Is natural gas the fuel of the future?

Natural gas is poised to become an even more predominant fuel in the 21st century because the global economy is expanding and energy is a key driver in this economic success story.

This is especially true across large parts of Asia and China where, in a relatively short time, millions of people joined the ranks of the middle class. This economic expansion is igniting unprecedented consumption of energy as people are improving their households, health, safety, and being empowered to realize their potential. More and more of that energy is slated to come from natural gas, because it is a low-emission and versatile fuel capable of not only powering homes, but also utilities and transportation in the form of liquefied natural gas or compressed natural gas.

In a world characterized by increasing prosperity, growing energy use, and an expanding push to cut greenhouse gas emissions, natural gas will be one of the most important sources of energy to meet the needs of the future. Through a series of charts we show some of the economic and demographic trends that will drive demand for natural gas over the next quarter century.

Rising living standards means rising consumption

By 2040, world population is expected to reach 9.2 billion people, up from 7.4 billion today. Between 2014 and 2040 global GDP will more than double. Rising incomes means rising consumption as new members of the middle class require more energy to power applications from lighting, to home appliances, global e-commerce and digital services. All of these require energy to produce, transport and operate—energy that more and more will be supplied by natural gas.

Purchasing power expands + Unprecedented middle-class growth

The world will consume more energy

The need for safe, clean, reliable and affordable energy is expanding significantly. Even with substantial efficiency gains, global energy demand will likely increase nearly 25 percent by 2040, driven largely by developing nations. Renewable and nuclear energy will see strong growth, contributing close to 40 percent of incremental energy supplies to meet that demand growth. Oil and natural gas continue to supply about 55 percent of the world’s energy needs through 2040. Natural gas demand rises the most, largely to help meet increasing needs for electricity and support increasing industrial demand.

Demand Global energy mix shifts to lower carbon fuels

A new CO2 reality

The growing role for natural gas will help cut CO2 intensity in both industrialised economies and emerging markets. Longer term, the shift towards natural gas and other less-carbon-intensive energy types, combined with significant improvements in energy efficiency, will enable global energy-related CO2 emissions to peak around 2040. This will be a significant result, recognising that energy-related CO2 emissions rose more than 50 percent from 1990 to 2014.

Global energy demand varies by sector

Natural gas will be used to generate a greater percentage of electricity

By 2040 about 30 percent of the world’s electricity will be generated by natural gas. Motivating the shift are a number of factors, including: energy security, cost of fuel, and emissions concerns.

Natural gas supply highlights regional diversity in meeting demand
This article first appeared on the Energy Factor on June 9, 2016. To learn more about ExxonMobil’s predictions for the future of energy consumption and generation, view the ExxonMobil: The Outlook for Energy: A View to 2040 here.
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