NEW YORK (AP) — Exxon says the energy renaissance in the U.S. will continue and predicts that North America will become a net exporter of oil and natural gas by the middle of the next decade.
The company's annual long-term energy outlook, released Tuesday, says the rapid growth of production in the U.S. and Canada, along with improved energy efficiency, will lead to more oil and natural gas being sent overseas.
Exxon Mobil Corp.'s annual outlook is noted by investors and policymakers, and the company says its conclusions shape its decisions about where to invest. The main conclusions dovetail with recent forecasts from the U.S. government and others.
Among the main themes from Exxon's report:
— Demand for energy will grow worldwide, but slower than the overall economy because of efficiency gains.
— Energy demand will remain flat in the developed world; nearly all of the growth in demand will occur in developing countries.
— The biggest shift will be growth in the use of natural gas and a decline in the use of coal. By 2025, natural gas is expected to overtake coal as the second most used fuel, after oil.
— By 2025, the U.S. will likely be exporting natural gas in large volumes and producing more oil while consuming less. Canada will continue to be a major crude exporter.
While Exxon does make assumptions about energy prices to make its predictions, it does not disclose what those price assumptions are.
Oil and natural gas production in the U.S. has surged thanks to the combination of hydraulic fracturing, or fracking, and horizontal drilling that allows companies to tap hydrocarbons trapped in shale and other tight rock formations. As a result, natural gas prices have plummeted and the nation's dependence on oil imports has been dramatically reduced.
The International Energy Agency and the U.S. Energy Department's Energy Information Administration have also highlighted the North American oil and gas boom in recent reports. The IEA said last month that the U.S. could overtake Saudi Arabia as the world's top crude producer by 2020.
But fracking has raised environmental concerns. Opponents say drilling fluid or wastewater can seep into water supplies if wells are not constructed properly or if wastewater is not disposed of properly.
Exxon's report predicts that the use of electricity will grow quickly — about 1.3 billion people worldwide do not yet have access to it. But electricity demand in the developed world will remain about flat as devices and appliances get more efficient.
The way electricity will be produced will continue to shift. The use of natural gas, nuclear and renewables will grow and the use of coal will decline. Wind, solar and biofuels will grow the fastest, at 5.8 percent per year. Still, by 2040 they will contribute only 3 percent of the world's energy needs.
The growth in natural gas's contribution to the world energy mix will be the most pronounced, according to Exxon's outlook. This view led Exxon to place a big bet on natural gas when it spent about $31 billion to buy XTO Energy in 2009, a price that analysts now say was much too high. But Exxon's rivals such as Chevron Corp. and Royal Dutch Shell are also leaning more heavily on natural gas.
Still, Exxon says there will be plenty of oil left to power cars, trucks and planes. By 2040 less than half of the world's recoverable oil will have been produced, Exxon's report predicts.
Oil will remain the dominant transportation fuel, allowing demand to grow almost 1 percent a year. Demand for fuel to power heavy trucks will grow fastest, while demand for passenger car fuel will peak worldwide in 2020 as fuel efficiency gains offset the larger number of cars on the road. Worldwide, average fuel economy of passenger cars will rise to 47 miles per gallon by 2040, up from 27 now. Hybrids will outsell conventional gasoline cars by then, Exxon says.
Worldwide emissions of carbon dioxide from energy sources will peak in about 2030. From there, worldwide emissions will gradually decline as transportation fuel economy improves and coal use declines. In the U.S., emissions per person will decline dramatically over the period, but the typical American in 2040 will still emit far more carbon dioxide than the typical Asian or European.