Like many such Oil Drum articles, there are a lot of graphs, and a lot of words. I did not read it closely, and I may have misinterpreted the author's conclusions.
But I agree with what I think the author said: the author's bottom line -- XOM's rosy projections for the future are just that: a bit too rosy. XOM says there should be no problem meeting the energy needs in 2040. The author of The Oil Drum article is not so sure.
Early in the article:
By 2040, XOM anticipates that the global population will be approaching nine billion, up by around 25% from current numbers. Of that nearly two billion additional folk most are expected to be born in the developing countries such as India and in Africa, with the former gaining 300 million and the latter 800 million.
Because the majority of the growth occurs in these countries, and the improvement in living standards and working conditions are more energy intensive, (whether air conditioning or iPhones) from a lower base and demand growth is concentrated more in electrical energy demand than that of transportation fuels.Figure 4 at the linked article is a bit strange, especially considering it comes from XOM. The graph is titled: "Industrial Energy Demand by Fuel." These are the six fuels compared, from 2000 to 2040: electricity, market heat, renewables, coal, gas, and oil. (By the way, eliminate "market heat" -- it's inconsequential; one could almost eliminate renewable energy also -- it comprises such a small percent, and the percent changes almost not at all between 2020 and 2040.)
So, back to Figure 4 and the six "fuels." What do you find strange about the breakdown? Yes, "electricity." There is no such thing as "electricity" as a fuel -- it come from something else. Also, note that "nuclear" is missing. Even the author of the article noted that discrepancy:
The report breaks down the growth in demand into several sectors. And this, at first, is a little irritating. The reason is that in describing, for example, the growth in residential/commercial energy demand, the track-back on the power sources stops at the point where electric current comes out of the wall. Given that it is the growth in electricity consumption, projected to grow overall by 85%, that is the greatest contributor over the period this is a little disingenuous. Now it is true that there is a whole section devoted to electricity generation, but the lack of the source fuel portrays a little bit of sleight of hand.Later on, XOM does address this "sleight of hand," when it discusses the source of electricity. The narrative states that the use of coal will decline:
EM anticipate that coal will continue to gain market until 2025, but from that point forward its share will decline as the main competitors, renewables, nuclear and natural gas take an increasing part of the supply.The narrative states that the use of coal will decline but the graph is worth a thousand words: the use of coal might decline, but it is almost imperceptible. Whatever decrease in coal use there is, it is offset mostly by natural gas; nuclear to some extent; and, renewable hardly at all. It's really natural gas that makes up the largest growth/demand.
XOM explains the change from coal to natural gas:
One of the reasons for the change, particularly the change to natural gas from coal, comes with the increasing burden of carbon costs, as XOM projects.The linked article does not explain what is meant by "increasing burden of carbon costs." If we are talking about "global warming carbon costs, carbon taxes, etc" that's a huge assumption. The Kyoto Protocol gave the emerging companies a pass on global warming carbon costs, and in 2040, if there are shooting wars over access to energy (oil and natural gas), it doesn't take a Steven Chu to tell us that countries who wage war for energy, won't be willing to pay Algore carbon taxes.
Back to transportation energy demands.
XOM project that overall the demand for liquid fuels will rise to 113 million barrels of oil equivalent (mboe) per day by 2040, a 30% growth over 2010 with most of the demand remaining with the transportation needs. The company seems comfortable with industry being able to achieve that level of supply, although the mix will change considerably from that which currently prevails.
- In 2010, daily global demand: 88 million boe
- In 2040, projected, daily global demand: 113 million boe
And then this at the linked article:
And it is here, I fear, that the report becomes overly optimistic. By looking at the relative size of the remaining resource, relative to the production achieved to date, XOM foresee no problem in providing the supply targets that are shown in the above figure. XOM expect that technical innovation will continue to dramatically improve production from the United States and North America in total. Supply growth is anticipated from tight oil in places such as the Bakken, Deepwater from the Gulf and the tar sands. They project that these will combine to lift North American total liquids production by another 40%. When the production from the offshore Brazilian fields and the heavy oil sands of Venezuela are added, then this reinforces the view that they hold of an achievable target.I agree completely: "here is where the report becomes overly optimistic."
Back to the linked article:
Yet it is in the Middle East, a region they hardly discuss, that they see the largest growth. XOM don’t actually say where that great growth is likely to come from, but it is very likely heavily weighted towards the most optimistic of estimates for the future production of Iraq, with the ongoing turmoil of the “Arab Spring” being totally discounted."Arab Spring" is the least of "their" problems. Iraq, maybe. [By the way, and I digress, if President George W. Bush saw the same thing -- remember when Bush was president, there was no Bakken and there was no fracking revolution -- it explains why he was willing to go to war to rid Iraq of a Saddam family dynasty that might extend into 2040.] In fact, to a large extent, the Mideast is Saudi Arabia. Saudi's energy demand is increasing, so much that that it is actually installing huge solar farms. As Saudi's energy demand increases, it makes it less likely for them to increase exports.
A nice article to read at the link. Bottom line for me: I think it's going to be a bit more difficult than XOM suggests to get form 88 million boe to 113 million boe over the next twenty years. If "we" get there, it won't be cheap.