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Energy supply

What resources will be available to meet the world’s increasing demand for more energy? Technology advancements underpin the diversification of energy choices. 

Energy supply projections

The supply mix to meet growing energy demand will be historically diverse – from the oil and natural gas in America’s shale regions, to the deepwater fields off Brazil; from new nuclear reactors in China, to wind turbines and solar arrays in nations around the world.

This diversification in global energy supply will grow over the next two-and-a-half decades. Society’s push for lower-emission energy sources will drive substantial increases in renewables such as wind and solar. By 2040, nuclear and all renewables will be approaching 25 percent of global energy supplies.

Oil grows and continues to be the primary source of energy for transportation and as a feedstock for chemicals. Natural gas also grows, with increasing use in power generation, as utilities look to switch to lower-emissions fuels. Coal struggles to grow due to increased competition in power generation from renewables and natural gas, led by declines in OECD nations.

Energy supply evolves to meet diverse demand

Liquids supply projections

Liquids demand is expected to grow by about 20 percent over the next two-and-a-half decades, driven by the transportation and chemicals sectors.

To meet the demand, supply growth will come from diverse sources, with technology advancements a key enabler. Technology enables growth in supply from tight oil and natural gas liquids, together reaching nearly 30 percent of global supply by 2040. Combined with growth in oil sands, energy markets shift, and North America becomes a net exporter.

Liquids demands driven by transportation and chemicals

Liquids supply highlights technology gains

Liquids supply highlights regional diversity

Liquids demand and supply warrant investment

Technology expands recoverable resources

Natural gas projections

It is not surprising that natural gas grows more than any other energy source when one considers its abundance, convenience and many uses: home heating, fertilizer feedstock, delivery truck fuel and flexible, reliable electricity generation, just to name a few. Global natural gas demand grows by about 40 percent, as its share of the world’s energy mix rises from 23 percent to 26 percent between 2016 and 2040. As a lower carbon alternative to coal, natural gas also plays a key role in the pathway to lower CO2 emissions.

Natural gas resources are geographically and geologically diverse. Technologies, such as horizontal drilling and hydraulic fracturing, have unlocked vast unconventional resources, which have dramatically altered the natural gas supply landscape in the past decade, particularly for North America. Unconventional gas will continue to play a significant role, contributing more than half of the growth in natural gas supply to 2040.

Trade is critical to move natural gas to where consumers need it. Liquefied natural gas is well-suited to transport natural gas over long distances where pipelines are impractical. Liquefied natural gas trade will meet one-third of demand growth to 2040.

Natural gas competes in every sector

Natural gas meets an increasing share of world demand

Natural gas supply highlights regional diversity in meeting demand

Europe and Asia Pacific dominate LNG imports

Abundant natural gas supplies underpin new LNG exports

Technology expands recoverable resources

Test uncertainty projections

Demand for liquid fuels is projected to grow by about 20 percent through the Outlook period, driven primarily by commercial transportation and chemicals demand. Liquds demand from light-duty transportation peaks and declines with more efficient vehicles, even as personal mobility continues to rise.

Uncertainties in government policies and the pace of market penetration of various technologies could have a material impact on light-duty transport sector demand. To assess the magnitude of this uncertainty, we developed a hypothetical sensitivity to illustrate the impact of all light-duty liquids demand being replaced by electricity by 2040.

To achieve this, global sales of light-duty vehicles would likely need to be 100 percent all-electric starting in 2025. This would require sales of about 110 million electric vehicles starting in 2025, rising to about 140 million in 2040 – more than 100 times the number of electric vehicles sold in 2016. Battery manufacturing capacity for electric cars would need to increase by more than 50 times from existing levels by 2025 under this hypothetical case.

Liquids demand by sector

Electricity demand, Demand increase

Energy-related CO2 emissions

Natural gas demand increases