Exxon Mobil Corp. (NYSE:XOM)
Exxon Mobil Corp. (NYSE:XOM) anticipates that global oil demand in 2050 will either remain at current levels or slightly increase, posing challenges for the company’s commitment to achieving net zero carbon emissions by mid-century. According to Exxon’s annual Global Outlook, oil demand is expected to stay above 100 million barrels per day due to growth in industrial applications like plastic production and heavy-duty transportation.
The International Energy Agency (IEA) suggests that to align with the Paris climate agreement’s target of limiting global warming to 1.5°C (2.7°F) above pre-industrial levels, oil demand would need to fall by 75% to just 24 million barrels per day by 2050. However, Exxon acknowledges that the world is not on track to meet this scenario.
Future Emissions and Industry Investment
Exxon projects that global greenhouse gas emissions will begin to decline by 2030, with a 25% reduction by 2050, largely driven by the growth of renewable energy sources. Despite this reduction, the level of emissions is expected to remain insufficient to prevent significant climate change.
These projections align with recent forecasts from other oil industry sources. For instance, OPEC predicts oil consumption will reach 116 million barrels per day by 2045, and Enbridge Inc. foresees demand potentially exceeding 110 million barrels per day.
Exxon warns that a failure to invest in new fossil fuel projects now could have severe economic consequences. Without such investments, Exxon anticipates that oil supply could fall by 70% to 30 million barrels per day by 2030, which could lead to soaring crude prices and severe economic disruption.
Environmentalists and politicians might find Exxon’s outlook contentious, viewing it as an attempt to hinder climate action and safeguard profits. However, Chris Birdsall, Exxon’s director of economics and energy, defends the Global Outlook as a “realistic” projection based on current data and trends. He cautions against a “keep-it-in-the-ground” approach, which he believes could influence policy negatively and hinder necessary energy investments.
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