Even in a low carbon future, oil major says trillions of dollars of investment will be needed in fresh production to meet coming demand
EXXONMOBIL says there is little risk that climate change policies will force it to leave its proved reserves of oil and gas in the ground.
The announcement follows shareholder demand last year that ExxonMobil discloses the impacts that technology advances and global climate change policies are expected to have on the company.
Having assessed a range of energy-use scenarios that would prevent global temperatures from rising 2oC above pre-industrial levels to 2040, ExxonMobil used the average of these assessed scenarios to consider the potential impact on energy demand.
Its 2018 Energy & Carbon Summary report finds that total energy demand increases 0.5% per year, with oil demand falling 0.4% per year, natural gas demand climbing 0.9%, coal down 2.4%, and renewables rising 4.5%.
These findings imply significant use of oil and natural gas through to the middle of the century and so ExxonMobil concludes that its 20bn bbl of proved reserves faces “little risk” of going undeveloped. It estimates that by 2040 more than 90% of these proved reserves will have been developed. While the remaining 10% may face more stringent climate policies, it concludes that operational knowledge gained in the meantime will likely still make these reserves economic to produce.
Furthermore, the company concludes that, assuming it retains its current share of global production, it will need to replenish around half of its 71bn bbl of non-proved resources by 2040.
“As a result of ongoing demand coupled with natural hydrocarbon field decline, trillions of dollars of additional investment in oil and gas production will be required, including to meet a 2oC pathway,” the company reports.
On how shifts in technology might impact demand for the company’s resources, TJ Wojnar, vice president for corporate strategic planning, said: “Our in-depth analysis shows that even if every light-duty vehicle in the world was fully electric by 2040, the demand for liquids could still be similar to levels seen in 2013.
“This is because of growing demand from commercial transportation and the chemical sector.”
This article is adapted from an earlier online version.
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