Growing demand for energy will require a mix of generation technologies, says ExxonMobil

As it published its annual Outlook for Energy report, ExxonMobil predicted a greater role for natural gas, which it said would overtake coal to become the largest source of electricity and second largest source of fuel overall by the end of its forecast period.

The report concludes that oil and natural gas will continue to meet about 60% of the world's energy needs by 2040, with liquid fuels remaining the energy of choice for "most types of transportation". Technology advances to enable deep-water production and the development of unexploited sources of oil would help to meet an anticipated 25% increase in demand for oil led by increased commercial transportation activity, it said.

Demand for natural gas would increase by about 65% by 2040, according to ExxonMobil; while use of coal would remain relatively unchanged from that in 2010, the starting point for its research. The firm said that around 65% of the world's recoverable energy sources will have not yet been produced by 2040. The growth in the use of 'unconventional' sources of natural gas, such as shale, would be at its most pronounced in the United States, where ExxonMobil predicted more than half of global growth would occur.

"The world has about 200 years of natural gas at current production levels," the report said.

"Natural gas will continue to play an increasingly important role in meeting global energy needs. Utilities, industries and other consumers are choosing this fuel because it is versatile, affordable and produces relatively low emissions ... Two significant developments in natural gas – shale gas production in North America and the growth of the global LNG market – are likely to play a major role in expanding and reshaping natural gas supplies over the coming decades," it said.

The company said that supplies of energy generated from renewable sources would grow by "close to 60%" over the same period; which it predicted would be driven predominantly by wild, solar and hydro. Wind and solar could provide around 10% of electricity generated in 2040, up from about 2% in 2010, it said.