Every year, ExxonMobil publishes its Global Outlook, detailing the company’s view of what the future is likely to hold for oil, natural gas and other forms of energy. The key findings in the company’s 2024 Global Outlook released Monday are as follows:
- All energy types will remain in the mix.
- Renewables will grow the fastest.
- Coal will decline the most.
- Under any credible scenario, oil and natural gas remain essential.
- Lower-carbon technology needs policy support to grow rapidly but ultimately must be supported by market forces.
If any of those conclusions surprise you, you probably harbor unrealistic expectations about what is likely to happen from now through 2050 in the global energy space. While some, including the energy transition boosters at the International Energy Agency (IEA) will take issue with finding 4, it is the unavoidable reality expressed in finding 5 that ensures oil and natural gas will remain essential throughout the foreseeable future, and likely beyond.
Indeed, where demand for crude oil is concerned, ExxonMobil projects that it will reach a plateau sometime beyond 2030 and will remain at more than 100 million barrels per day through at least 2050. That 2050 demand projection is double the projection recently published by the IEA.
ExxonMobil points to this conflict in forecasts by pointing out that, “Unlike the company’s Outlook, which is a projection, many scenarios, such as International Energy Agency’s Net Zero Emissions (IEA NZE) by 2050, work backward from a hypothetical outcome to identify the factors needed to achieve that outcome. It is important to note that the IEA acknowledges that society is not on a net-zero pathway.”
Therein lies the rub: The world community is already far behind the pace of transition required to meet the lofty net-zero emissions goals by 2050 and falls further behind with every passing day. This faltering pace of transition is likely to continue to worsen until truly reliable, affordable and scalable alternatives are devised to displace wind and solar power and electric vehicles as the heavily subsidized rent-seeking industries of choice by the transition’s proponents in and out of government.
The faltering market for electric vehicles in the western world is already forcing companies like Ford to reassess its investments in that technology. Ford announced last week that is cancelling plans to introduce a new 3-row electric SUV and will likely be forced to take a $1.9 billion in special charges and write-downs as it continues to refocus its efforts to introduction of a new line of hybrid model cars instead.
General Motors has also issued a series of announcements delaying EV investments.
The reassessment by these and other automakers has been forced by a dramatic slowing of growth in U.S. consumer demand for the cars. A market that expanded by almost 50% in 2023 grew by only 6% in the first half of 2024 and shows little sign of resuscitation. But hybrid models remain popular, and sales have grown by almost double the pace of pure EVs in 2024.
While the Biden administration’s harsh new tailpipe emissions standards and mileage requirements are designed to force a transition to EVs, these big corporations still must remain profitable to keep producing cars of any type. It seems likely that a market unwilling to conform itself to government edicts will ultimately force the government edicts to change.
That reality, of course, takes us back to ExxonMobil’s finding 5. Technologies that ultimately cannot manage to obtain support by market forces are doomed to fail in any free society. Sadly, we now see governments in European nations like the United Kingdom, Germany and France moving towards more authoritarian forms of rule to better force reluctant masses to comply.
The Biden-Harris administration has not moved quite so aggressively in that direction, but the signs of a desire to do so are certainly there. ExxonMobil’s projection of strong crude oil demand through 2050 is, when viewed through this lens, a tacit endorsement of freedom and markets prevailing in the end.
David Blackmon is an energy writer and consultant based in Texas. He spent 40 years in the oil and gas business, where he specialized in public policy and communications.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation.
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