Report Dec. 15, 2022
Delivering economic benefits
Energy and human development are inextricably linked. Access to affordable and reliable energy has brought enormous progress, enabling people to live longer, healthier lives. Yet billions still do not have reliable access to clean cooking fuel or electricity. As growing populations gain access to energy and increase their living standards, they will create the largest expansion of the global middle class in history. That means more demand for homes, transportation, electricity, consumer goods and the energy to power them.
Report Dec. 15, 2022
Energy is essential for human progress. Economic expansion and improving access to energy enable longer, more productive lives for the growing global population.
These fundamentals include energy supply and demand trends, the scale and variety of energy needs worldwide; capability, practicality and affordability of energy alternatives including lower-emission solutions; greenhouse gas emission-reduction technologies; and supportive government policies. The ExxonMobil Outlook for Energy (“Outlook”) considers these fundamentals to form the basis for long-term business planning, investment decisions, and research programs.
The Outlook reflects the Company’s view of global energy demand and supply through 2050. It is a projection based on current trends in technology, government policies, consumer preferences, geopolitics, and economic development.
Energy demand: three drivers
Policy. Technology. Consumer preferences. All three impact how the world uses energy. Each driver influences the other. The interplay among these can vary depending on local circumstances (available resources, public support) and can change over time. At ExxonMobil, we’re continually studying energy demand and developing models that measure its potential impact — all in an effort to gain a deeper understanding of the interconnectivity of the global energy system.
Deploying new technology enables people to do more with less. Most successful technologies often have the supporting policy and commercial frameworks to achieve scale. A policy, like tax incentives, can spur innovation to bring down costs of lower emission solutions needed for wide-spread adoption. The ultimate goal, however, is for these solutions to be cost effective enough that they do not require subsidies long term.
Sound government policy can stimulate new technology and influence consumer choices. For example, policies can encourage adoption of new technology (free parking for electric vehicles) or discourage the use of an existing technology (restrictions on coal-based power). The corollary is also true: policy not enabled by competitive technology or not aligned with consumer preferences can be difficult to implement because it is hard to mandate something that consumers believe is inferior to current options.
Demand for energy begins with the choices consumers make. These preferences can shift as new technology enables better options, such as lower costs and lower emissions. Consumer preferences can also be altered over time by policies that incentivize choices, like a carbon tax that encourages lower emissions electricity supply.
Energy – in all its forms – enables growth and prosperity. As economies grow, as technology advances, as consumers become more environmentally aware, and as policies adapt, global energy demand will evolve to meet changing needs.
See ExxonMobil’s Outlook for Energy | ExxonMobil