The Outlook for Energy: A View to 2040 Ken Golden February 3, 2016 The Outlook for Energy includes Exxon Mobil Corporation s internal estimates and forecasts of energy demand, supply, and trends through 2040 based upon internal data and analyses as well as publicly available information from external sources including the International Energy Agency. Work on the report was conducted throughout 2015. This presentation includes forward looking statements. Actual future conditions and results (including energy demand, energy supply, the relative mix of energy across sources, economic sectors and geographic regions, imports and exports of energy) could differ materially due to changes in economic conditions, technology, the development of new supply sources, political events, demographic changes, and other factors discussed herein and under the heading Factors Affecting Future Results in the Investors section of our website at www.exxonmobil.com. This material is not to be used or reproduced without the permission of Exxon Mobil Corporation. All rights reserved. 1
Global Trends Continue to Evolve 125% Growth from 2014 Level Percent GDP 100% 75% 50% 25% Demand Population 0% 2014 2040 Carbon Emissions 2
Key Energy Outlook Themes Energy is fundamental to standards of living. Developing nations lead gains in GDP and living standards. Economics and policies impact the fuel mix. Oil remains the world s primary fuel through 2040. Naturalgas grows more thanany otherenergy source. Technology has the highest potential and greatest uncertainty. 3
Energy is fundamental to standards of living. 4
Energy Fuels Human Development U.N. Human Development Index 2013 Index 1.00 Norway Germany United States 0.75 Brazil Bangladesh India China 0.50 Nigeria Congo 0.25 0.00 10 100 1000 10000 Source: United Nations, ExxonMobil estimates Energy Use per Capita (Thousand BTU/person/day) 5
The energy equation People living standards energy needs 6
The energy equation 7gallons/day U.S. daily usage or 27,000 cell phone batteries 7
The energy equation U.S. daily usage 7gallons/day World daily usage 1.7gallons/day 8
The energy equation 7 billion people 1.7 gallons per person 12 billion gallons per day 9
Developing nations lead ingdp growth andliving standard improvements. 10
Global GDP Shifts Toward Developing Nations 2014 OECD* Rest of World Key Growth India China Mexico Brazil Nigeria Egypt Turkey Iran Saudi Arabia India Thailand China Indonesia South Africa $72 Trillion (2010$) *Mexico and Turkey included in Key Growth countries 11
Global GDP Shifts Toward Developing Nations 2040 2014 OECD* Rest of World Key Growth India China 2.0% per year 3.4% 3.5% 5.5% 5.0% $72 Trillion (2010$) ~$150 Trillion (2010$) *Mexico and Turkey included in Key Growth countries 12
Middle Class and Urbanization Increase Global Middle Class Billion People 5 Urbanization Percent 100 4 Rest of World Key Growth 75 OECD* Turkey China Indonesia 3 2 China 50 India 1 India 25 OECD* 0 '14 '30 0 1980 2000 2020 2040 Source: The Brookings Institution *Mexico and Turkey included in Key Growth countries Source: United Nations 13
Demand Growth From Developing Nations Energy Demand Quadrillion BTUs 800 600 Rest of World Key Growth 400 India China 200 OECD* 0 2000 2020 2040 *Mexico and Turkey included in Key Growth countries 14
Economicsandpolicies impact the fuel mix. 15
Children cannot study in the dark. Girls and women cannot learn or be productive when they spend hours a day collecting firewood. Businesses and economies cannot grow without power. Secretary-General Ban Ki-moon United Nations Foundation 16
Every country finds itself at a different point in the development journey. Therefore, the pace and rhythm of their emissions reductions and investments in adaptation will vary. President Jim Yong Kim World Bank Group 17
We believe the risks of climate change are serious and warrant thoughtful action. Rex Tillerson, CEO Exxon Mobil Corporation 18
CO 2 Policy Assumptions Vary by Region 2040 CO 2 Proxy Cost < 10 $/ton ~ 20 $/ton ~ 35 $/ton ~ 80 $/ton 19
CO Energy 2 Emissions Mix Shifts Plateau to Lower-Carbon Fuels Global Energy Mix Percent Energy-Related CO 2 Emissions by Region Billion Tonnes 100% Biomass 40 Renewables 75% Nuclear 30 Rest of World Gas Key Growth 50% 20 India Coal China 25% 10 Oil OECD* 0% 2014 2040 0 2000 2020 2040 *Mexico and Turkey included in Key Growth countries 20
The only reason I m optimistic about this problem is because of innovation. Bill Gates The Atlantic, Nov. 2015 21
Oil remains the world s primary fuel through 2040. 22
Transportation and Chemicals Drive Growth Liquids Demand by Sector MBDOE 75 25 40 50 10 25 Chemical 0 Transportation Industrial Res/Comm Electricity Generation 23
Transportation Demand Sector Demand MBDOE 75 Rail 50 Marine Aviation Commercial Heavy Duty 25 Light Duty 0 2000 2020 2040 24
Global Fuel Economy Standards (2008) Policy in Place Standards Policy Evolving 25
Global Fuel Economy Standards (2014) Policy in Place Standards Policy Evolving 26
Global Vehicle Fleet By Type Million Cars 2000 Internal Combustion Engine Electric 1500 Elec/Plug-in/Fuel Cell Hybrid Natural Gas & LPG Diesel Gasoline Lower Cost Convenience Improving Efficiency Natural Gas & LPG Hybrid Public Transport High Efficiency High Cost Range/Charging Limit Hydrogen Fuel Cell 1000 500 0 '10 '15 '20 '25 '30 '35 '40 27
Liquids Production By Region MBDOE 120 By Type MBDOE 40 80 Other NonOPEC Russia 30 10 40 25 North America 20 40 OPEC 10 0 2000 2020 2040 0 OPEC Non-OPEC NGLs Tight Oil Deepwater Oil Sands Other Conventional Crude and Condensate 28
Natural gas grows more than any other energy source. 29
Gas Demand Grows in All Sectors Gas Demand by Sector BCFD 250 40 200 25 150 10 100 50 0 Electricity Generation Industrial Res/Comm Transportation 30
Electricity Demand Continues to Surge By Sector Thousand TWh Electricity Demand by Region Thousand TWh 40 10 2014 30 Transportation 8 China 20 Res/Comm 6 4 Key Growth United States Europe OECD 10 Industrial 2 India 0 2000 2020 2040 0 1980 2010 2040 31
Fuel for Electricity Transitions Electricity Delivered by Type Thousand TWh 40 30 Other Renewables Wind & Solar 20 Nuclear Gas 10 0 OECD '00 '10 '20 '30 '40 Coal Oil 32
Natural Gas Supply By Production Type BCFD 600 By Delivery Type BCFD 600 LNG 400 Unconventional 400 Pipeline 200 200 Conventional Net Local Production 0 2000 2020 2040 0 2000 2020 2040 33
Technology has the highest potential and greatest uncertainty. 34
Technology Helps Us Do More With Less Global Average Energy Intensity Thousand BTUs per dollar GDP (2010$) 15 2014 10 5 0 1970 1980 1990 2000 2010 2020 2030 2040 35
Technology Contributes to the Fuel Mix Global Mix of Fuels 100% 75% Other Renewables Nuclear Hydro Unconventional Gas Gas 50% Deepwater, Oil Sands, Tight Oil Oil 25% Coal 0% Biomass 1850 1900 1950 2000 2040 Source: Smil, Energy Transitions (1800-1960) 36
Global Demand 2040 By Fuel Quadrillion BTUs 250 0.7% Average Growth / Yr. 2014-2040 200 2014 1.6% 0.9% 150-0.2% 100 50 0.3% 2.9% 4.8% 1.3% 0 Oil Gas Coal Biomass Nuclear Solar / Wind / Biofuels Hydro / Geo 37
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