The Outlook for Energy a view to 23 Rob Gardner 33 rd Annual Marine / Offshore Industry Outlook Conference March 25, 21 This presentation includes forward-looking statements. Actual future conditions (including economic conditions, energy demand, and energy supply) could differ materially due to changes in technology, the development of new supply sources, political events, demographic changes, and other factors discussed herein (and in Item 1 of ExxonMobil s latest report on Form 1-K). This material is not to be reproduced without the permission of Exxon Mobil Corporation.
Importance of Energy 2
Our Key Energy Challenges Reducing poverty and improving living standards Supporting economic growth Minimizing impacts on the environment Maintaining energy security Development of reliable and affordable energy plus ongoing efficiency gains are essential to meeting these challenges... 3
Challenge: Meeting Basic Needs Electricity Modern Cooking/Heating Fuels Available Available ~1.5 Billion People with no Electricity ~ 2.5 Billion People with no Modern Cooking/Heating Fuels 26 World Bank 4
Economic Growth Drives Energy Demand Trillion 25$ GDP 6 GDP Quadrillion BTUs 4 Demand OECD 3 3 2 1 198 25 23 198 25 23 Trillion 25$ GDP 6 Quadrillion BTUs 4 3 3 2 Non OECD 198 25 23 1 198 25 23 5
Efficiency: Reducing Demand Growth Energy per GDP MBTU / 25$ k GDP 15 Demand Quadrillion BTUs 1 1-1.2% 12% Constant 25 Level 9 8 7 What demand would be without efficiency gains ~3 Quads 6-1.5% 5 4 5 3 Average Growth / Yr. 25-23 2 1.2% 1 198 25 23 198 25 23 6
Growing Global Demand By Sector Quadrillion BTUs 3 25 23 23 2 25 1 Transportation Industrial Res/Comm PowerGen Energy Savings 7
Global Transportation Demand By Sector MBDOE 7 Personal vs. Commercial MBDOE 25 6 5 Rail Marine 2 4 3 Aviation Heavy Duty Vehicles Commercia l 15 1 25 23 2 1 Light Duty Vehicles Personal Non OECD OECD 198 25 23 Personal Commercial 5 8
Personal Vehicle Fleet is Growing Vehicle Penetration Cars and Population (millions) Fleet by Car Type Million Cars US 25 125 Advanced US 23 Europe OECD 25 Cars Population 1 75 Diesel Europe OECD 23 5 Gasoline China 25 25 China 23 5 1 15 2 215 23 9
Improving Today s Vehicle % MPG Improvement Engine Light Weight Materials Aero - Dynamics Turbo Charging Transmission i Cylinder Deactivation Body & Accessories Camless Valves Improved Tires Continuously Variable Total 1 2 3 4 Percent A/C Efficiency 6 Speed / 7 Speed 1
Light Duty Vehicle Technology % MPG Improvement Well to Wheels Gasoline Equiv. Electric Vehicle Plug-in Hybrid (PHV) Full-Hybrid & HCCI Conventional Technology 25 5 75 1 Percent 11
Light Duty Vehicle Technology Plug-in Hybrid Assumptions 21 23 Plug-in Hybrid vs. Conventional Vehicles $k 2 Battery cost, $/kwh 8 3 Battery replacements over the vehicle life, # Electricity cost, /kwh 5 5 15 1 21 5 23 $2 / gallon gasoline $4 / gallon gasoline Additional Cost Annual Savings Annual Savings 12
Electricity Use is Growing Fast By Sector k TWhr 3 By Region k TWhr 3 Transportation 2 Other Industry Heavy Industry 2 Other Other AP China 1 Commercial 1 Other AP Europe Residential 198 25 23 US 198 25 23 13
Electricity Use is Growing Fast By Sector k TWhr 3 By Generation k TWhr 3 Transportation 2 Other Industry Heavy Industry 2 Gas Coal 1 Commercial 1 Oil Nuclear 4% Residential Renewables 198 25 23 198 25 23 14
Electricity Generation Cost US Baseload, Startup 225 29 Cents/kWhr 2 15 No CO2 Cost 1 5 Coal Gas Nuclear Wind Coal + CCS Gas + CCS Solar 15
Electricity Generation Cost US Baseload, Startup 225 29 Cents/kWhr 2 15 $3 per Ton 1 5 Coal Gas Nuclear Wind Coal + CCS Gas + CCS Solar 16
Electricity Generation Cost US Baseload, Startup 225 29 Cents/kWhr 2 15 $6 per Ton 1 5 Coal Gas Nuclear Wind Coal + CCS Gas + CCS Solar 17
Global Energy Demand and Supply By Sector Quadrillion BTUs By Fuel Quadrillion BTUs 7 7 6 5 Res/Comm 6 5 Wind, Solar, Biofuels Hydro, Geo Biomass Nuclear 4 Industrial 4 Coal 3 Transportation 3 Gas 2 2 1 Power Generation 1 Oil 198 25 23 198 25 23 18
Global Energy Demand and Supply Demand and Supply Quadrillion BTUs 25 23 3 3 Non OECD 2.8% 23 25.5% 1.8% 16 OECD 1.5% 2.3% Non OECD 22% 2.2% 96% 9.6% Oil Coal Gas Biomass Nuclear Hydro, Geo Wind, Solar, Biofuels Total Energy Growth Energy Savings 19
Global Liquids Supply Grows Global Liquids Supply and Demand MBDOE 12 23 9 6 3 OPEC Crude ~27 Liquids Demand ~28 ~34 Biofuels Other Petroleum Canada Oil Sands ~37 OPEC Non-OPEC 25 Supplies Non-OPEC Crude & Condensate 198 199 2 21 22 23 Base/Adds 2
Gas Supply and Demand Balance United States BCFD Europe BCFD 12 12 12 Asia Pacific BCFD 9 9 9 6 Pipeline LNG Imports 6 6 Unconventional 3 3 3 Conventional 2 215 23 2 215 23 2 215 23 LNG: Liquefied Natural Gas 21
CO 2 Emissions CO 2 Emissions Billion Tons 4 Emissions per Capita Tons / Person 12 25 Emissions per GDP Tons / 25$ k GDP 2. 1 3 23 1.5 8 2 Non OECD 6 1. 4 1.5 OECD 2 198 25 23. OECD Non OECD OECD Non OECD 22
OECD Transitions to Lower Emissions Change in CO 2 Emissions Billion Tons 3 Energy per GDP MBTU / 25$ k GDP 12 Reducing CO 2 Content t 2 198-25 1 8 1 25-1 6 4 23 198 Incre easing Efficie ncy -2-3 25-23 2 1 2 3 4 5 6 7 CO 2 Content (Tons CO 2 / BBTU) 23
Transition to Modern Energy / Technology US Energy Demand Percent 1% Canals 75% Railways & Steamships 5% 25% Coal Mining Wood & Coal Heating Telegraph % 185 19 195 2 Wood Coal Hydro Oil Gas Nuclear Renewables Energy Information Agency 24
Transition to Modern Energy / Technology US Energy Demand Percent 1% Personal Vehicles 75% Rail Freight 5% Electrification 25% Oil Prod & Refining Telephone % 185 19 195 2 Wood Coal Hydro Oil Gas Nuclear Renewables Energy Information Agency 25
Transition to Modern Energy / Technology US Energy Demand Percent 1% Passenger Flights 75% Road Freight 5% Air Conditioning 25% Natural Gas in Homes Nuclear Power % 185 19 195 2 Wood Coal Hydro Oil Gas Nuclear Renewables Energy Information Agency 26
Transition to Modern Energy / Technology US Energy Demand Percent 1% Hybrid Vehicle 75% Deepwater &Arctic 5% Shale Gas & Oil Sands Wind 25% Cell Phones & PCs % 185 19 195 2 Wood Coal Hydro Oil Gas Nuclear Renewables Energy Information Agency 27
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Integrated Energy Solutions 6.7 billion people Now Increase 23 Efficiency 8 billion people Global economic linkages Disparate living standards Enormous energy needs Environmental gains & concerns Growing technology use & focus Expand Supply Mitigate Emission s Non OECD leads economic growth Less poverty; living standards improve Global energy needs up one-third Progress on environmental goals Significant advances in technology 29
Integrated Energy Solutions Increase Efficiency Technology Mitigate Emissions Expand Supply 3
ExxonMobil: improving efficiency Lithium-ion battery technology Innovative film separator could help put more fuel-efficient hybrid and plug-in electric vehicles on the road Advanced synthetic lubricants Mobil 1 AFE can improve fuel economy by up to 2 percent [1] versus most commonly used motor oils Cogeneration Process used at about 1 plants [2] worldwide to capture and use heat generates electric power up to 5% more efficiently than local utilities [1] Actual savings are dependent upon vehicle/engine type, outside temperature, driving conditions, and current engine oil viscosity. [2] In which ExxonMobil has interests. 31
ExxonMobil: expanding supplies Directional drilling Record-setting horizontal wells stretching 7+ miles enable us to produce more oil with less environmental impact Unconventional and liquefied natural gas Multi-Zone Stimulation Technology TM, allows us to produce tight gas ; large-scale Q-Max tankers allow us to safely and efficiently deliver natural gas to markets worldwide. Algae biofuels ExxonMobil is investing up to $6 million to develop oils that are compatible with existing transportation technology and infrastructure from photosynthetic, CO 2 -consuming algae 32
ExxonMobil: reducing emissions Natural gas ExxonMobil is a global leader in production of natural gas, electricity from natural gas emits up to 6 percent less CO 2 than coal Controlled Freeze Zone This technology, which reduces the cost and complexity of separating CO 2 from produced natural gas, could help carbon capture and storage systems reduce GHG Carbon capture and storage As a leader in CCS, ExxonMobil has captured up to 4 million metric tons of CO 2 per year in Wyoming, and partnered to store 1 million metric tons in the North Sea. 33
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