US energy giant confident of oil supplies but talks up hybrid cars

Exxon Mobil, the US energy giant, expects to see more hybrid vehicles on the world’s roads with models such as the Toyota Prius making up half the total by 2040.

The largest publicly traded oil and gas company says the use of hybrids – vehicles that rely on both petrol and electricity for power – and other gains in fuel efficiency will keep energy demand in check in the US and other major industrialised countries for years.

Exxon, which released its annual energy outlook yesterday, predicts that energy demand will remain flat until 2040 in developed nations.

However, it says that China and other developing nations will continue to increase their thirst for oil and other petroleum based fuels.

Energy demand within developing nations is expected to rise nearly 60 per cent over the next 30 years.

Overall, gains in efficiency will cut fuel consumption and help the global economy, says the company, which forecasts that from now to 2040, world GDP will grow an average of 2.9 per cent per year while energy demand will grow by only 0.9 per cent.

Exxon’s long-term energy analysis, which was extended this year from 2030 to 2040, paints a picture of a petroleum-reliant world that still has huge untapped reserves.

The forecast says the boom in the production of natural gas from shale rock formations will spread outside the US to almost every continent. Exxon’s projections show the world having enough natural gas trapped in underground rock layers to last 250 years at current consumption levels.

It also expects demand for liquid fuels to rise from about 88 million barrels today to 110 million barrels by 2040.

An increasing number of those barrels will come from non-traditional sources such as deepwater fields, Canadian oil sands, natural gas liquids and biofuels.

Meanwhile, power plants will increasingly rely on nuclear energy, natural gas and renewables. Coal use is expected to level off and then decline in coming years.