case

3 3 3 3

0 0 0 0
1980 2005 2030 1980 2005 2030 1980 2005 2030 1980 2005 2030

The difference in energy trends between developed and The anticipated decline in CO2 emissions in the United
developing nations drives divergent forecasts for global States reflects aggressive assumptions in our outlook on
6000
5000
10000

6000
energy-related CO2 emissions.
5000

4000
energy-efficiency improvements and shifts to lower-carbon
8000

4000
fuels.
5000 We assume that the light-duty-vehicle standards
We expect CO2 emissions in the United States to begin
3000
6000 mandated
4000
by EISA in 2020 are implemented, and that
3000

to decline in the near future, at an average rate of

2000
MPG performance continues to improve thereafter. We
approximately 0.6 percent per year from 2005 to also
3000
assume that coal’s share of power generation drops
4000
2000

2030. This decrease reflects a relatively modest

1000
1000
2000 from
2000 50 to 30 percent, that wind power will increase more

decline in energy demand, coupled with the use of

0
than fifteenfold over 2005, and that 35 new nuclear plants
0
1000
less-carbon-intensive fuels and the increased penetration will be built in the United States.
0

of energy-efficiency technology. By 2030, U.S. emissions 0

are expected to be about 15 percent lower than they Still, the projections resulting from these assumptions
were in 2005. The European Union is likely to have a fall short of the CO2 reductions being discussed by
similar rate of decline. some policymakers. Closing the gap would require
step-changes in technology beyond what is available
China, however, is facing significant increases in CO2 today, as well as significant costs.
emissions as it strives to meet rapid growth in demand for
energy for power generation, transportation and industrial
purposes. We expect China’s CO2 emissions to increase
by approximately 70 percent by 2030. This increase
reflects growth in energy demand as well as the prominent
and growing use of coal. By 2030, China’s CO2 emissions
will be comparable to the combined emissions of the U.S.
and Europe and will represent about 25 percent of the
world’s CO2 emissions.

The Outlook for Energy: A View to 2030 19

20
 the energy imperative
to meet the world’s energy challenges,
an integrated set of solutions is needed

The Outlook for Energy: A View to 2030 21

an expanded Outlook for Energy
As this year’s Outlook for Energy makes clear, the world
is presented with two key energy challenges: providing
the affordable, reliable supplies of energy necessary for
continued economic growth and human progress while
also taking meaningful actions to mitigate CO2 emissions
associated with energy use. The scale of these challenges
is evident in the Outlook’s central conclusion – that by
2030, even with increasingly significant gains in energy
efficiency, global energy demand will be about 35 percent
higher than it was in 2005.
This year, to accompany its Outlook for Energy,
ExxonMobil is including a detailed
discussion of the actions that should be
considered to help meet the world’s energy
and environmental challenges.
ExxonMobil is the world’s largest publicly traded energy
company; we expect to spend more than $125 billion
from 2008 to 2012 on finding new energy sources and
developing new energy projects around the world. These
projects must meet ExxonMobil’s rigorous investment
criteria, which consider a range of technical and economic
risks, including those related to uncertain fiscal and
regulatory policies of governments. The Outlook for
Energy helps guide our decisions by laying out long-
term expectations, which are essential in an industry like
energy, in which billion-dollar projects have timelines that
span decades.
But ExxonMobil is just one company, and the energy
we produce meets only 2 percent of the world’s needs.
Clearly, to successfully meet the long-term energy and
environmental challenges described in this document,
action will be required by many – industries, governments
and individuals – in all parts of the world.
On the following pages, we describe the integrated
set of solutions that ExxonMobil believes should be
considered to address the world’s long-term energy and
environmental goals, based on our detailed analysis of
trends in energy supply, demand and technology. This
integrated approach incorporates improved energy
efficiency, development of all commercially viable energy
sources, and effective steps to curb emissions. It also
recognizes the importance of technology. ExxonMobil,
a recognized industry leader in technology, is taking
meaningful steps to advance each of these goals.
22
How can we – individuals, corporations and nations –
continue to provide the reliable and affordable energy that
is necessary to sustain economic and social progress
while also minimizing the effects of energy usage on
the environment?
ExxonMobil’s Outlook for Energy projects that by 2030,
because of rising populations and expanding economies –
especially in China, India and other fast-growing countries –
global energy demand will be 35 percent higher than it
was in 2005, even assuming significant gains in energy
efficiency. Power generation and transportation will be the
sectors most impacted by this growth. Although there may
be fluctuations in demand based on short-term economic
conditions, the fact remains that the world will need
substantially more energy over the coming decades.
Other organizations, including the U.S. Department of
Energy and the International Energy Agency, also project
dramatic increases in energy demand through 2030.
meeting the challenge –
an integrated approach
The world’s energy challenge is multidimensional. It
involves a unique combination of factors, including science,
technology, economics and politics. It incorporates the
needs and desires of the world’s more than 6.5 billion
people, the health of national economies, and the one
planet we all share.
Meeting the world’s growing energy needs while also
protecting the environment will require an integrated
set of solutions. This integrated approach includes
three key elements:
• accelerating gains in energy efficiency to conserve
supplies, reduce the growth rate of greenhouse-gas
emissions and minimize energy costs,
• expanding all commercially viable energy sources
to enhance the availability of reliable and affordable
energy, and
• developing and deploying technology to help mitigate
the growth of emissions associated with energy use.
A comprehensive 2007 study conducted by the National
Petroleum Council in the United States, with input from
more than 350 groups, including nongovernmental
organizations, agencies and companies, reached a
similar conclusion: “The world will need all the economic,
environmentally responsible energy sources that can
be found to support and sustain prosperity in the
coming decades.”
The report, called Facing the Hard Truths about Energy,
acknowledged the projected growth in global energy
demand and said that although the world is not running
out of energy resources, “there are accumulating risks to
continuing expansion of oil and natural gas production
from the conventional sources relied upon historically.”
These risks, the report said, “create significant challenges
to meeting projected energy demand.” The Council also
urged an integrated approach that incorporates expanded
supplies and energy efficiency.
Meeting the world’s growing demand for energy is essential.
Our global economy and modern way of life depend on
it, as does the ability of hundreds of millions of people in
developing countries to achieve a level of living standards
that many in the developed world take for granted.
ExxonMobil is optimistic about our ability to achieve this goal
but also realistic about the level of investment, technology
and long-term commitment it will require.
Keeping pace with the world’s growing need for energy
is something the energy industry has done successfully
for more than 100 years. The scale of the challenge
always has been enormous. Since 1980, the industry has
successfully responded to a 65 percent increase in energy
demand, helping facilitate a period of unprecedented
economic growth. Much of this success is the result
of advances in technology, the lifeblood of the global
energy industry.
the need for technology
Today’s energy industry employs an astonishing amount
of technology to find, produce and deliver oil and gas
for consumers around the world while also reducing
environmental impacts.
The Outlook for Energy: A View to 2030
Continued advances in technology will be essential to
meeting all of the world’s energy needs through 2030.
• Technology can moderate energy-demand growth
by making homes, vehicles and businesses more
energy-efficient. For example, since 1970, reductions
in “energy intensity” – the amount of energy needed
to produce a unit of economic output – helped to
effectively meet well over half the growth in U.S.
energy demand.
• Advances in technology can bring more energy to
more consumers and minimize the cost. For example,
advances in the production and shipping of liquefied
natural gas have made it economical to ship natural
gas from distant locations around the world to the
consumers who need it.
• Technology can mitigate the growth in emissions
of CO2 and other greenhouse-gas emissions.
One promising technology is called carbon capture
and storage, which would separate, trap and
store CO2 that would otherwise be released into
the atmosphere.
And, further down the road, new technologies – developed
by the energy industry and other fields, such as automobile
manufacturing and power generation – could produce the
breakthroughs that could radically change how the world
uses energy.
No single technology will meet all of the world’s energy
challenges; many advances and breakthroughs will be
required on numerous fronts.
a long-term view
Supplying energy is a long-term business in which
projects can take more than a decade from conception
to development. How well the world meets the energy
challenges it faces depends heavily on the investment and
policy decisions that are made over the next several years.
23
24
 efficiency:
a powerful energy source

The Outlook for Energy: A View to 2030 25

Increasing energy efficiency will be essential to meeting the
world’s energy and environmental challenges through 2030
and beyond.
Efficiency means doing the same or more with less by
employing advanced technologies and by making smart
choices about how we use energy to fuel vehicles,
generate electricity and power homes and businesses.
As the International Energy Agency has stated, “Improved
energy efficiency is often the most economic and readily
available means of improving energy security and reducing
greenhouse-gas emissions.”
the power of efficiency
Efficiency is a powerful source of energy. By curbing
demand, it reduces the amount of oil, gas and other
energy that must be found, developed and delivered.
• From 1970 to 2005, reductions in “energy intensity” –
the amount of energy needed to produce a unit of
economic output – helped to reduce U.S. energy
demand by well over 50 percent from what it might
have been otherwise.
• Similar results are seen elsewhere. The International
Energy Agency estimates that without any efficiency
gains, energy use in 11 IEA countries would have been
almost 60 percent higher in 20051 than in 1973.
• Improvements in efficiency will continue to help
reduce the rate of energy-demand growth. The rate
of demand growth from 2005 to 2030 will be about
two-thirds that experienced in the prior 25 years. That
reduced rate results in demand being lower in 2030
by approximately 50 million barrels of oil-equivalent
energy per day.
• As a result, global energy intensity in 2030 is likely to
be about 50 percent below the level of 1980.
The world will need to continue – and accelerate –
gains in energy efficiency in homes, vehicles and
businesses in order to have enough energy to power
continued economic expansion.
1
International Energy Agency, Worldwide Trends in Energy Use and Efficiency, 2008
26
Continued improvements in efficiency can be achieved
through more widespread application of existing
energy-saving technologies, and the development of
new technologies.
efficiency in transportation
Globally, the transportation sector offers great potential for
energy-efficiency gains. Transportation accounts for more
than half of global liquids consumption today and about a
quarter of energy-related carbon-dioxide emissions.
Transportation is a broad category that includes airplanes,
marine vessels and rail, but more than 75 percent of
transportation-related energy demand comes from
light-duty and heavy-duty vehicles – the cars and trucks
used for personal transportation and for the transport of
commercial goods.
Most of the light-duty vehicles on the road today use
internal-combustion engines fueled by gasoline, which
are only about 15 percent efficient. In other words, only
about one-seventh of the energy from the fuel actually
powers the car. The rest is lost to other factors that
include engine and drivetrain inefficiencies, idling and
internal friction of engine parts. Clearly there is room
for improvement.
However, the world’s vehicles are in fact far more efficient
today than they were 20 years ago. But in the U.S.
over the past 20 years, the fuel-economy gains that
could have been achieved from advances in efficiency
have been largely offset by the trend toward bigger, more
powerful vehicles.
As the number of vehicles in the world continues to
rise, energy efficiency in the transportation sector will
become increasingly important.
To improve the efficiency of the global vehicle fleet, we
will need to apply advanced fuel-saving technologies
more broadly to conventional vehicles, expand the use
of advanced vehicles such as hybrids and promote the
development of breakthrough technologies such as
hydrogen fuel cells.
conventional vehicles, the type widely used today,
can be made more efficient by application of advanced
technologies. Examples include improved engine
technologies such as turbo-charging, cylinder deactivation,
camless engines and improved lubricants as well as
improvements in transmission systems (e.g., continuously
variable transmission). Efficiency can also be increased by
improved aerodynamics, reduced vehicle weight through
the use of lightweight materials (e.g., plastics), and tires
that more effectively retain inflation. Although each of these
technologies alone leads to small individual improvements in
efficiency, collectively they can improve fuel economy by 25
percent to 35 percent.
advanced vehicles are available today and can greatly
improve fuel economy, but they are generally more
expensive than fuel-economy-improvement technologies
for conventional vehicles.
• Hybrid vehicles couple the internal combustion
engine with an electric motor. Full hybrids can produce
fuel-economy gains of about 30 percent compared
with nonhybrid vehicles. Hybrids are more expensive
than their traditional counterparts, but as production
increases and technology continues to improve, the
cost differential is expected to decline over time.
In addition, important progress is being made on
technology that would allow hybrids to run on
lithium-ion batteries – similar to those that power
today’s mobile phones and laptops. These batteries
are compact, lightweight and powerful but so far have
been unsuitable for hybrid vehicles, in part because
the thin film that separates the positive and negative
elements of the battery – intended to protect against
short-circuiting and overheating – can break down
The Outlook for Energy: A View to 2030
when the battery is scaled up to the size required to
power a vehicle. Lighter, smaller and more durable
lithium-ion batteries using advanced separator films
are expected to help improve the reliability, energy
efficiency and affordability of hybrid vehicles.
• Advanced diesel technology enables diesel engines
to achieve gasoline engine air-quality standards
through the use of emission-control devices, improved
combustion and the use of lower-sulfur diesel
fuel. These advancements maintain a 30 percent
improvement in fuel economy compared to traditional
gasoline engines while still meeting air quality standards.
breakthrough technologies have the potential to
make even greater improvements in fuel economy and/or
diversify energy sources for transportation.
• Homogeneous Charge Compression Ignition
(HCCI) combines the most efficient features of
gasoline and diesel engines. Gasoline engines
featuring HCCI achieve ignition through compression,
like diesel engines, with very efficient combustion,
resulting in low emissions. The result is a 30 percent
improvement in fuel economy. Early applications of
HCCI are already being developed. HCCI will require
significant improvements in engine hardware, controls
and interactions with fuels.
• Hydrogen, when used in a fuel cell vehicle, emits
water vapor from the tailpipe and has the potential
to be an efficient energy carrier. Hydrogen-powered
fuel cell vehicles could bring important benefits for
consumers, the environment and energy security.
However, the adoption of hydrogen as a vehicle fuel
faces several challenges. Hydrogen does not exist on
Earth as a stand-alone element – it must be separated
from materials that contain hydrogen, a process that
itself requires energy. Widespread use of hydrogen
would also require the establishment of a system for
the distribution and storage of the fuel, separate from
the system already in place for traditional vehicle fuels.
An alternative approach involves creating hydrogen
on-board the vehicle by using an existing fuel as
the feedstock. This approach has the advantage of
eliminating the need for a new fueling infrastructure.
27
innovation in ‘drive’: making our vehicles more efficient
Improving vehicle fuel economy is an essential component
in the integrated approach to meeting our world’s energy
and environmental challenges. Together with automobile
manufacturers and other partners, ExxonMobil is using its
industry-leading expertise in chemicals and fuels to develop
vehicle technologies that can improve fuel economy and
reduce emissions.
advanced technologies for
conventional vehicles
• ExxonMobil has developed advanced plastics for use in
car parts such as bumpers and fuel tanks. Plastics make
vehicles lighter, which reduces fuel consumption. For
every 10 percent drop in vehicle weight, fuel economy
improves by 7 percent.
• Together with tire manufacturers, ExxonMobil has
developed a new tire-lining technology that uses up to
80 percent less material in the manufacturing process,
making tires lighter and keeping them properly inflated.
A car with underinflated tires burns up to an extra tank
of gasoline every year. ExxonMobil scientists developed
a new form of synthetic rubber, called Exxpro specialty
elastomers, and then used that material to create a
revolutionary inner tire liner that is as light and thin as
a plastic bag but retains much more air than
conventional liners.
• ExxonMobil introduced Mobil 1
Advanced Fuel Economy, a
lower-viscosity synthetic
motor oil that can improve
fuel economy by up to
2 percent versus motor
oils most commonly
used. If one-third of U.S.
motorists reduce their
gasoline consumption by
2 percent, it would prevent
the emission of about
8 million metric tons of
carbon dioxide (CO2) per
year, which would have
the same effect as taking
around 1.5 million cars
off the road.
These advanced technologies add up to big efficiency gains
over time. If just a third of U.S. vehicles used technologies such
as these, it would save about 5 billion gallons of gasoline and
greenhouse-gas emissions equivalent to taking about 8 million
cars off the road.
28
advanced vehicles and
breakthrough technologies
While incremental advances in technology continue to
make the internal-combustion engine more fuel-efficient,
a tremendous amount of research is being undertaken to
develop breakthrough engine technologies that could produce
step-changes in fuel efficiency.
ExxonMobil is collaborating with vehicle and engine
manufacturers and others on advanced technologies that
hold great promise to improve fuel and engine system
performance – and improve efficiency.
ExxonMobil has developed a new generation of separator
films that will help hybrid vehicles to run on lithium-ion
batteries. ExxonMobil researchers used hydrocarbon-
based polymers to create a plastic separator film that greatly
improves the safety, power and reliability of larger lithium-
ion batteries for hybrid vehicles. Together with other battery
advances, ExxonMobil’s new plastic film separator is a
breakthrough that could help put more fuel-efficient hybrid
and electric vehicles on the road.
ExxonMobil is researching a new engine technology that
could achieve a 30 percent improvement in fuel economy
by combining the best features of gasoline and diesel-
powered engines. This technology is called Homogeneous
Charge Compression Ignition (HCCI). Gasoline engines
featuring HCCI achieve ignition through compression, like
a diesel engine, with very efficient combustion, resulting in
low emissions. ExxonMobil is working with automobile and
engine manufacturers on this and other technologies, with the
objective of improving fuel economy and reducing emissions
of CO2 and air pollutants.
ExxonMobil is developing a breakthrough technology that
could advance the use of hydrogen fuel cells. Together
with partners in industry and the research community,
ExxonMobil is developing an innovative on-board hydrogen-
powered fuel cell system. This new technology, which will
be applied first to industrial vehicles such as forklifts, converts
traditional hydrocarbon fuels (such as gasoline or diesel) into
hydrogen directly on-board a vehicle, eliminating the need for
separate facilities for producing and distributing hydrogen.
Measured on a “well-to-wheels” basis, this on-board
hydrogen fuel system could be up to 80 percent more fuel-
efficient and emit 45 percent less CO2 than today’s vehicles.
ExxonMobil is helping to advance other game-changing
transportation technologies – fuels such as cellulosic
ethanol and biodiesel produced from bacteria – through its
sponsorship of the Global Climate and Energy Project
(GCEP) at Stanford University.

ExxonMobil’s battery separator film helps propel the Electrovaya Maya-300.
• Plug-in hybrids (PHVs) and electric vehicles (EVs)
could diversify transportation fuel sources beyond
petroleum and could decrease greenhouse-gas (GHG)
emissions if low-carbon electricity is used. Plug-in
hybrids and electric vehicles use external sources of
electricity to charge the battery that powers the vehicle.
Since the PHVs and EVs generally require five to 20
times larger batteries than hybrids, breakthroughs
in battery cost and performance will be needed to
achieve widespread acceptance. Due to the cost and
technology challenges involved, the Outlook does not
anticipate significant PHV and EV penetration by 2030.
efficiency in power generation
The International Energy Agency estimates that if all
countries produced electricity at current best-practice
levels of efficiency, fossil-fuel consumption for public
electricity generation could be reduced by between 23
percent and 32 percent.2
As The Outlook for Energy shows, power generation to meet
rapidly growing electricity needs will be the most significant
factor in energy-demand growth through 2030, representing
approximately 50 percent of the increase. Rising demand for
electricity will be concentrated in developing countries.
Coal will continue to be the most prominent source of
electricity through 2030, but natural gas will see the most
significant growth because it is the cleanest-burning of the
2
International Energy Agency, Worldwide Trends in Energy Use and Efficiency, 2008
The Outlook for Energy: A View to 2030
fossil fuels. Nuclear power will also expand after 2020.
A key area of uncertainty that will influence investments
in new power generation is the potential cost of CO2
emissions. The environmental impact of electricity
generation can be reduced by promoting cleaner-burning
fuels such as natural gas as well as by deploying
more-advanced technologies.
There are many efficiency-improvement options in the
power generation sector.
coal. For new coal plants, efficiency can be improved
by building supercritical or ultrasupercritical steam cycle
plants, which achieve greater efficiency by running boilers
at higher temperatures and pressures, especially if they
replace older subcritical steam plants.
Another technology, Integrated Gasification and Combined
Cycle (IGCC), turns coal into a synthetic gas to power
gas-turbine electricity generators and then uses the waste
heat from that process to generate steam to run a second
turbine. The combination of IGCC and carbon capture
and storage (CCS) is among the most promising emerging
technologies for reducing CO2 emissions associated
with coal – the most abundant and widely used fossil
fuel in power generation. This technology requires further
advancement to improve reliability and lower costs. The
Outlook assumes that primarily demonstration plants
will be installed through 2030, with commercialization
occurring later.
natural gas, the cleanest-burning fossil fuel, emits more
than 40 percent less CO2 than coal. Natural gas power
generation plants have improved their efficiency by using
combined-cycle power plants. Further improvements in
natural gas power generation can be made through the
use of higher-efficiency combustion turbines.
cogeneration is the simultaneous production of electricity
and steam, typically using natural gas. This technology
is usually employed at large industrial facilities such as
refineries and aluminum plants. With the latest technologies,
cogeneration is about twice as efficient as traditional
methods of producing steam and power separately.
29
making power cleaner: cogeneration, gasification, CCS
As part of its commitment to meeting the world’s energy
challenges, ExxonMobil is using its technological expertise
to help reduce the emissions associated with running
its operations.
cogeneration
ExxonMobil is an industry leader in the use of cogeneration –
the process by which the heat that is generated during
the production of electricity is captured and used for
other purposes.
ExxonMobil has interests in about 100 cogeneration facilities
in more than 30 locations worldwide. These facilities, which
represent decades of investment, have the capacity to
produce more than 4.5 gigawatts of electricity – enough to
power more than 2 million households. With new facilities
under construction around the world, we expect to increase
this capacity to more than 5 gigawatts in the next three years.
The cost of providing energy to ExxonMobil’s worldwide
operations is more than $10 billion a year. Cogeneration helps
reduce our energy costs by allowing ExxonMobil to generate
its own electricity while also producing the steam needed
in processes that transform raw materials into consumer
products. Cogeneration provides significant environmental
benefits because it uses less fuel – and produces fewer
greenhouse gases – than when separate facilities are used
to produce power and steam.
ExxonMobil’s cogeneration project in Antwerp, Belgium, will
integrate recovered heat into the process of refining crude oil,
which is unique in the industry for a large-scale project. The
plant will produce 130 megawatts of electricity, enough to
meet the refinery’s power requirements and also 85 percent of
the electricity needed by other ExxonMobil sites in Belgium.
gasification
ExxonMobil is working with others to develop next-generation
technology for gasification. Gasification allows any feedstock
that contains carbon – coal, coke or biomass – to be
converted into “synthesis gas” that can be used to produce
electricity, or converted into chemicals or transportation fuels.
The technology being developed will focus on development
of a gasification-reactor system, which has the potential to
offer significant cost advantages compared to conventional
approaches. The goal is to improve efficiency and reduce the
cost of gasification, which still is costly relative to alternative
ways of producing the same products. When combined with
carbon capture and storage, increased use of gasification
could reduce greenhouse-gas emissions associated with coal.
30
Beyond gasification, ExxonMobil has other proprietary
technologies that are capable of converting synthesis gas or
methanol produced from synthesis gas to transportation fuels,
lubricants and chemicals.
capturing carbon: CCS holds promise
ExxonMobil believes that carbon capture and storage (CCS)
represents an important option to address global CO2
emissions. CCS technology is used to separate CO2 from a
gas stream, compress it, transport it by pipeline and inject it
underground for safe storage.
ExxonMobil is a global leader in the use of these technologies.
We have developed and used them for many years at
industrial scale in operations that capture CO2 from oil and
gas production, transport it and inject it as part of enhanced
oil recovery and other operations. We are also a partner in one
of the longest-running CCS projects in the world: the Sleipner
field, off the coast of Norway, where more than 1 million tons
of CO2 have been reinjected each year since 1998.
Studies indicate that carbon capture and storage technologies
could be a major contributor to reducing CO2 emissions over
this century. But before CCS can be widely deployed on a
global scale, it must overcome three challenges:
• Capture is the first and most capital- and energy-
intensive step of the CCS process. The most significant
challenge is to apply CCS at large coal-fired power
plants and large industrial combustion sources with
capture technologies and infrastructure that are reliable,
efficient and cost-effective. Significant technological
advancements are being pursued.
• The second component is transport. As the capture
facility is likely to be positioned at a distance from
a storage site, moving the CO2 through a pipeline
from the capture facility to the storage site will require
infrastructure that utilizes advanced technology and
extensive quality-control procedures to ensure the
integrity of the lines.
• The third component, storage, includes injection,
monitoring and ensuring the integrity of the sites. A
defined regulatory process will need to be in place
that includes a timeframe for post-closure monitoring
and a process to transfer long-term responsibility to a
government entity.
To address these concerns, we have conducted our own
research on this technology for years and support external
research aimed at addressing the scientific, economic,
technical and policy challenges to CCS. ExxonMobil, along
with the European Commission, is sponsoring in part a
ground-breaking research initiative called “CO2ReMoVe” to
establish scientific monitoring standards and determine the
reliability of geological CO2 storage.

We are also involved in CCS research initiatives through

the International Energy Agency Greenhouse Gas R&D
Programme, the University of Texas, the Georgia Institute of
Technology, the Massachusetts Institute of Technology and
the Global Climate and Energy Project at Stanford University.

controlled freeze zone

Advances in technology are likely to make carbon capture

and storage less expensive over time. ExxonMobil is investing
more than $100 million in a test facility to develop one such
technology.

Controlled Freeze Zone (CFZ) is a single-step cryogenic

separation process for removing CO2 and other undesirable
elements from raw natural gas. It will be deployed at a
commercial demonstration plant in Wyoming that is
scheduled to begin operations in late 2009.

CFZ is expected to be a lower-cost process to develop

gas high in impurities, such as carbon dioxide, and reinject
the impurities. That is important because our world needs
additional supplies of clean-burning natural gas.

But by making CO2 capture from natural gas more affordable,

this new CFZ technology may also make CCS a more practical
option in the effort to address the risks of climate change.

As an industry leader in cogeneration applications, ExxonMobil has an interest in about

100 such facilities in more than 30 locations worldwide, including Baytown, Texas.

The Outlook for Energy: A View to 2030 31

32
 supply:
all energy
sources
have a role

The Outlook for Energy: A View to 2030 33

extending our energy frontiers
technology is identifying new ways to find energy
Breakthrough technologies – including some pioneered
by ExxonMobil – have helped keep pace with rising global
energy demand by making more energy supplies available,
while also reducing the environmental footprint of energy
development. Technology is more important today than ever,
since a significant portion of the world’s oil and gas resources
is located in challenging environments such as deepwater,
heavy oil/oil sands, tight gas and Arctic regions, which require
innovative approaches to energy production.
seismic mapping. Four decades ago, ExxonMobil pioneered
an exploration technology called 3-D seismic, which uses
sound waves to form sharp three-dimensional images of
underground formations, facilitating the location of oil and
gas deposits. Now, 3-D seismic is standard throughout the
energy industry. ExxonMobil employs the latest generation of
3-D technology, coupled with advanced computing, to create
detailed images of the world’s oil and gas reservoirs. Today,
four-dimensional seismic technology, which compares 3-D
seismic surveys from the same field over different points in
time, is extending our reach, and optimizing thermal recovery
in heavy-oil reservoirs.
R3M. ExxonMobil scientists developed Remote Reservoir
Resistivity Mapping, or R3M. It is a sophisticated
technology based on a simple fact: that oil and gas are poor
conductors of electricity. R3M uses extremely low-frequency
electromagnetic waves to discern these resistive deposits –
remotely “mapping” undersea oil and gas reservoirs with
accuracy. R3M improves our ability to search for oil and gas
in hard-to-reach locations such as deep water and has been
used successfully to explore off the coasts of West Africa,
Brazil, Colombia and Canada as well as in the Gulf of Mexico.
directional drilling. Today, wells can be drilled horizontally
as well as vertically, beginning miles from the oil and gas they
are intended to reach. This technology enables ExxonMobil
to develop large resource areas from a single location,
minimizing our impact on the environment. In Russia’s Far
East, for example, we have been using directional drilling
technology to reach oil and gas reserves six miles offshore
Sakhalin Island.
unconventional resources. ExxonMobil technology has
opened up so-called “unconventional” energy resources
such as tight gas, heavy oil and oil sands – which previously
were considered inaccessible or too costly to recover. For
example, in Colorado’s Piceance Basin, ExxonMobil’s Multi-
Zone Stimulation Technology (MZST) has opened up tight gas
resources by allowing operators to create fractures in reservoir
rock at a more rapid rate than conventional technology so gas
can flow more easily. Using MZST and our Fast Drill Process,
34
ExxonMobil is increasing recovery and production rates
at Piceance while reducing development costs and
our environmental footprint. Breakthroughs such as these
have contributed to a recent increase in U.S. natural
gas production.
enhanced oil recovery. ExxonMobil has developed expertise
in improved recovery techniques such as injecting liquids
or natural gas into a reservoir to reduce or even reverse
the natural decline of a producing field, depending upon
a reservoir’s geology and other factors. These techniques
can raise underground pressures and push oil through
rock toward a producing well bore, increasing oil or gas
recovery by up to three times what could previously have
been captured without these technologies. ExxonMobil is a
recognized industry leader in this technology, which enables
us to breathe new life into mature reservoirs and produce
more from existing developments ranging from the Means
Field in Texas to the Upper Zakum oil field offshore Abu Dhabi.
deepwater. Advances in technology have enabled
ExxonMobil to produce offshore oil and gas deposits in water
depths that were impossible a generation ago. Today, we can
build a floating production, storage and offloading (FPSO)
vessel that enables us to reach targets in water depths of
over 5,000 feet. We recently deployed these deepwater
technologies in the Erha fields offshore Nigeria, where we are
partnering with the Nigerian National Petroleum Corporation
to produce at water depths of 4,000 feet.
The success of our approach is demonstrated by the addition
of an average of 3.1 billion oil-equivalent barrels to the
resource base per year over the past five years.
With the Orlan offshore platform, part of the Sakhalin-1 project, in the
background, the winter waters of the Sea of Okhotsk become interlocked
with flowing ice six feet thick.
A typical satellite platform operates on 700 watts of electricity compared to a home air conditioner that requires about 1,000 watts.
Our Outlook for Energy, along with many other studies,
makes clear that fossil fuels – oil, gas and coal – continue
to be the world’s predominant energy resources. No other
fuels are as versatile, reliable and affordable on the scale
needed to meet global demand. By 2030, oil, gas and
coal will still provide nearly 80 percent of the world’s
energy needs.
But to meet growing demand through 2030 and beyond,
the world will need to develop all economical energy
sources. Every barrel, every Btu, helps make the world
more energy secure and supports progress for people
everywhere. Advances in technology will be essential to
help expand energy supplies.
The Outlook for Energy: A View to 2030
the world will need more oil. Crude oil and its refined
products – gasoline, diesel and jet fuel – meet more than
95 percent of the world’s transportation needs today.
Through 2030, the transportation sector is expected to
be one of the fastest-growing areas for energy demand.
Substantial oil resources remain to meet this demand;
technology can help us find, deliver and use oil
more efficiently.
the world will need more natural gas. Natural gas
is expected to be the fastest-growing major fuel source
through 2030 because of its abundance, clean-burning
properties and efficiency as a fuel for many purposes,
including power generation. Rising demand for natural gas,
plus advances in technology, are spurring development of
a global market for liquefied natural gas (LNG), which can
help bring more gas supplies to consumers.
35
LNG: natural gas goes global
Many of the technological advances that are enabling
the creation of a global liquefied natural gas (LNG) market
were developed by ExxonMobil, the global leader in
LNG technology.
ExxonMobil is one of the few companies in the world with
the expertise and financial strength to pursue an integrated
approach to LNG, from well head to customer. With our
state-of-the-art technology, we develop remote gas fields;
build liquefaction facilities; design, construct and charter LNG
tankers; and construct terminals needed to “regasify” the
LNG in demand markets.
ExxonMobil, together with its partners, currently is producing
nearly 35 million tons per year of LNG. We anticipate
increasing our joint production to almost 65 million tons per
year by 2010. And beyond 2010, we expect this to go up to
around 100 million tons per year.
the world’s largest “trains”
In a cost-intensive business like LNG, economies of scale are
critical. ExxonMobil engineers, working closely with joint-
venture partners, have designed and are building the world’s
largest LNG “trains.” The facilities used to convert natural
gas to liquid are called “trains” because of the sequential
arrangement of the equipment required to process the gas.
Over the past 10 years, the production trains that manufacture
LNG have doubled in size from 2 million tons per year to
5 million tons per year, and new trains able to process 7.8
millions tons per year are under construction by ExxonMobil
and our partners.
Through the use of ExxonMobil technology, we have been able to increase
the size of liquefied natural gas (LNG) ships, such as the Q-Max LNG ship,
and significantly reduce shipping costs.
36
Today, RasGas and QatarGas – joint ventures including
ExxonMobil and our partner Qatar Petroleum – are developing
LNG trains in Qatar that each will be able to process 7.8
million tons per year. That’s equal to more than 1 billion cubic
feet a day of natural gas, enough to meet, for example, the
daily needs of about 5 million residential customers.
These Qatar trains will have the sufficient scale of efficiency
to competitively reach North American markets.
The LNG trains are part of our work to support the
development of Qatar’s North Field, the largest non-
associated gas field in the world. ExxonMobil has been
working with Qatar Petroleum to develop the field since the
early 1990s. ExxonMobil and Qatar Petroleum, along with
our respective affiliates and international coventurers, are
building integrated LNG “chains” consisting of trains, ships
and receiving terminals to serve customers in Europe, Asia
and the United States.
a breakthrough in LNG tankers
Shipping accounts for a significant portion of the cost
of bringing LNG to market, so finding ways to lower
transportation costs helps make it possible to ship LNG
longer distances.
The size of LNG ships had been virtually unchanged for more
than 30 years. Working with our partner Qatar Petroleum,
ExxonMobil developed a new generation of larger, more
efficient ships. The Q-Flex and Q-Max designs can carry
about 45 and 80 percent, respectively, more LNG than
the average carrier operating today and can access LNG
terminals in all of the world’s major LNG markets.
This landmark achievement will enable Qatar to send its
abundant natural gas resources to markets well beyond its
traditional customer base in Asia.
The breakthrough in LNG transportation was the result of
efforts by teams of experts who developed larger cargo tank
designs and optimized ship propulsion through use of more
efficient power plants and hull configurations. In addition, the
ships deliver more LNG to market, as processing technology
has been installed on the ships to re-liquefy LNG that
otherwise would convert back into a gaseous state and be
used for ship fuel during the course of a long sea voyage.
ExxonMobil and Qatar Petroleum’s LNG fleet will include 27
Q-Flex and Q-Max ships, with the first ships having entered
service in 2007 and all ships delivered by the end of 2009.
The Adriatic LNG terminal is designed to store and regasify LNG to deliver 775 million cubic feet of natural gas a day when it reaches full operational capacity
in 2009.
The UK, Italy and the U.S.
Once an LNG tanker reaches its destination, its cargo must
then be turned back into gas so that it can be shipped via the
pipeline network that reaches consumer markets. ExxonMobil
is employing its technological expertise and long experience in
LNG to develop regasification terminals.
For example, ExxonMobil’s Adriatic LNG terminal will be the
first offshore gravity-based regasification terminal in the world.
The terminal was constructed in Algeciras, Spain, and
transported in September 2008 to its final location off
Italy’s northern Adriatic coastline. The main structure of this
concrete-based terminal will rest on the seabed in 95 feet
of water, about 10 miles offshore, and out of sight of land.
The terminal will supply the Italian gas market with up to 775
million cubic feet of gas per day, or about 10 percent of the
country’s gas requirements.
The Outlook for Energy: A View to 2030
ExxonMobil also is constructing onshore regasification
terminals to bring LNG from Qatar to customers in the U.S.
and Europe.
The Golden Pass LNG terminal being built near the Texas-
Louisiana border will have a capacity of 2 billion cubic feet
of natural gas per day. The facility will include unloading
facilities for LNG ships, five large storage tanks, regasification
equipment and a 78-mile pipeline to connect to several
natural gas lines that feed Texas and much of the eastern
United States. The Golden Pass facility is expected to begin
operation in 2009.
Our South Hook terminal in Milford Haven, Wales, will start up
in the winter of 2008/2009, with an ultimate capacity to deliver
up to 2 billion cubic feet of natural gas daily into the UK
gas grid.
37
the world will need more coal. Coal is one of the
world’s most abundant energy resources, and today it
supplies nearly one-quarter of global energy demand,
mostly for power generation. Demand for coal will be
especially strong in China and other developing countries
through 2030. Advances in combustion and carbon
dioxide capture technologies could reduce the emissions
associated with coal.
the world will need more nuclear power. Nuclear
power is drawing renewed interest because it may provide
a cost-competitive and low-emissions source of electricity
production while also enhancing energy security. Next-
generation nuclear technology could make nuclear power
safer. Concerns about the proliferation and safety of
nuclear fuel and waste remain, however, and will need
to be addressed.
the world will need more renewable energy sources.
Traditional renewable energies such as biomass, hydro
and geothermal will continue to increase over the outlook
period. In addition, wind, solar and biofuels, such as
ethanol, are expected to be the fastest-growing energy
sources through 2030, attracting significant levels
of investment.
• wind. Wind’s contribution to electricity production
has been increasing. Taller and larger turbines
have improved the economics of wind energy over
the last two decades. Industry has been ramping
up production of wind turbines for increased
penetration of this energy source. However, significant
advancement of wind energy in many locations will
require the construction of new transmission lines,
and siting issues will also need to be addressed.
• solar. Solar energy can be used to produce electricity
or, more commonly, heat. The most common route
to produce solar electricity is via a photovoltaic (PV)
device. Solar PV electricity is expensive today, but
there are many breakthrough ideas being pursued
for next-generation PV solar cells. Research is aimed
at either significantly lowering the material cost or
increasing the efficiency. If successful, breakthroughs
such as these have the ability to someday improve the
economic attractiveness of solar PV power generation.
38
• biofuels. Biofuels can be generated from food-
based (first-generation) or non-food-based crops
(second-generation) to supplement liquid fuels. The
scale of first-generation biofuels is limited in most
regions due to land and water constraints. Non-food-
based biofuels could overcome these limitations
but will require breakthroughs in the growing and
processing of feedstocks. Specific areas of interest
include cellulosic ethanol, biomass gasification and
conversion, and algae.
Together, these three energy sources – wind, solar and
biofuels – are expected to grow at an average rate of 9
percent a year, and by 2030 they will meet 2 percent of
global energy demand, compared to less than 0.5 percent
in 2005.
We can’t afford to overlook any one of these energy
sources. Nor can we take any for granted.
the need for investment
Developing sufficient energy resources to meet rising
global demand will require massive amounts of capital –
over $1 trillion per year in energy-supply infrastructure
through 2030, according to the International Energy
Agency. Consistent with the expected growth in electricity
demand, more than half this amount will be for power
generation and distribution.
For this level of funding to be realized, a stable and
attractive investment climate must be in place wherever
the investments are required.
oil and gas: substantial resources remain
Oil remains the single biggest source of the world’s energy,
powering approximately 35 percent of the world’s needs.
Natural gas provides close to 22 percent. Substantial
resources remain to meet growing demand for oil and gas.
The U.S. Geological Survey, to cite just one authority,
estimates that approximately one-third of the world’s
conventional oil resources have been produced to date.
Approximately 2 trillion barrels of conventional oil are yet to
be produced – twice as much as all the oil produced in the
past. Unconventional resources – such as heavy oil and
energy derived from oil sands – are likely to significantly
add to the total resource base.
global oil resource base –
recoverable conventional resources
estimate source: U.S. Geological Survey (USGS)
USGS 1984
USGS 1987
USGS 1991
USGS 1994
USGS 2000
trillions of barrels 0 1 2 3
ExxonMobil Produced
YE 2007
Conventional Frontier
projection
However, there is an ongoing challenge associated with
overcoming barriers that impede the ability of the energy
industry to access these oil and gas resources.
Some of these barriers are geological – oil and gas
increasingly are found in remote or environmentally
challenging locations, like the Arctic conditions of Russia’s
Far East or the deep waters offshore West Africa.
Technology can meet these challenges and bring these
resources to market.
Other barriers are man-made:
• It is estimated that there is enough oil and natural gas
offshore and in nonwilderness and nonpark lands
in the United States to fuel 50 million cars and heat
nearly 100 million homes for the next 25 years, but
many of these resources have until recently been
placed off-limits by the federal government.
• In some producing countries, high energy prices
have encouraged governments to change existing
contracts with international oil companies or to further
nationalize their energy industries. These actions harm
The Outlook for Energy: A View to 2030
existing investments, create investment uncertainty
and limit the ability of international oil companies
to deploy technologies to increase efficiency and
production levels.
• In the United States, some have called for “energy
independence.” While expanding U.S. energy
production would be a positive action in terms of
meeting domestic demand, “energy independence”
for the United States, the world’s largest consumer,
is not feasible in the foreseeable future – nor is it
desirable. In fact, the U.S. economy and consumers
benefit from their access to the global energy market.
While about one-third of the crude oil Americans
consume is produced in the United States, the rest
comes from more than 35 countries; two of the United
States’ major suppliers are Canada and Mexico. This
diversity helps ensure security of supply. Policies
4 5
that focus on independence detract from the more
important goal of energy security, which is achieved
by moderating demand, expanding and diversifying
domestic energy supplies, and strengthening global
energy trade flows.
• In an effort to help meet energy or environmental
goals, some policymakers would suggest tax
structures that punish or reward politically selected
energy types, technologies or industries. Yet
these arbitrary and discriminatory structures add
considerable investment risks, inhibit efficient and
economic solutions and therefore harm consumers,
taxpayers and investors over the long term.
• Fuel subsidies, common in the developing world, also
serve as a barrier – in this case to the efficient use of
energy. By shielding consumers from the true cost of
their energy usage, fuel subsidies discourage energy
efficiency and interfere with the market’s natural ability
to slow consumption as the price of a commodity rises.
Nations must put in place policies that prevent
the creation of barriers to the development of
energy resources. Policies should encourage new
technologies, resist resource nationalism, promote
free trade and facilitate investment in the infrastructure
necessary to bring supplies to consumers.
39
40
managing long-term climate risks

The Outlook for Energy: A View to 2030 41

Rising greenhouse-gas emissions pose significant risks to
society and ecosystems. Since most of these emissions
are energy-related, any integrated approach to meeting
the world’s growing energy needs over the coming
decades must incorporate strategies to address the risk
of climate change.
What follows is an overview of recent findings, with a focus
on studies of international policy aimed at controlling long-
term climate risks. Implementing climate policies such as
these would have a dramatic effect on energy investment –
and energy costs – over the coming decades.
the fourth assessment report
The Fourth Assessment Report (AR4) of the
Intergovernmental Panel on Climate Change (IPCC 2007)
provides a recent update of scientific understanding
regarding GHG emissions, global warming and the risks
of climate change, and the way changes could unfold in
the future. Emissions scenarios and results from climate
models (see Figure 1) estimate that, without policy
intervention, temperatures could increase 1 to 5 º C
by 2100.
Figure 1
projected climate response to IPCC emissions scenarios
global surface warming o C
5
Projected Climate Response
to IPCC Emissions Scenarios
4
3
2
1 and would require a revolutionary transformation of
Historical Data
0 the global energy system from one based on existing
-1
1900 1950 2000 2050
Figure 1. Combining results from both emissions scenarios and climate
models, the colored lines show projected warming from 2000 through
2100 for a range of scenarios. The colored bars indicate the range of
warming for each scenario resulting from the uncertainty of converting
emissions to global temperature change. The blue line shows historical
changes over the past century. (IPCC 2007)
42
The IPCC also examined a number of stabilization
scenarios in which global emissions grow more slowly,
peak and then decline in coming decades. In these
scenarios GHG concentrations and projected warming
stabilize at levels lower than would be expected without
policy intervention. Stabilization scenarios rely on policies
that place added costs on GHG emissions to reduce future
energy use and stimulate the deployment of more efficient
technologies. Scenarios resulting in lower concentrations
result in reduced climate risks, but, as described below,
they require stronger policy intervention.
GHG stabilization in the policy debate
In recognition that GHG concentrations influence
long-term risks from climate change, the climate policy
debate has shifted from a focus primarily on targets to
limit near-term emissions to also include consideration
of long-term emissions pathways that ultimately stabilize
GHG concentrations.
stabilization: the scope of the challenge
Stabilization poses a significant challenge, especially for
CO2, the most significant of the GHGs emitted by human
activities. Atmospheric CO2 interacts with the biosphere
and oceans such that CO2 remains in the atmosphere for
many decades and accumulates today at about one-half
the rate of emissions.
Reducing CO2 emissions to nearly zero, as required to
achieve stabilization, represents an enormous challenge
technologies that utilize fossil fuels (oil, gas and coal) to
2100
one that is essentially emissions-free. This transformation
would require contributions not only from enhanced energy
efficiency and more widespread use of existing renewable
energy sources but also from the development and global
deployment of innovative technologies for energy supply
and end use.
The International Energy Agency recently published Figure 2
its analysis of the effort required to reduce global CO2 annual global emissions of CO2 from fossil fuels and other industrial sources
emissions by 50 percent from today’s levels by 2050. The emissions GtCO2 /year
100
Reference Developed Countries
IEA notes, “These objectives cannot be reached without Reference Developing Countries
Stabilize 550 ppm
80
unprecedented technological change and deployment, in Stabilize 450 ppm

all aspects of energy production and use.” It estimates that 60

the effort would require $45 trillion in additional investment 40

in energy through 2050 and would depend on successful
20
innovation to commercialize technologies (such as carbon
capture and storage and advanced biofuels) still under 0
2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100
development. In the electric power sector alone, the IEA
cataloged annual deployment needs, including 24 to 32 Figure 2. Areas show projected global emissions from developed
1,000-MW nuclear power plants, 30 to 35 500-MW coal- countries and from developing countries. The dashed lines show
global emissions required to be on track to stabilize atmospheric CO2
fired power plants with carbon capture and storage, and
concentrations at 450 and 550 parts per million. (MIT Model results
3,000 to 14,000 4-MW onshore wind turbines plus 800 reported in Scenarios of Greenhouse Gas Emissions and Atmospheric
to 3,800 4-MW offshore wind turbines. Concentrations, DOE 2007)

Adding to the challenge, the pace of transformation would
need to occur on an accelerated basis in the next few
decades to meet the targets proposed by the European
Union and some others. This would require rapid, successful
development and deployment of new technologies as well
as retirement of existing still-productive capital assets.
stabilization: a global challenge
There is growing recognition that addressing the risk of
climate change will require significant efforts by both the
developed and the developing world. A recent study
sponsored by the U.S. Department of Energy, entitled
Scenarios of Greenhouse Gas Emissions and Atmospheric
Concentrations (2007), provides a clear picture of
this challenge.
Figure 2 also shows pathways for global emissions that
would stabilize atmospheric CO2 at about 450 and 550
parts per million (ppm), levels consistent with targets
under discussion in many policy proposals. Without such
policies, CO2 emissions from developing countries alone
would exceed those on the 550-ppm pathway shortly
before 2040. For the more ambitious 450-ppm pathway,
emissions from developing countries would exceed
stabilization levels soon after 2020. These results reinforce
the importance of ongoing international negotiations to
find approaches that will engage all countries in actions
to reduce emissions.

The Massachusetts Institute of Technology (MIT) was

one of the contributors to the study. Figure 2 shows its
estimates of annual CO2 emissions in both the developing
and developed world if no policy changes are made. Over
the century, annual global emissions rise from about 30
gigatons of CO2 today to nearly 90 in 2100.

The Outlook for Energy: A View to 2030 43

stabilization: the cost to deploy new
technology
There has been extensive international focus on the costs
and benefits of policies to reduce GHG emissions and
address the risk of climate change. New technologies will
be required to make deep reductions in GHG emissions,
and the cost of these new technologies is not known
at this time. Of course, the overall cost will also depend
on the policy framework, especially the extent of global
participation. The DOE study, Scenarios of Greenhouse Gas
Emissions and Atmospheric Concentrations, examined what
costs for CO2 emissions would be necessary to achieve
several stabilization scenarios. Figure 3 shows the CO2
emissions costs over time that were developed by MIT for
the DOE study. CO2 costs depend on a number of factors,
including assumptions about the cost and availability of
future technologies to reduce emissions. Along each
stabilization pathway, costs rise with time, and costs are
greater for lower, more stringent targets. For reference, a
cost of $100 per metric ton of CO2 would be equivalent
to adding about $40 per barrel to the cost of oil, or about
$0.92 per gallon of gasoline. Costs for stabilization at
450 ppm are significantly higher because the transition
to low-emissions technologies must occur very quickly.
Figure 3
CO2 stabilization scenarios
CO2 cost ($/tCO2)
$500
450 ppm
550 ppm
$400 650 ppm
750 ppm
$300
$200
$100
$0
2020 2040 2060 2080 2100
Figure 3. Projected CO2 costs per metric ton of emissions through 2100
for a range of stabilization scenarios. Models derive the cost required
to induce changes in behavior and technology that reduce emissions
sufficiently to stabilize atmospheric CO2 concentrations at the indicated
levels (in parts per million). (MIT Model results reported in Scenarios of
Greenhouse Gas Emissions and Atmospheric Concentrations, DOE 2007)
44
The DOE stabilization study involved three research teams,
each using different modeling approaches and technology
assumptions. Their estimates for CO2 costs (along each
trajectory) differ by factors of three to 10. This wide range
in cost estimates for CO2 reductions poses special
challenges for policymakers.
Overall, achieving stabilization of CO2 at levels in the
range of 450 to 550 ppm will require research and
development breakthroughs to improve the performance
and lower the cost of innovative technologies. In addition,
stabilization will require unprecedented international
cooperation to encourage deployment of new technologies
with lower emissions.
ExxonMobil’s views on managing
long-term risk from climate change
The recent IPCC AR4 Report concluded that the risks to
society and ecosystems from increases in GHG emissions
are significant. ExxonMobil believes that it is prudent to
develop and implement strategies that address these risks,
keeping in mind the central importance of energy to the
economies of the world.
Effective strategies must include putting policies in place
that start the world on a path to reduce emissions while
recognizing that addressing GHG emissions is one
among other important world priorities, such as economic
development, poverty eradication and public health.
While pursuing the long-term objective to minimize risks,
near-term objectives should include the following:
• promoting energy efficiency,
• deploying existing technologies that reduce
greenhouse-gas emissions cost-effectively,
• supporting research and development of new
low-emissions technologies, and
• supporting climate research to help inform the
ongoing policy response.
Throughout the world, national and regional policymakers
are considering a variety of legislative and regulatory
options to mitigate GHG emissions. In our view, assessing
these options requires an understanding of their likely
effectiveness, scale and cost, as well as their implications
for economic growth and quality of life. Within ExxonMobil,
we analyze and compare the various policy options
by evaluating the degree to which they accomplish
the following:
references for managing long-term climate
risks section
Scenarios of Greenhouse Gas Emissions and Atmospheric Concentrations
(2007). U.S. Climate Change Science Program Synthesis and Assessment
Product 2.1a.
www.climatescience.gov/Library/sap/sap2-1/finalreport/
Climate Change 2007: Synthesis Report. Intergovernmental Panel on
Climate Change Fourth Assessment Report (AR4).
www.ipcc.ch/ipccreports/ar4-syr.htm

Energy Technology Perspectives (2008) Scenarios and Strategies to 2050.

• Ensure that any cost of carbon is uniform and International Energy Agency (OECD/IEA 2008).
predictable across the economy www.iea.org/G8/2008/ETP_2008_Exec_Sum_English.pdf

• Let market prices drive the selection of solutions

• Promote global participation

– Consider priorities of the developing world

– Recognize the impacts of imbalances among

national policies

• Minimize complexity to reduce

administrative costs

• Maximize transparency to companies and

consumers

• Adjust in the future to developments

in climate science and the economic
impacts of climate policies

In light of the discussion of stabilization as

an approach to address long-term risks,
ExxonMobil believes that it is essential to
implement policies with the lowest overall
cost to society. In particular, this requires
economy-wide, predictable costs to shape
business plans and investment over many
decades, including not only investments in
equipment and infrastructure but also investments
in research and development. Global participation
will be essential not only to reduce the significant
costs but even to achieve some levels of risk reduction.

The Outlook for Energy: A View to 2030 45

ExxonMobil’s actions to reduce emissions from our operations

ExxonMobil has systematically worked to improve efficiency
and environmental performance throughout our facilities
worldwide. Since 2004, ExxonMobil has invested more than
$1.5 billion in activities that improve energy efficiency and
reduce greenhouse-gas emissions, and we expect to spend
at least half a billion dollars on additional initiatives over the
next few years.
Through the efficiency actions implemented in 2006 and
2007, ExxonMobil has reduced its greenhouse-gas emissions
by about 5 million metric tons in 2007, which is equivalent to
removing about 1 million cars from U.S. roads.
commercialization projects that will help reduce the routine
flaring of natural gas that is a byproduct of oil production.
ExxonMobil is working to reduce emissions of other gases
besides CO2. Through new technologies, investments and
practices, we have reduced emissions of sulfur dioxide,
nitrogen oxides and volatile organic compounds from our
operations worldwide by about 23 percent from 2003 levels.
Reducing these emissions limits local and regional air
pollution, and through their influence on ozone, also affects
greenhouse-gas concentrations.

Since the launch of our Global Energy

Management System (GEMS) in 2000,
we have identified steps to improve energy
efficiency at our refineries and chemical
plants by 15 percent to 20 percent, and
we already have implemented more than
half of these improvements. We have
improved the energy efficiency of these
businesses at a rate two to three times
faster than the industry average.

cogeneration. One way that ExxonMobil

has improved the efficiency of its
operations – and reduced its own
energy costs – is through its investments
in cogeneration. With cogeneration,
ExxonMobil can produce electricity to
power its operations while also capturing
heat to make the steam that is needed
to transform raw materials into
consumer products.

flaring. ExxonMobil is the world’s largest

refiner. At our refineries, we are working
to reduce emissions from flaring – the
burning of gases that are generated mainly
as a result of maintenance or unexpected
operating events. By following best
practices and putting tighter controls in
place, ExxonMobil reduced flaring at our
refineries by more than 15 percent in 2007.

In addition to reducing flaring at our

refineries, ExxonMobil is spending more
than $4 billion in natural gas utilization and

ExxonMobil scientists and researchers are studying

new technologies and energy systems to lower
greenhouse-gas emissions.

46
ExxonMobil shares the same concerns as people
everywhere – how to provide the world with the energy
it needs while also reducing greenhouse-gas emissions.
Successfully reducing emissions at our operations is one
step that ExxonMobil is taking toward this goal. We also
are helping consumers reduce emissions, participating in
constructive dialogue on policy options and supporting
research in technology breakthroughs.
support for academic research to
reduce emissions
ExxonMobil has undertaken research on issues associated
with the risk of climate change for more than 25 years,
and our work has produced more than 40 papers in
peer-reviewed literature.
Our scientists serve on the United Nations Intergovernmental
Panel on Climate Change and numerous related
scientific bodies.
In addition, ExxonMobil has supported major projects at such
institutions as the Massachusetts Institute of Technology,
Stanford University, the Australian Bureau of Agricultural and
Resource Economics, Battelle Pacific Northwest Laboratory,
Princeton University, Charles River Associates, the Hadley
Centre for Climate Prediction, the International Energy
Agency Greenhouse Gas R & D Programme, Yale University,
the University of Texas, Carnegie Mellon University and the
Lamont Doherty Earth Observatory at Columbia University.
The Outlook for Energy: A View to 2030
Global Climate and Energy Project
One major project is
the Global Climate
and Energy Project
(GCEP) at Stanford
University. Launched
in December 2002
by ExxonMobil,
General Electric,
Schlumberger and Toyota, GCEP performs fundamental
scientific research to establish a foundation for new
technologies. Over the course of the Project, the sponsors will
invest $225 million at Stanford and other leading institutions
around the world to build a wide-ranging portfolio of research.
In the decades ahead, scientists and companies will use
the Project’s findings to develop global energy systems with
significantly lower greenhouse-gas emissions, including the
key areas of electric power and transportation.
Some of the technologies being researched at GCEP include
the following:
• Lowering the cost and/or increasing efficiency of solar
photovoltaic devices
• Studies of fuel cells and bioelectric conversion of energy
• Increasing the energy capacity of lithium-ion batteries for
applications in vehicles
• Thermodynamic principles for designing engines that
produce higher efficiency and lower emissions
• Pathways to produce biodiesel fuel from bacteria to
achieve a twentyfold increase in energy yield
• Increasing knowledge of hydrogen bonding to create new
strategies for using hydrogen to power vehicles
Many of the technologies being developed at GCEP are years,
perhaps decades, away from widespread adoption. But the
promises they hold for reducing energy demand and reducing
carbon-dioxide emissions are driving research forward.
47
48
conclusion
ExxonMobil prepares its Outlook for Energy each year in
order to better understand – and prepare for – the forces
that shape our world and its energy needs. Several trends
through 2030 are clear: Populations and economies are
expanding, and while improvements in energy efficiency
and a shift toward cleaner-burning fuels will be evident,
energy demand and carbon-dioxide emissions will
continue to rise.
The Outlook for Energy: A View to 2030
With much of the future energy landscape unpredictable,
managing risk is more important than ever. Today, the
supply of and demand for energy is growing more
dispersed, more diverse and more complex than at any
other time in history. Markets are called upon to distill an
increasing mix of global and local supply and demand
issues, thereby helping to balance diverse energy needs
quickly and efficiently. Meeting growing energy demand
will require navigating a host of risks – commercial,
technological, political and regulatory – as well as those
associated with increased greenhouse-gas emissions.
49
ExxonMobil’s approach to managing risk
ExxonMobil’s core values are centered on a disciplined
long-term approach to investment and a focus on operational
and technical excellence.
Consistent application of these values, which are shared by
all of our more than 80,000 employees, form the bedrock of
our business strategy and are the reason why ExxonMobil has
consistently delivered industry-leading returns and superior
cash flow through a variety of market conditions.
In addition, ExxonMobil’s business portfolio and level of
global integration are unique in the industry. Our portfolio of
assets provides advantages in scale, geographic diversity and
business mix, and mitigates risks that arise from changes in
commodity prices and business cycles.
investment discipline
The energy industry is a long-term business that requires
decisions to be made with a time horizon that is measured in
decades rather than months or years. We have a responsibility
to our shareholders to ensure that each investment decision is
made using a disciplined approach.
Our proven project management system incorporates best
practices developed around the world. Emphasis on the early
phases of concept selection and project execution results in
investments that maximize resource and asset value.
Projects are tested over a range of economic, political and
regulatory scenarios to ensure that they are robust in a variety
of business environments. Post-investment, we complete a
rigorous appraisal of major projects and incorporate learnings
into future project planning and design. This approach ensures
superior investment returns throughout the business cycle.
operational excellence
The same exacting standards that ExxonMobil applies to its
investment decisions also are applied to the management of
our global operations. ExxonMobil achieves this through a
wide range of proven management systems. These processes
have earned ExxonMobil an industry-leading reputation for
project execution and appraisal.
50
ExxonMobil is improving operating reliability through our
Global Reliability System. This program has reduced the
downtime of our refining units by 40 percent from 2006
through 2008.
And ExxonMobil has achieved industry-leading gains in
energy efficiency through its Global Energy Management
System (GEMS), which uses international best practices
and benchmarking techniques to identify energy-efficiency
opportunities at all our facilities. ExxonMobil is a major
consumer of energy, so improving energy efficiency helps
both the environment and our bottom line.
Other management systems include:
• Standards of Business Conduct. These standards –
which consist of 16 foundation policies and related
procedures – provide the framework for ethical business
practices for ExxonMobil employees around the world.
• Financial controls. ExxonMobil’s System of
Management Control defines the principles, concepts
and standards for financial authority across the company.
Our Control Integrity Management System (CIMS)
provides the processes and tools for compliance.
• Safety, Health and Environment. Our Operations
Integrity Management System (OIMS) provides a
disciplined framework for managing our company’s
performance in the areas of safety, health, security
and environment. This system, which is used at every
ExxonMobil facility, enables us to track experiences,
measure progress, plan future improvements and ensure
management accountability.
• Environmental Business Planning. ExxonMobil
integrates environmental improvement activities into
annual operating plans at each of our facilities and
businesses. This process, called Environmental Business
Planning, includes assessment of potential regulatory
changes and systemic management of any consequent
business impacts.
The year 2030 might seem a long time from now. But today’s
increasingly large energy projects can take decades from
planning to completion. Therefore, the world’s ability to meet
the energy-demand growth outlined in ExxonMobil’s Outlook
for Energy will rely on the investment decisions being
made today.
ExxonMobil believes its shareholders as well as consumers
will be well-served by continuing to focus on operational
and technical excellence, prudent risk management and
responsible business behavior.
Energy is a uniquely complex industry. Like no other
commodity, energy touches every aspect of modern life –
powering everything from daily basics like electricity,
heat and transportation to advanced applications for
computing, medicine and industry. Petroleum produces
the chemicals that make a range of common products
like plastics and polyester.
In light of this complexity, it is not surprising that energy
generates so much interest from so many parties. Energy
matters to everyone, especially at times when energy
prices are high. ExxonMobil welcomes increased public
awareness of global energy challenges.
Given the enormous scale of the energy industry and the
critical need to ensure affordable and reliable supplies for
the long term, it is essential to base all policy discussions
and recommendations on a transparent description of
facts, assumptions and analyses. Debate must be guided
by an accurate understanding of the current and likely
contribution of various energy sources, and the way in
which policy approaches can alter this energy mix.
Our Outlook for Energy outlines the projections for energy
supply and demand through 2030. This year’s special
section, “The Energy Imperative,” describes how, given
those projections to 2030, we can most effectively meet
our energy and environmental challenges.
Given the scale of the challenge, no single solution will
suffice. We must pursue an integrated set of solutions.
• To moderate demand, we must develop and deploy
technologies that improve energy efficiency in our
vehicles, homes and businesses.
• We must expand access to all economically
viable energy sources – oil, gas, coal, nuclear and
alternative and renewable sources such as wind, solar
and biofuels.
• We must mitigate CO2 emissions through technologies
that advance energy efficiency, alternative and
renewable energy, and strategies for capturing
carbon emissions.
The Outlook for Energy: A View to 2030
Just as there is no single solution, there is no single
company, nation or technology that can meet our energy
challenges. Success will require the increasing attention
and effort of all the world’s energy consumers and
producers in pursuit of a more secure and prosperous
world. Many of the same companies that produce today’s
oil and gas are advancing technologies that reduce CO2
emissions. Technologies developed by one country to
grow its domestic energy supplies can be used to improve
energy supplies in other nations.
Oil prices in the second half of 2008 were much lower
than the record highs set in the first half of the year. Yet
that drop in prices does not reduce the urgency of the
need to take action now to meet the challenges of
long-term energy security, economic growth and
environmental protection.
To meet increasing demand, we must proceed wisely yet
with a confidence that reflects tremendous progress in
overcoming challenges of the past. Meeting the world’s
energy challenges means helping billions of people raise
their living standards, and it means growing the world’s
economies. The credit crisis that hit world markets in the
second half of 2008 has shaken investor confidence and
damaged the health of the world’s economies. Yet the
energy industry remains committed to investing in the
energy that fuels economies and creates jobs – and will
play an important role in helping the global economy in
the future.
Looking to 2030 and beyond, ExxonMobil realizes that the
scale of our global challenge is enormous, but so too is
our commitment to succeed and our capacity to innovate.
ExxonMobil is confident that by pursuing this integrated
set of solutions – and creating the political and fiscal
environment for these solutions to thrive – the world can
achieve both energy and environmental security.
51
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www.exxonmobil.com
December 2008
9 Printed entirely on recycled paper