Global demand for natural gas will rise more than 20% by 2050 from last year’s level, as it displaces coal to power industries and meet higher electricity use in developing countries, Exxon Mobil said on Thursday in an annual outlook.
The projections provide the basis for the top U.S. oil producer’s long-term strategy and investment. Exxon has ambitious growth plans compared to other global oil players, with a target to boost production by 18% over the next five years.
Global oil demand will plateau after 2030 but remain above 100 million barrels per day through 2050, Exxon projected, consistent with its previous outlook.
Oil and natural gas will account for 55% of the global energy mix in 25 years’ time, down 1 percentage point from 2024 levels, the company said.
The industrial sector will drive increased demand for natural gas as it replaces coal, Exxon’s economics, energy and strategic planning director Chris Birdsall said in a press briefing.
“It’s a great way to provide the industrial (power) that’s needed, but at the same time reduce some of the emissions challenges with coal,” he said.
Even as overall crude oil demand is expected to remain stable, Exxon forecasts that longer-term demand for gasoline will shrink 25% as electric vehicles proliferate, while demand for distillates will remain strong for commercial transportation and aviation.
Refineries will have to adapt to the changing mix over time, Birdsall said.
Exxon said more work is needed to reach the United Nation’s 2050 emissions goal in order to limit global temperature increases.
The company sees global carbon dioxide emissions falling to 27 billion metric tons in 2050, down about 25% from today’s levels but still more than twice what the international body wants to see.
The world’s ability to reduce carbon emissions will depend on making technology and solutions more affordable, Exxon said, calling for public policy that avoids energy price spikes and supply constraints.
(Reporting by Sheila Dang in Houston; Editing by Nathan Crooks and Sonali Paul)