Exxon Sees Global Crude Demand Plunging by 2040

Exxon Sees Global Crude Demand Plunging by 2040Exxon Sees Global Crude Demand Plunging by 2040

Exxon Mobil Corp said on Friday that it expects global oil demand to drop sharply by 2040, if regulations aimed at limiting the impact of greenhouse gas emissions on climate are fully implemented.

Under this scenario, Exxon projected world oil consumption will drop 0.4% annually to 2040 to about 78 million barrels per day. That is about 25% below current levels, which the US Energy Information Administration puts at 98 million bpd, Reuters reported.

The findings were contained in a report produced after Exxon’s shareholders supported a climate-impact resolution last year and Exxon’s board approved a plan to analyze the effects.

Exxon’s climate-impact report comes roughly three years after almost 200 nations met in Paris to set a goal of limiting the rise in the world’s average surface temperatures.

US President Donald Trump has since pulled the United States out of the Paris climate accord and it was unclear whether Paris accord policies would be fully implemented around the world.

The study added weight to arguments that laws and regulations to limit the rise in global temperatures to below 2 degrees Celsius from pre-industrial levels will succeed in curbing fossil fuel consumption.

But Exxon stopped short of laying out how efforts to limit carbon emissions could impact its business, data long sought by some shareholders.

In a separate report published on Friday that did not take into account climate legislation, Exxon forecast population growth will drive oil demand higher by about 20% by 2040.

Exxon’s study saw demand for natural gas, considered a cleaner-burning fuel than oil, growing 0.5% per year to about 445 billion cubic feet per day under the same scenario.

Demand for power generated by solar panels, wind turbines and other renewable sources is expected to rise 4.5% annually through 2040 under this scenario, Exxon said.

The report followed years of pressure by investors and environmental activists urging the company to describe the potential impact of global warming on its operations. Last year, their climate-impact resolution was backed by 62% of shares voted at Exxon’s annual meeting.

The report came the same day that Exxon posted quarterly results that disappointed Wall Street, sending its shares down more than 5%.

While sponsors of the shareholder resolution applauded Exxon on Friday for being more transparent than in years past, there was still frustration that the company did not disclose how climate policies would affect its finances.

Add new comment

Read our comment policy before posting your viewpoints