Exxon Mobil Corporation

Outlook for Energy A View to 2030

Outlook for Energy: A View to 2030

Table of Contents
Evolution of energy and technology Our key energy challenges Growing global demand Global transportation demand A single-cell oil well? Improving today’s vehicle Thinking outside the tank Global industrial demand Managing emissions Global energy demand and supply The importance of natural gas Options for carbon policy CO2 emissions Integrated energy solutions Key findings Glossary 2 6 13 15 16 18 20 21 22 25 27 31 32 34 36 37

This publication 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 10-K). This material is not to be reproduced without the permission of Exxon Mobil Corporation.
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The Outlook for Energy:

A View to 2030
the world varies dramatically but equates to an average of 200,000 British thermal units (BTUs) a day. Globally, that translates to 15 billion BTUs every second. ExxonMobil believes that meeting future energy needs while also reducing environmental risk will require an integrated set of solutions that includes: • Accelerating energy efficiency, which tempers demand and

In our Outlook for Energy – A View to 2030, we see many hopeful things – economic recovery and growth, improved living standards and a reduction in poverty, and promising new energy technologies. But we also see a tremendous challenge: how to meet the world’s growing energy needs while also reducing the impact of energy use on the environment. As the Outlook shows, ExxonMobil expects that global energy demand in 2030 will be almost 35 percent higher than in 2005, even accounting for the recession that dampened energy demand in 2009. Other key findings include: • Growth will be led by rapid expansion in non-OECD countries such as China and India, where energy usage will rise by about 65 percent. • Demand will be particularly intense for electric power generation, which will comprise 40 percent of global energy demand by 2030. • Oil and natural gas will remain essential, but other sources including nuclear and renewables (e.g., wind, solar and biofuels) will play an expanded role. The future of energy is directly linked to the future well-being and prosperity of the world’s people. Today, about 1.5 billion people – a quarter of the world’s population – lack access to electricity. Even more lack modern cooking and heating fuels. Expanding access to energy – and the opportunities it affords – should be a shared global goal. Our energy and environmental challenges are intertwined and their scale is enormous. Today, energy use per person around

saves emissions • Expanding all economic energy sources, including oil and natural gas • Mitigating emissions through the use of new technologies and cleaner-burning fuels such as natural gas, nuclear and other renewable sources. This multidimensional approach will need trillions of dollars in investment, and an unwavering commitment to innovation and technology that evolves over years and decades. It will require sound, stable government policies that enable access to resources and encourage long-term investments and technological development. And it will require the global energy industry to operate on a scale even larger than today. Updated each year, The Outlook for Energy is a comprehensive look at long-term trends in energy demand, supply, emissions and technology. The report is built upon detailed analysis of data from about 100 countries, incorporating publicly available information as well as in-house expertise. ExxonMobil uses the Outlook to guide its long-term investment decisions. We share it publicly to encourage a better understanding of our company, our industry and the global energy challenges that we all have a vested interest in meeting.

The Outlook for Energy: A View to 2030

1

Evolution of energy and technology
Energy sources and technology evolve over time – and each influences the other. By understanding the history of energy and technology, we can better understand the future course of the energy challenge. As an example, the history of energy use in the United States over the last 150 years illustrates the way energy use and technologies develop over time. Looking out to 2030, we see gradual In the United States in 1850, wood was the biggest energy source. But by 1900, coal had become predominant. Technology played a role in this trend, as mining evolved and coal fed the newly industrialized nation. America’s access to energy enabled its growth as an industrial economy; in turn, industrial growth and the wealth it created expanded U.S. energy demand. It is important to note that it took about 40 years for coal to achieve its substantial share. By 1950, oil was overtaking coal, as more Americans owned cars and rail transport shifted from coal to diesel. The growth of cars and trucks, as well as the birth of the commercial airline industry, meant a new need for transportation fuels. Improvements in oil-exploration technologies helped keep pace with this growing fuel demand. Also by 1950, hydroelectric power came into use. And natural gas, considered nearly worthless a generation earlier, grew as a fuel to meet the growing heating and Change in energy use and technology development is an evolutionary process, but one that often has revolutionary impacts. shifts in energy and technology continuing. Both the U.S. and world energy mix continue to grow more diverse, which strengthens energy security by reducing the risk from disruption to any single supply source. We will need to expand all these sources – and develop new ones – to meet future demand. New energy technologies will open up new energy sources, and new end-use technologies will reshape demand patterns, just as they have for the last 150 years. It is important to remember, however, that these shifts happen slowly, over the course of decades. Free markets, open trade, and stable legal, regulatory and tax frameworks will facilitate these positive transformations. From 1950 to 2000, we saw the introduction and growth of nuclear energy and the first meaningful appearance of modern renewable fuels. Natural gas also continued to grow and was now fueling power generators as well. industrial needs of an increasingly wealthy nation. Coal remained significant and helped meet growing electricity demand.

Transition to modern energy/technology
U.S. Energy Demand Percent
100 Wood Coal Oil Gas Hydro Nuclear

75

50

25

0
1869 Golden spike set in Transcontinental Railroad 1884 First 1879 First steam turbine commercial incandescent light bulb 1896 Niagara Falls hydroelectric plant opens 1901 First-gasoline powered automobile mass-produced 1907 First drive-in gas station opened

1859 First oil well drilled in Titusville, PA.

Modern Renewables

Source: Energy Information Administration

1916 First radio turner

1927 Charles Lindbergh flew across Atlantic

1936 1933 Hoover Dam Philo Farnsworth completed develops electronic television

1947 First offshore well out of sight of land

1954 Modern silicon solar cell invented

1956 Interstate Highway Bill signed

1969 First flight of the Concorde supersonic jet 1969 Man walks on the moon

1975 Vehicle fuel economy standards (CAFE) enacted by Congress

1952 First commercial jet service

The Outlook for Energy: A View to 2030

2

1979 The first commercial citywide cellular network was launched in Japan

1980 The first U.S. windfarm consisting of 20 turbines is built in New Hampshire 1981 IBM introduces the personal computer

1992 U.S. "Energy Star" program introduced 1991 First commercial lithium battery

2001 Human genome sequenced

2005 U.S. mandate for ethanol blending into gasoline

2009 U.S. natural gas resources now cover about 100 years at current demand due to unconventional gas drilling technology advances (Source: Colorado School of Mines)

2003 First ultra-deepwater well depth greater than 3,000 meters

Importance of energy
Before considering the many energy demand, supply and emissions trends that constitute the world’s energy outlook through 2030, it is worth reflecting on the importance of energy to all aspects of our lives. Fundamentally, the energy outlook is about people – billions of people and their families using energy to improve their daily lives. At a national and international level, it is the lifeblood of modern economies. For developed nations, reliable energy fuels the technologies and services that enrich and extend life. Energy powers advanced computers, improved transportation, expanded communications, cutting-edge medical equipment and procedures, and much more. For developing nations, expanding reliable and affordable supplies of energy supports and even accelerates changes that improve and save lives. Reliable energy means expanded industry, modern agriculture, increased trade and improved transportation. These are building blocks of economic growth that create the jobs that help people escape poverty and create better lives for their children. For these reasons and more, energy issues are vitally important and demand our understanding.

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Your energy footprint
daily energy use
BTUs per Person
North America

Your energy footprint

740,000 BTUs per Day

Russia/Caspian

Europe

Middle East Direct Energy Use Household Personal Vehicle Indirect Energy Use Asia Pacific

Latin America

Africa
0 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000

The benefits of energy reach far beyond what we may see in our day-to-day lives. The energy XOMpeople use every day – to run that Energy Outlook
For: GCG their households and drive their cars – is what Pat Gabriel / Brian Wilburn 817-332-4600

of the total. In other words, when direct and indirect energy consumption are Data as of 11/30/2009 counted, each of us has on average an Public Buildings 117161 29261 45103 26748 8081 10042 2788

energy “footprint” that is about Households Personal Car twice the NA 129057 size of what we might typically 146542 consider R/C 96721 7707 File name: we can categorize as 05A XOMEO-EnergyUse.ai our personal energy consumption. personal, or direct, Europe 92112 35434 Placed file(s): None consumption of energy, and it includes the ME 73984 14388 For page: 05 Last updated: fuel used to make electricity for the home. 12/07/2009 In 2005, the average person in North America 9398 LA 21908 Updated by: Carol Zuber-Mallison AP 30218 5442 had ZM GRAPHICS • 214-906-4162 • carol@zmgraphics.com a daily energy footprint equivalent to Africa 35406 1882 (c) 2009, ZM Graphics Inc. To complete the picture, we also need nearly 740,000 BTUs of energy.
Usage: Unlimited within ExxonMobil to count the energy that powers private

Commercial Tra 80377 28943 52179 62898 25550 10873 8025

enterprise, public services and other important needs across society. This indirect consumption includes energy required to run buildings (schools, hospitals, retail shops), commercial transportation (trucking, air and rail travel) and industry (manufacturing, chemicals, steel). Every member of society benefits from this indirect energy usage – through job opportunities, higher living standards and overall economic growth. On a global, per-capita basis, indirect energy consumption is about two-thirds

The pattern of direct and indirect energy use holds true in every region of the world. While the absolute level of energy use differs, indirect use is larger in every region. As we look at different ways to solve our energy challenges, we must consider not only the energy we use in our daily lives, but also the tremendous energy being used behind the scenes that makes our modern lives possible.

The Outlook for Energy: A View to 2030

5

Our key energy challenges

As we survey the global energy landscape to 2030, we see several interlocking challenges. One of the biggest jobs through 2030 will be to reduce poverty and raise living standards around the world. An important factor in achieving this goal will be to continue meeting the world’s energy needs safely, reliably and affordably, even as population and economic growth – particularly in developing countries – pushes global demand higher by almost 35 percent compared to 2005. By providing reliable and affordable energy, we will also help revitalize economies and enable broad economic gains around the world. Meeting this demand will not be easy, especially considering that the world’s energy resources are increasingly found in difficult or hard-to-reach places. And it will require the global energy industry to operate on a scale even larger than it does today. At the same time, because we want to ensure that today’s progress does not come at the expense of future generations, we

need to manage the risks to our climate and environment. That includes taking meaningful steps to curb carbon dioxide (CO2) emissions, while at the same time utilizing local resources to help maintain secure supplies. We can meet these interlocking challenges. To do it, we will need an integrated set of solutions that includes expanding all economic energy sources, improving efficiency and mitigating emissions through the use of cleanerburning fuels such as natural gas. These solutions must be supported by trillions of dollars in new energy investment, a long-term focus and constant technological innovation. ExxonMobil is committed to pursuing each of these integrated solutions.

Globally, about 2.5 billion people rely on traditional fuels such as wood and dung for heating and cooking.

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Challenge: meeting basic needs
electricity

Challenge: meeting basic needs
Globally,
modern cooking and heating fuels

Available

Available

1.5
billion people lack access to electricity.

about

About 1.5 Billion People with No Electricity

About 2.5 Billion People with No Modern Cooking or Heating Fuels

Over the past 150 years, the evolution of modern energy and technology has enabled people in developed countries to achieve a lifestyle in which access to energy – at home, at work and on the road – is largely taken for granted. In many of these places, the challenge today is largely one of securing enough reliable, affordable energy to continue meeting these existing needs. But in some parts of the world, the challenge is far more basic. Today, globally, about 1.5 billion people lack access to electricity. Even more live without modern fuels for cooking and heating. Instead, these 2.5 billion people – nearly 40 percent of the world’s population – rely on burning wood, dung or other traditional biomass fuels, which can be dangerous to people’s health and harmful to air quality. Gaining access to energy represents hope and opportunity. It means improved transportation, increased commerce, expanded industry and greater access to health care and other social services – all of which create jobs that help people escape

poverty. For nations with widespread poverty, affordable and reliable energy also is vital to building homes, schools, hospitals and sanitation systems that can improve XOM Energy Outlook and save lives.
File name: 07A XOMEO-MeetingBasicNeeds.ai As we consider the energy outlook to 2030, For: GCG Pat Gabriel / Brian Wilburn 817-332-4600 Placed file(s): For page:

None 07 Last updated: 12/07/2009 gap,” and energy’s potential to lift lives and Updated by: Carol Zuber-Mallison A satellite image of the Earth

it is important to keep in mind this “energy

improve ZM GRAPHICS • 214-906-4162 • carol@zmgraphics.com at night shows electricity communities in developed and developing nations alike.
(c) 2009, ZM Graphics Inc.

usage by region.

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The Outlook for Energy: A View to 2030

7

8

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On average, a city of 1 million people in the OECD:
Needs 6 million BTUs of energy every second Consumes over 1,000 gallons of oil per minute Uses 150 tons of coal each hour Requires two world-scale power plants Drives 500,000 cars that use over 500,000 gallons of petroleum every day

Naples, Italy, population 1,004,500
The Outlook for Energy: A View to 2030 9

Energy demand to grow sharply
population
Billions
10

Energy demand to grow significantly
GDP
Trillions in 2005 Dollars
0.9% Average Growth per Year 2005 – 2030
100

energy demand
Quadrillion BTUs
700

2.7% Average Growth per Year 2005 – 2030

600

1.2% Average Growth per Year 2005 – 2030

8

80 500

6

60

400

4

40

300

200 2 20 100

0 1980

2005

2030

0 1980

2005

2030

0 1980

2005

2030

When ExxonMobil prepares its Outlook for Energy each year, we start with the world’s XOM Energy Outlook economic outlook, because economic activity – along with population growth – is
File name: For: GCG Pat Gabriel / Brian Wilburn 817-332-4600

ExxonMobil expects that global energy demand will rise by an average annual rate of 1.2 percent a year through 2030, when the world will be using almost 35

1/1/82 1/1/83 1/1/84 1/1/85 1/1/86 1/1/87 1/1/88 1/1/89 1/1/90 1/1/91 1/1/92 1/1/93 1/1/94 1/1/95 1/1/96 1/1/97 1/1/98 1/1/99 1/1/00 1/1/01 1/1/02 1/1/03 1/1/04 1/1/05 1/1/06 1/1/07 1/1/08 1/1/09 1/1/10 1/1/11 1/1/12 1/1/13 1/1/14 1/1/15 1/1/16 1/1/17 1/1/18 1/1/19 1/1/20 1/1/25 1/1/30

45 46 47 47 48 49 50 51 52 53 53 54 55 56 57 57 58 59 60 60 61 62 63 63 64 65 65 66 67 67 68 69 69 70 71 71 72 73 73 76 79

10A XOMEO-WorldFactors.ai percent more energy than it did in 2005. a fundamental driver of energy demand. Placed file(s): None The composition of the world’s energy will For page: 10 Last updated: 12/07/2009 continue to evolve through 2030, as we The economic trend, globally, is the same, Updated by: Carol Zuber-Mallison
ZM GRAPHICS will and it’s encouraging. • 214-906-4162 • carol@zmgraphics.com discuss later in the Outlook. (c) 2009, ZM Graphics Inc.

While the recession is expected to produce a 2 percent contraction in global GDP in 2009, economic growth will return, and return to a pre-recession rate. In fact, from 2005 through 2030, we see global GDP expanding at an average annual rate of 2.7 percent. At the same time, the world’s population is expected to rise from 6.7 billion today to almost 8 billion. As we noted earlier, rising populations not only create new demands for energy for personal needs such as fuels for cars and electricity for homes, but also energy that is consumed “indirectly” – the energy that serves the broader society and economy. Together, population and economic growth through 2030 will continue to drive global energy demand higher.

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It’s important to note that while economic growth drives energy demand, because of expected gains in energy efficiency, our projected rate of energy-demand growth (1.2 percent) is less than half the rate of global GDP growth (2.7 percent) through 2030.
In the United States and other OECD countries, energy demand will be essentially flat and CO2 emissions will decline through 2030 even as economies and populations grow. Energy efficiency will play a key role.

10

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Economic growth drives energy demand
Economic growth drives energy demand
GDP
Trillions in 2005 Dollars
60

Global

energy demand
Quadrillion BTUs
400

energy demand
Non-OECD

50

OECD
40

300

OECD
30 200

35
in 2005.
2030

will be almost

higher in 2030 than it was

Non-OECD
20 100 10

0 1980

2005

2030

0 1980

2005

While global energy demand is expected to rise by almost 35 percent through 2030, to fully understand the energy outlook in XOM Energy need to coming decades, weOutlook examine what’s going
11A XOMEO-EconomicGrowth.ai Economic Co-operation and Development
File name: For page: For: GCG Pat Gabriel / Brian Wilburn 817-332-4600 on in developed Organization for Placed file(s):

By contrast, in OECD countries, energy demand is expected to actually be slightly lower in 2030 versus 2005, even though their economies will be more than 50 percent larger on average.

None How is this possible? The main reason is 11A Last updated: 12/07/2009 European nations) and non-OECD nations efficiency. ExxonMobil continues to project Updated by: Carol Zuber-Mallison

(OECD) countries (like the United States and

ZM GRAPHICS 214-906-4162 • carol@zmgraphics.com substantial improvements in efficiency in OECD (such as China and •India), because the trends

in these two groups can be starkly different.
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(c) 2009, ZM Graphics Inc.

countries. In non-OECD countries, we also see efficiency improving, but faster growth in GDP and personal incomes will continue to drive demand higher there.

Through 2030, the economies of non-OECD countries, while still relatively smaller, will grow at a much faster rate than those of the OECD. By 2030, these developing economies will have reached close to 60 percent of OECD economic output. In non-OECD countries, rapid economic growth is expected to produce a steep climb in energy demand. In fact, we expect that between 2005 and 2030, non-OECD energy demand will grow by about 65 percent. However, even with this rapid growth, per-capita energy demand in nonOECD countries still will be much smaller than in OECD countries.

Data as of 10/28/2009 GDP OECD Non 1/1/80 16631 3627 1/1/81 16928 3645 1/1/82 16953 3682 1/1/83 17420 3768 1/1/84 18236 3913 1/1/85 18893 4027 1/1/86 19473 4214 1/1/87 20150 4403 1/1/88 21074 4588 1/1/89 21876 4719 1/1/90 22524 4781 1/1/91 22894 4877 1/1/92 23334 4967 1/1/93 23632 5127 1/1/94 24350 5352 1/1/95 24948 5610 1/1/96 25679 5895 1/1/97 26547 6198 1/1/98 27165 6336 1/1/99 28016 6548 1/1/00 29085 6913 1/1/01 29400 7140 1/1/02 29820 7423 1/1/03 30380 7856 1/1/04 31333 8453 1/1/05 32117 9057 1/1/06 33063 9770 1/1/07 33885 1055 1/1/08 34141 1118 1/1/09 33023 1139 1/1/10 33391 1191 1/1/11 33961 1249 1/1/12 34743 1313 1/1/13 35544 1379 1/1/14 36350 1447 1/1/15 37176 1517 1/1/16 38011 1591 1/1/17 38866 1668 1/1/18 39743 1748 1/1/19 40640 1833 1/1/20 41552 1921 1/1/21 42436 2010 1/1/22 43339 2102 1/1/23 44261 2199 1/1/24 45203 2300 1/1/25 46165 2406 1/1/26 47127 2507 1/1/27 48110 2612 1/1/28 49113 2721 1/1/29 50137 2834 1/1/30 51182 2953

%

The world uses 15 billion BTUs of energy every second. As more countries move up the economic ladder, more energy will be required.
The Outlook for Energy: A View to 2030 11

Efficiency: reducing demand growth
Efficiency: reducing demand growth
energy per GDP
Millions of BTUs per Unit of Gross Domestic Product in 2005 Dollars
15

Gains in energy 2030 will

energy demand
Quadrillion BTUs
1000 900

efficiency through
What demand would be without efficiency gains ~300 Quads

10

1.2% Average Efficiency Gain per Year 1980 – 2000

Constant 2005 Level

800 700 600

energy-demand growth by approximately

1.5% Average Efficiency Gain per Year 2005 – 2030
5

500 400 300 200 100

1.2% Average Growth per Year 2005 – 2030

65

0 1980

2005

2030

0 1980

2005

2030

Our world continues to become more energy efficient. From 1980 to 2000, the energy it took to produce one unit of GDP fell by an average 1.2 percent a year. This occurred for a number of reasons, including the use of new, energy-saving technologies. We expect efficiency gains to accelerate between 2005 and 2030 versus historical trends, with energy-per-GDP falling at an average global rate of 1.5 percent a year. This faster pace will be driven by higher energy costs, government mandates and regulations, technology advances and expected CO2 emissions costs in OECD countries.

was held flat at 2005 levels. In that case, global energy demand in 2030 would not be almost 35 percent higher than in 2005, as we currently project; it would be about XOM Energy Outlook 95 percent higher. Put another way, gains
Pat Gabriel / through 817-332-4600 in energy efficiency Brian Wilburn2030 will curb For: GCG File name:

12A XOMEO-EnergyPerGDP.ai None about 65 percent. For page: 12 Last updated: 12/07/2009 Updated by: Carol Zuber-Mallison

energy-demand growth through 2030 by
Placed file(s):

1/1/81 1/1/82 1/1/83 1/1/84 1/1/85 1/1/86 1/1/87 1/1/88 1/1/89 1/1/90 1/1/91 1/1/92 1/1/93 1/1/94 1/1/95 1/1/96 1/1/97 1/1/98 1/1/99 1/1/00 1/1/01 1/1/02 1/1/03 1/1/04 1/1/05 1/1/06 1/1/07 1/1/08 1/1/09 1/1/10 1/1/11 1/1/12 1/1/13 1/1/14 1/1/15 1/1/16 1/1/17 1/1/18 1/1/19 1/1/20 1/1/21 1/1/22 1/1/23 1/1/24 1/1/25 1/1/26 1/1/27 1/1/28 1/1/29 1/1/30

reduce global

14.3 14.1 14 13.9 13.8 13.6 13.6 13.5 13.3 13.2 13.1 12.9 12.8 12.5 12.5 12.5 12.1 11.9 11.8 11.5 11.4 11.4 11.5 11.5 11.4 11.3 11.1 11 10.8 10.9 10.8 10.7 10.5 10.4 10.2 10 9.8 9.7 9.5 9.3 9.1 9 8.8 8.7 8.5 8.4 8.2 8.1 7.9 7.8

%

1/1/81 1/1/82 1/1/83 1/1/84 1/1/85 1/1/86 1/1/87 1/1/88 1/1/89 1/1/90 1/1/91 1/1/92 1/1/93 1/1/94 1/1/95 1/1/96 1/1/97 1/1/98 1/1/99 1/1/00 1/1/01 1/1/02 1/1/03 1/1/04 1/1/05 1/1/06 1/1/07 1/1/08 1/1/09 1/1/10 1/1/11 1/1/12 1/1/13 1/1/14 1/1/15 1/1/16 1/1/17 1/1/18 1/1/19 1/1/20 1/1/21 1/1/22 1/1/23 1/1/24 1/1/25 1/1/26 1/1/27 1/1/28 1/1/29 1/1/30

293.5 291.9 295.9 308.6 315.7 322.7 334.2 346.3 354.1 359.4 364.1 365.1 367.1 371.4 382.6 393.3 397.7 400.1 406.3 414.5 417.3 424.6 439.7 458.7 470.7 483.5 495.3 499.7 481.8 491.6 501.6 512.2 520.1 527.4 533.8 540.2 546.4 552.5 558.6 564.6 571.1 577.6 584.2 590.9 597.7 603.7 609.8 615.9 622.1 628.4

ZM GRAPHICS • 214-906-4162 • carol@zmgraphics.com In this respect, the greatest source of energy

in the future is finding ways to use energy more efficiently.
Usage: Unlimited within ExxonMobil

(c) 2009, ZM Graphics Inc.

Taking sensible steps to improve energy efficiency is a “triple win” – it saves money, reduces energy demand and curbs CO2 emissions.

Through 2030, the amount of

Improving efficiency at this rate will save a significant amount of energy. Through 2030, ExxonMobil expects global energy demand to grow by an average 1.2 percent. To see how energy efficiency works to curb energy-demand growth, imagine if the world’s economies grew as projected through 2030, but efficiency

energy saved through improved efficiency will be greater than the energy consumed from any single supply source.

12

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Growing global demand
Growing global demand
energy demand in each sector will increase . . .
Quadrillion BTUs
300

By 2030,
. . . but increasing efficiencies will help mitigate growth

power generation

Power Generation

Power Generation

200

Industrial

Residential/ Commercial

40
Transportation Industrial Res/Comm PowerGen

will account for
Data as of 10/28/2009

%
“2005” 89.2 137.2 74.9 169.4

of all energy Transportation Industrial demand.
53.1 101.5

“2030” 121.8 167.5 83.2 255.8 Res/Comm 63.7

Transportation
100

Residential/ Commercial

Industrial

Transportation
0 2005 2030 2005 2030 2005 2030 2005 2030 2030 Energy Savings

Broken down by the four main end-use sectors, the biggest demand for energy comes from electric power generation – a fact that might surprise some people, who may think that transportation is the largest. Transportation is, in fact, in third place behind industrial demand, which represents the energy used for manufacturing, steelmaking and other industrial purposes. Residential/commercial demand is the smallest sector. Power generation is not only the largest energy-demand sector, but also the fastest-growing. Through 2030, this sector represents 55 percent of the total growth in energy demand. The story behind the remarkable increase in demand for energy for power generation is not just the high-tech demands of the developed world, but also the more basic needs and economic growth of the developing world. Non-OECD electricity

demand more than doubles through 2030 and accounts for 80 percent of total growth in electricity demand through 2030. Anyone asking how the world will meet its energy and environmental goals must consider electric power generation; by 2030, this sector alone will account for about 40 percent of total primary energy demand, and its largest energy source will continue to be coal, the fuel with the highest carbon intensity. In each sector, demand would be growing much faster without improvements in efficiency. Efficiency improvements in each sector will add up to significant energy savings each year – reaching 300 quadrillion BTUs in 2030. XOM Energy Outlook
For: GCG Pat Gabriel / Brian Wilburn 817-332-4600 File name: Placed file(s): For page: Updated by:

13A XOMEO-GlblDmnd None 13 Last updated: Carol Zuber-Mallison
(c) 2009, ZM Graphics Inc.

ZM GRAPHICS • 214-906-4162 • carol@zm

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Rising living standards in non-OECD countries will create new demands for energy through 2030.
The Outlook for Energy: A View to 2030 13

Residential/commercial demand
by sector
Quadrillion BTUs
120

Residential /commercial demand
residential
Billion Households
3.0

residential energy use
Millions of BTUs per Household
80

100

Residential

70 2.5 60

OECD

80

2.0 50

60

1.5

40

Non-OECD

Non-OECD
40

30

Commercial

1.0 20

20

0.5 10

OECD
0 2005 2030 2005 2030 0 1980 2005 2030 0 2005 2030 2005 2030

In the residential/commercial sector – the energy we use in our homes and

biomass – fuels like wood and dung – will retain a substantial share of supply, mainly in
Data as of 10/28/2009

businesses – residential demand dominates, the non-OECD. Data as of 11/23/2009 XOM at about three times bigger than commercial. Energy Outlook
“2005” This trend continues as demand “2030” in this Residential 81.7 sector grows through 26.0 2030. Commercial 100.4 36.8
File name:

OECD 14A XOMEO-ResCommDemand.ai “electricity” in the breakdown of demand by Non OECD Placed file(s): None fuel. Electricity, of course, is not a fuel in itself – For page: 14 Last updated: 12/07/2009 Residential energy demand is tied closely Updated by: must be generated by other energy sources it Carol Zuber-Mallison

For: GCG Pat Gabriel / Brian Wilburnsector, we Note: In each 817-332-4600

have included

"2005" 68.4 38.1

"2030" 54.9 33.6

to the total number of households in the

ZM GRAPHICS as coal and natural gas. But it is such • 214-906-4162 • carol@zmgraphics.com
(c) 2009, ZM Graphics Inc.

important

world. Through 2030, we see the number of households rising by 900 million, with nearly 90 percent of that growth occurring in non-OECD countries. OECD countries today use substantially

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to recognize the share of total electricity that is consumed by each end-use sector.

There will be 900 million more households in the world by 2030 – and they will need energy for heating, cooking and appliances.

more energy per household than non-OECD countries. While that remains true in 2030,
120

3000
“2030”

all around the world, households are growing more efficient in their use of energy. Through the steepest decline in energy-per2500

Non OECD OECD
“2005”

80

70

100 2030,

household will come from OECD countries, with 80 more modest rates of improvement in non-OECD nations.
60

60

2000
50

1500

40

A diverse mix of energy is used to meet
40

residential/commercial demand. Natural gas and electricity account for most of the growth in this sector through 2030. But

1000

30

20

20

500
10

14

0

exxonmobil.com
Residential Commercial

0 1/1/801/1/851/1/901/1/951/1/001/1/051/1/101/1/151/1/20 1/1/811/1/861/1/911/1/961/1/011/1/061/1/111/1/161/1/25 1/1/821/1/871/1/921/1/971/1/021/1/071/1/121/1/171/1/30 1/1/831/1/881/1/931/1/981/1/031/1/081/1/131/1/18 1/1/841/1/891/1/941/1/991/1/041/1/091/1/141/1/19

0

OECD

Non OECD

Global transportation demand
by sector
Millions of Oil-Equivalent Barrels per Day
70

Global transportation demand
personal vs. commercial
Millions of Oil-Equivalent Barrels per Day
25

Data fo
1/1/80 1/1/81 1/1/82 1/1/83 1/1/84 1/1/85 1/1/86 1/1/87 1/1/88 1/1/89 1/1/90 1/1/91 1/1/92 1/1/93 1/1/94 1/1/95 1/1/96 1/1/97 1/1/98 1/1/99 1/1/00 1/1/01 1/1/02 1/1/03 1/1/04 1/1/05 1/1/06 1/1/07 1/1/08 1/1/09 1/1/10 1/1/11 1/1/12 1/1/13 1/1/14 1/1/15 1/1/16 1/1/17 1/1/18 1/1/19 1/1/20 1/1/25 1/1/30

Non-OECD
60

Rail Marine Aviation

20

50

OECD Commercial
15

OECD

40

30

Heavy-Duty Vehicles

10

Non-OECD

20 5 10

Light-Duty Vehicles

Personal
0

0 1980

2005

2030

2005

2030

Personal

2005

2030

2005

Commercial

2030

2005

2030

Transportation is one of the fastestgrowing energy demand sectors. It is also the one associated most closely with oil. While, XOM Energy Outlook for example, we can use many different fuels to make electricity, the sameWilburn 817-332-4600 Pat Gabriel / Brian is not true right
For: GCG

but especially in personal vehicles, energy demand is higher in OECD countries today.

But through 2030, we see a of 10/28/2009 Data as significant shift. In the OECD, personal transportation “Personal OECD” File name: 15A XOMEO-TransDemand.aidemand is expected“2005” by 25 percent now for transportation; globally, 98 percent of to drop 15053 “2030” 11283 Placed file(s): None transportation runs on fuel made from oil. through 2030, while non-OECD demand “Comm OECD” For page: 15 Last updated: 12/07/2009 more than doubles. “2005” this? First, Why is 13359 Updated by: Carol Zuber-Mallison Historically, ZM GRAPHICS • 214-906-4162 • carol@zmgraphics.com light-duty vehicles – cars, SUVs vehicle ownership is“2030” tied to personal closely 16825 and light pickup trucks – have been the
Usage: Unlimited within ExxonMobil (c) 2009, ZM Graphics Inc.

THESE DATA POINTS MAY BE IN WRONG ORDER
“Personal Non-OECD” 8529 4017 “Comm Non-OECD” 11219 22953

income, and in OECD economies, vehiclesper-capita is already high. So, better fuel economy over time – enabled by greater penetration of conventional and advanced technologies across the fleet – will more than offset additional demand created by an increase in vehicles per capita. But in non-OECD countries, economic progress will be accompanied by rapid growth in vehicle ownership through 2030. Commercial transportation demand will grow in all regions, but far more rapidly in non-OECD countries. By 2030, these fastdeveloping nations will have overtaken the OECD as the largest source of commercial transportation demand.

largest sub-sector, but that is changing. Through 2030, light-duty demand flattens as more efficient vehicles enter the market. Heavy-duty vehicles (trucks and buses) grow the most, the result of a number of factors, including economic growth and the increased shipment of goods across and between nations, and within local communities. By 2030, heavy-duty vehicles will have become the largest transportation demand segment; aviation and marine transport also grow significantly, reflecting global economic links. We can classify transportation into two basic categories – personal and commercial. In both,

Heavy-duty vehicles such as commercial trucks will soon overtake personal vehicles as the largest source of transportation-related energy demand.
The Outlook for Energy: A View to 2030 15

A single-cell

oil well?

ExxonMobil believes that biofuels from photosynthetic algae could someday play an important role in meeting the world’s growing need for transportation fuels, while also reducing CO2 emissions. In July 2009, we announced a significant new project to research and develop algae biofuels. Our partner is Synthetic Genomics Inc (SGI), a California-based biotech firm founded by genome research pioneer Dr. J. Craig Venter. The goal of the program: to produce a commercially scalable, renewable algae-based fuel compatible with today’s gasoline, diesel and jet fuel. • Why algae? Scientists already know that certain algae naturally produce oils similar to the petroleum products we use today. If commercial quantities of these algae-based oils could be developed, they could avoid the need to build the extensive new delivery infrastructure that some other alternative transportation fuels might require.

• Algae-based biofuels likely would not impact the global food supply. While biofuels made from plants like corn and sugar cane are an expanding energy source, they require fertile land and fresh water; algae can be grown using land and water unsuitable for plant or food production. Algae also could yield between three and eight times more biofuel per acre compared to other biofuel sources. Getting these algae fuels from the lab to broad, commercial scale at the local gas station will be a tremendous undertaking – and could require decades of work. It is an exciting project that brings together SGI’s expertise in genomics, synthetic biology, microbiology and biochemistry; and ExxonMobil’s expertise in transportation fuels and the development of technologies and systems needed to increase scale from concept phase to large-scale manufacturing. ExxonMobil expects to spend more than $600 million on

• Algae-based biofuels have potential environmental advantages. Through photosynthesis, algae absorb CO2 – the main greenhouse gas – and convert it to useful products, like oils and oxygen. As a result, fuels made from algae could reduce greenhouse gas emissions.

this project if research and development milestones are met. ExxonMobil’s investment in algae-based fuels is just one part of our commitment to the breakthrough technologies and integrated solutions that will be needed to address rising demand for transportation fuels and other long-term challenges illustrated in our Outlook for Energy.

16

exxonmobil.com

Personal vehicle fleet is growing
vehicle penetration
In Millions
1500

Personal vehicle fleet is growing
fleet by car type
China Population
1200 1000

Million Cars
Population
1250

Advanced Diesel

Data

900

750

600

Europe OECD Population Population United States Population Population Cars Cars

500

Gasoline Cars Cars Cars Cars
250

300

0

2005

2030

2005

2030

2005

2030

0 2000

2005

2010

2015

2020

2025

2030

To accurately estimate future demand for light-duty transportation fuels, we need to project the number of vehicles that

per-capita will be almost 10 times lower than the United States’, with about eight vehicles Data as of 10/28/2009 for every 100 people.

US 2005 will be on the world’s roads in 2030, and US of the XOM Energy the types of fuels they will use. Personal Outlook the same time, the composition2030 At

231.9 274.6 For: GCG Pat Gabriel / to transportation demand is very sensitive Brian Wilburn 817-332-4600 global vehicle fleet is expectedEurope OECD 2005 218.8 to change Europe File name: 17A XOMEO-CarFleet.ai vehicle fleet size, which we forecast from through 2030. Conventional gasoline OECD 2030 261.5 Placed file(s): None China 2005 19.2 income levels and vehicle penetration. vehicles will continue to be the majority, For page: 17 Last updated: 12/07/2009 China 2030 125.5
ZM GRAPHICS • In the United States, vehicle penetration – 214-906-4162 • carol@zmgraphics.com grow rapidly; we advanced vehicles will Updated by:

Carol Zuber-Mallison
(c) 2009, ZM Graphics Inc.

followed by diesel. Hybrids and other

294.9 344.1 531.8 543.7 1307.8 1475.9

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2025 2030

the number of vehicles relative to population – is quite high, at nearly 80 percent, reflecting the strong correlation between income and vehicle ownership. Europe has a larger population than the United States but a similar fleet size, reflecting a much lower number of vehicles per capita. The picture in other areas can be very different. For example, in China, rising incomes will result in rapid growth in that country’s personal-vehicle fleet through 2030. Yet even in 2030, China’s vehicles-

estimate that by 2030 they will constitute approximately 15 percent of the total personal-vehicle fleet, compared to less than 1 percent today. The expanding market share of hybrids and other advanced vehicles, combined with ongoing improvements to the fuel efficiency of conventional vehicles, will combine to curb growth in energy demand for transportation through 2030.

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China today has only about 27 vehicles per 1,000 people, compared to 780 per 1,000 in the United States. Rising incomes in China and other developing countries will produce strong growth in the number of global vehicles through 2030.
The Outlook for Energy: A View to 2030 17

Improving today’s vehicle
Improving today’s vehicle
improvement in mileage
Percent Improvement in Miles per Gallon

Engine

Transmission

Body and Accessories

Total

0

5

10

15

20

Making vehicles more efficient is a goal of automakers, governments and consumers around the world. Many technologies already have been developed to substantially improve the fuel efficiency of conventional vehicles. These are not far-off innovations; they are available today, and there is a lot of positive news in this area. • Improved engine-based technologies can increase miles per gallon by about 15 percent versus today’s conventional gasoline vehicles. For example, engines can be made more efficient via turbocharging, cylinder deactivation and camless valves.

• For transmissions, increasing to a 6-speed or higher transmission, or to a continuously variable transmission, could increase miles per gallon by another 5 percent to 10 percent. • Potential improvements to the car body and accessories include improving vehicle aerodynamics and reducing vehicle weight through lightweight materials such as plastics. They also include tires that stay inflated longer and higher-efficiency airconditioner compressors. Together, these technologies could produce a 10 percent to 15 percent improvement in fuel efficiency.

18

exxonmobil.com

Aerodynamics Turbocharging

Lightweight Materials

Cylinder Deactivation Improved Tires Camless Valves Continuously Variable Transmission 6 Speed and 7 Speed

Air Conditioning Efficiency

25

30

35

When we combine all these improvements to conventional vehicles, we see an overall potential increase in miles per gallon of about 35 percent. While these technologies are available today, some have not yet been widely utilized because of cost or other issues. We expect, however, that this will change as automakers seek to ramp up fleet efficiencies to meet mandates.

Our view is that compared to hybrids, plugin hybrids or electric vehicles, improvements to conventional vehicles will likely be a more cost-effective approach for improving lightduty vehicle efficiency through 2030. It’s a matter of affordability and scale – making incremental and economical improvements to the millions of conventional cars that make up the vast majority of new-car sales is expected to have a greater overall impact than revolutionary and costly changes in new cars with technologies that as of yet have not proven capable of significantly penetrating the market.

The Outlook for Energy: A View to 2030

19

Thinking outside

the tank

ExxonMobil’s interest in cars and trucks goes far beyond the fuel tank. Using our expertise not only in fuels and lubricants, but also in chemicals and plastics, we are advancing new technologies to make vehicles more fuel efficient. Conventional vehicle efficiency improvements will be a key in reducing the demand for personal transportation fuel demand in the OECD by 2030. Some of our technologies are already on the road. For example: • Working with major tire manufacturers, ExxonMobil developed a new tire-lining technology that uses up to 80 percent less material in the manufacturing process, making tires lighter and keeping them properly inflated. A car with underinflated tires burns up to an extra tank of gasoline every year. • ExxonMobil has developed lightweight plastics for car parts such as bumpers and fuel tanks. Lighter vehicles use less fuel; for every 10 percent drop in vehicle weight, fuel economy improves by 7 percent. ExxonMobil is a leading supplier of polyolefinic polymers used in the manufacture of plastic car parts. • We introduced Mobil 1 Advanced Fuel Economy, a lower-viscosity synthetic motor oil. Lower viscosity means less

energy is required to circulate the oil in the engine. Mobil AFE can improve fuel economy by up to 2 percent versus motor oils most commonly used. These ExxonMobil technologies may not get much notice from drivers, but they can add up to significant fuel savings. For example, if all vehicle tires on the road in the United States retained air pressure as well as tires made with our new technology, it would save more than 700 million gallons of fuel annually. By enabling cars and trucks to travel farther on a gallon of fuel, drivers not only spend less money per mile, they also emit less CO2 per mile. Reducing emissions associated with transportation is one of the key long-term challenges outlined in The Outlook for Energy. In the United States, transportation accounted for 33 percent of all energy-related CO2 emissions in 2008, second only to electric power generation, according to the Department of Energy. In addition to technologies available today, ExxonMobil also is researching advanced engine technologies that could make the internal-combustion engine more efficient, and developing innovations that could advance hybrid and hydrogen-powered vehicles.

20

exxonmobil.com

Global industrial demand
by sector
Quadrillion BTUs
120

Global industrial demand
by region
Quadrillion BTUs
250

by fuel
Quadrillion BTUs
250

Heavy Industry

100

200

200

80 150 60 150

Electricity/ Heat Biomass Coal
100

Chemical Energy Industry
100

Non-OECD

40

Gas

20

Other

50

50

OECD
0 1980 0 1980

Oil

0

2005 2030

2005 2030

2005 2030

2005 2030

2005

2030

2005

2030

The industrial sector is the second-largest demand sector, behind power generation. In 2005, it accounted for nearly 30 percent of global energy usage. XOM Energy Outlook
Pat Gabriel / Brian Wilburn 817-332-4600 Heavy industry and chemicals make up the Placed file(s): For page: For: GCG

2005 to 2030, with China making up about 35 percent of that increase. This is consistent with the robust economic growth and continued industrialization of the developing world.

majority ofFile name: 21A XOMEO-IndustrialDemand.ai industrial demand. These two Meanwhile, OECD industrial energy demand Data as of 12/02/2009 sub-sectors will account for 90 percent of the

None is projected to be down slightly from 2005 "2005" "2030" 21 Last updated: 12/07/2009 growth in industrial demand through 2030, to 2030, Heavy Ind near-term recovery in despite a 79.2 110.7 Updated by: Carol Zuber-Mallison Chem 38.2 54.4 ZM GRAPHICS • 214-906-4162 • carol@zmgraphics.com which is the result of economic expansion, demand following the recession. This decline Energy Ind 36.9 37.6 (c) 2009, ZM Graphics Inc. Other 18.5 concentrated in non-OECD countries. will be driven by several14.4 factors: relatively
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mature economies, ongoing efficiency gains and a decline in heavy manufacturing as a percentage of OECD economies. Broken down by energy type, oil remains the largest industrial fuel through 2030 due to growing non-OECD demand. We see natural gas and electricity gaining share while coal declines, reflecting the shift to less-carbonintensive energy sources.

Data as o Oil 1/1/80 46.8 1/1/81 43.9 1/1/82 42.7 1/1/83 41.9 1/1/84 42.5 1/1/85 42.4 1/1/86 43.5 1/1/87 44.5 1/1/88 45.9 1/1/89 46.4 1/1/90 44.8 1/1/91 45.1 1/1/92 45.3 1/1/93 44 1/1/94 45.1 1/1/95 46.4 1/1/96 47.8 1/1/97 49.2 1/1/98 48.3 1/1/99 49.6 1/1/00 49.9 1/1/01 51 1/1/02 51.4 1/1/03 52.6 1/1/04 54.5 1/1/05 55.2 1/1/06 56.6 1/1/07 56.2 1/1/08 55.2 1/1/09 54.7 1/1/10 55.3 1/1/11 55.9 1/1/12 56.7 1/1/13 57.4 1/1/14 57.9 1/1/15 58.4 1/1/16 58.8 1/1/17 59.2 1/1/18 59.6 1/1/19 59.9 1/1/20 60.3 1/1/25 62.7 1/1/30 65.3

The next largest sub-sector is the energy industry. Here, energy usage stays about flat through 2030, even as demand for the industry’s products is projected to grow substantially. This achievement is the result of ongoing efficiency improvements throughout the industry and a reduction in natural gas “flaring.” Broken down by country group, industrial energy demand increases by nearly 60 percent in non-OECD countries from

The Outlook for Energy: A View to 2030

21

Managing

emissions

ExxonMobil is successfully reducing emissions from its own operations. In 2008, we achieved a global reduction of 10 million metric tonnes of greenhouse gas emissions – about a 7 percent decline from 2007. We reduce emissions by increasing efficiency in our day-today operations, using new energy efficiency technologies and reducing flaring. • Efficiency. Since the launch of our Global Energy Management System in 2000, ExxonMobil has identified opportunities to improve efficiency by 15 percent to 20 percent at our refineries and chemical plants. We have already implemented about 60 percent of these. Over the past several years, efficiency at our refining and chemicals operations has improved at a rate two to three times faster than the industry average. • Cogeneration. ExxonMobil continues to expand its use of cogeneration – a process in which we produce electricity to power our operations while also capturing heat to make steam needed to transform raw materials into consumer products. ExxonMobil is an industry leader in this highly efficient form of energy production, with interest in about 100 cogeneration facilities in more than 30 locations worldwide. In 2008, we added 125 megawatts of power capacity, with the startup of new facilities at our refinery in Antwerp, Belgium. With

new facilities under construction, we expect to increase our cogeneration capacity to more than 5 gigawatts by 2011. • Flare Reduction. Across our operations, we are working to reduce flaring of gas that has no economic outlet as well as gas that is flared as a result of maintenance or unexpected operating events. In 2008, we reduced upstream flaring by about 30 percent, and we plan further reductions of more than 20 percent over the next several years compared to 2008 levels. Since 2004, we have invested more than $1.5 billion in activities to increase efficiency and reduce emissions. We plan to spend at least $500 million more over the next few years. ExxonMobil believes that energy efficiency is the most powerful tool for meeting the central challenge outlined in The Outlook for Energy: how to meet rising demand for energy while also reducing the impact of energy use on the environment. In addition to improving efficiency and reducing emissions at our own operations, ExxonMobil also is developing technologies to help consumers do the same. This is important because while about 10 percent of petroleumrelated greenhouse gas emissions are from industry operations, 90 percent are from consumer use of petroleum.

22

exxonmobil.com

Data as of 10/28/2

Electricity use is growing rapidly
by sector
Thousands of Terrawatt Hours
30

Electricity use is growing rapidly
by region
Thousands of Terrawatt Hours
30

by generation
Thousands of Terrawatt Hours
30

Transportation
25 25 25

20

Other Industry Heavy Industry

Other
20 20

Other Asia Pacific
15 15

15

China
10 10

Commercial

Non-OECD

Other Asia Pacific Europe

10

5

5

5

Residential
0 1980 0 1980

OECD United States
2030 2005 2030 0 1980 2005

2005

Pat Gabriel / Brian next 25 years as Wilburn 817-332-4600 continue living standards File name:

demand sector and the fastest-growing,
Usage: Unlimited within ExxonMobil

generation is a complex task with many consider how these fuels will compete

percent a year and will account for about 40 percent of all energy demand, up from 36 percent in 2005 and 26 percent in 1980. This will support strong increases in global electricity demand, which will be about four times higher than 1980. Electricity demand rises at a much faster rate in non-OECD countries, reflecting their faster economic growth and relatively low electricity penetration to date. What fuels will be used to generate this electricity? Through 2030, there is a shift away from coal toward natural gas, as well as to nuclear and renewable fuels. This will be driven by environmental policies, including

economically, because these are the real-life factors that utilities and power generators look at when considering which fuels to use or what types of new power plants to build.
By 2030, about 40 percent of the world’s electricity will be generated by nuclear and renewable fuels.

1/1/80 1/1/81 1/1/82 1/1/83 1/1/84 1/1/85 1/1/86 1/1/87 1/1/88 1/1/89 1/1/90 1/1/91 1/1/92 1/1/93 1/1/94 1/1/95 1/1/96 1/1/97 1/1/98 1/1/99 1/1/00 1/1/01 1/1/02 1/1/03 1/1/04 1/1/05 1/1/06 1/1/07 1/1/08 1/1/09 1/1/10 1/1/11 1/1/12 1/1/13 1/1/14 1/1/15 1/1/16 1/1/17 1/1/18 1/1/19 1/1/20 1/1/25 1/1/30

rising at an average of approximately 1.7

variables. As part of this process, we must

Renew 1554.3 1598.6 1639 1710.7 1780.6 1804.2 1846.8 1860.5 1925.7 1937.8 1995.2 2043.1 2051.2 2156 2185.6 2289.4 2326.3 2370.7 2384.2 2409.2 2479.7 2460 2529.1 2569.9 2737.6 2865.5 3001.4 3091.6 3253.2 3256.6 3402.5 3548.2 3719 3884.4 4053.9 4220 4391 4565.6 4748.6 4928.2 5115.5 5919.5 6754.2

ZM GRAPHICS • 214-906-4162 • carol@zmgraphics.com Power generation is the largest energy(c) 2009, ZM Graphics Inc.

Projecting the future mix of fuels for power

Nuclr 635.7 753.7 812.9 922.1 1123.8 1328.5 1431.1 1557 1693 1707.8 1734.1 1825.3 1837.3 1888.5 1935.4 2008.5 2081.4 2067.7 2106.9 2183.6 2235 2299.4 2304.6 2288.1 2371.4 2394.3 2419.1 2378.5 2377.9 2398.4 2444.1 2523.2 2599.5 2666.1 2751.5 2816.9 2887.8 2980 3063 3151.2 3240.3 3790.5 4338.9

23A XOMEO-ElectricityUse.ai Placed file(s): None access to 23 electricity. Last updated: 12/07/2009 For page: Updated by: Carol Zuber-Mallison

By 2030, we expect that 40 percent of the world’s electricity will be generated by nuclear and renewable fuels.

Oil 1302.4 1256.3 1163.9 1131.5 1106.1 1003.8 1016.6 995.7 1025.1 1004.1 1181 1015 981 924.2 933.3 1057.1 1046.8 1058.8 1079.6 1059.1 1022.9 1001.2 992 999.5 1020.8 1026.5 967.2 960.1 945.4 838.9 846.7 851.2 847.8 853.5 860.8 873.6 879.5 885.2 890.3 893.3 893.2 933.2 978.4

to improve worldwide and more people gain

Coal 2664.7 2708 2761.5 2878.7 2982 3116.3 3205.1 3390.7 3498.5 3556.8 3805.4 3920.2 3977.8 4053.6 4174.6 4287 4488.9 4621.5 4700.1 4818.1 5164 5217.8 5438.4 5821.7 5998.3 6344.1 6718.6 7158 7218.8 6793.3 6935.8 7125.2 7342.8 7490.9 7598.8 7718.6 7815.4 7882.2 7950.2 8018.5 8081.1 8449.6 8815.8

used for power generation, is a major trend XOM Energy Outlook of the last 25 years, and will remain so for the
For: GCG

putting a cost on carbon emissions.

Gas 887.4 915.4 944.7 987.2 1098.9 1164.7 1212 1313.7 1371.3 1524.6 1488 1519.6 1529.6 1570.5 1636.2 1722.8 1780.7 1919.5 2042 2238.4 2323 2475.4 2616.8 2752.3 2947.1 3109.8 3247.3 3541.6 3633.3 3584.4 3790.8 3972.1 4182.1 4347.6 4503.7 4645.2 4826.4 5007.6 5192.4 5380 5581.3 6590.7 7643.8

Is unit correct?? Growing demand for electricity, and the fuels

ones that seek to reduce emissions by

The Outlook for Energy: A View to 2030

1/1/80 1/1/81 1/1/82 1/1/83 1/1/84 1/1/85 1/1/86 1/1/87 1/1/88 1/1/89 1/1/90 1/1/91 1/1/92 1/1/93 1/1/94 1/1/95 1/1/96 1/1/97 1/1/98 Gas Coal Oil Nuclear 40% Renewables
2030

Res 1740 1788 1846 1929 2023 2102 2187 2294 2379 2456 2591 2692 2756 2902 2996 3104 3239 3293 3427 1/1/80 1/1/81 1/1/82 1/1/83 1/1/84 1/1/85 1/1/86 1/1/87 1/1/88 1/1/89 1/1/90 1/1/91 1/1/92 1/1/93 1/1/94 1/1/95 1/1/96 1/1/97 1/1/98 1/1/99 1/1/00 1/1/01 1/1/02 1/1/03 1/1/04 1/1/05 1/1/06 1/1/07 1/1/08 1/1/09 1/1/10 1/1/11 1/1/12 1/1/13 1/1/14 1/1/15 1/1/16 1/1/17 1/1/18 1/1/19 1/1/20 1/1/25 1/1/30
23

Com 1218 1279 1354 1414 1488 1583 1671 1768 1851 1935 2026 2116 2165 2248 2344 2437 2544 2657 2764

Electricity generation cost
U.S. baseload plants, startup 2025

Electricity generation cost

“Baseload plants” are electric power plants that run continuously to meet minimum electricity demand requirements while peaking power plants run intermittently to meet seasonal and daily peak electricity demand.

Cost per Kilowatt Hour in 2009 Cents
20 20 20

XOM
At $60 per Ton

No CO2 Cost
15 15

At $30 per Ton

For: GC Pa

File nam 15

Placed f

For page

Updated 10 10 10

ZM GR

Usage: U

5

5

5

0

Coal

Gas Nuclear Wind* Coal/ Gas/ Solar* CCS** CCS**

0

Coal

Gas Nuclear Wind* Coal/ Gas/ Solar* CCS** CCS**

0

Coal

Gas Nuclear Wind* Coal/ Gas/ Solar* CCS** CCS**

* Wind and solar exclude additional costs for intermittency and transmission investments

** With carbon capture and storage technology

In the United States, absent any policies that impose a cost on CO2 emissions, we would expect coal and natural gas to be the lowest-cost options for future, new-build power plants.

Carbon capture and storage (CCS), a process in which CO2 emissions are captured before they can enter the atmosphere, holds promise in the future. Nuclear 7.16 1.26 7.16 1.26 7.16 1.26 Wind 6.59 1.84 6.59 1.84 6.59 1.84 Coal + CCS 9.21 2.2 9.49 2.2 9.77 2.2

However, even with CO2 emissions priced Data as of 10/28/2009 at $60 per ton, new-build plants with CCSGas Coal Low, no CO2 2009cents/kWh 4.71 remain challenged and very expensive – 5.48 But policies that impose a cost on carbon 2009cents/kWh 1.82 1.84 meaning a less affordable source of would sway these economics. Delta, being Coal, no CO2 30$/ton electricity for consumers. This high cost, the most carbon-intensive fuel, would Low, with CO2 2009cents/kWh 7.08 6.54 combined with the need to build a regulatory increase in price more than natural gas. Delta, with CO2 2009cents/kWh 1.82 1.84 gas would framework for CO2 storage, presents At $30 per ton of CO 2, natural 60$/Ton become the most economic alternative for Low, with CO2 significant challenges for its use over the 7.6 2009cents/kWh 9.46 Delta, with 2009cents/kWh 1.82 new-build power plants. This is where weCO2 next two decades beyond government- 1.84 expect CO 2 costs may evolve over the next 10 years. Likewise, solar energy faces significant As the CO2 price increases, we would expect to see fuel switching from coal to natural gas. This will happen by running existing natural gas plants at higher load factors, as well as by building new natural gas plants and retiring old coal plants. At $60 per ton, natural gas is still very competitive. In addition, nuclear and wind are now competitive, which is why we include strong growth for both in our Outlook.
Climate policies that put a “cost” on CO2 emissions will shift the economics of fuels used for power generation. Natural gas, nuclear and wind stand to benefit.
24 exxonmobil.com

G 8 2

8 2

8 2

subsidized demonstration projects.

hurdles to becoming economically competitive in this time frame. The cost of capturing solar energy in photovoltaic cells or concentrators remains generally unaffordable for large, commercial applications.

Data fo

Global energy demand and supply
by sector
Quadrillion BTUs
700

Global energy demand and supply
by energy type
Quadrillion BTUs
700

Wind, Solar, Biofuels Hydro, Geo
600 600

500

Residential/ Commercial Industrial

Biomass
500

Nuclear Coal

400

400

300

Transportation

300

Gas
200

200

100

Power Generation

100

Oil

0 1980

2005

2030

0 1980

2005

2030

1/1/80 1/1/81 1/1/82 1/1/83 1/1/84 1/1/85 1/1/86 1/1/87 1/1/88 1/1/89 1/1/90 1/1/91 1/1/92 1/1/93 1/1/94 1/1/95 1/1/96 1/1/97 1/1/98 1/1/99 1/1/00 1/1/01 1/1/02 1/1/03 1/1/04 1/1/05 1/1/06 1/1/07 1/1/08 1/1/09 1/1/10 1/1/11 1/1/12 1/1/13 1/1/14 1/1/15 1/1/16 1/1/17 1/1/18 1/1/19 1/1/20 1/1/25 1/1/30

O 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 2

picture is clear: Expansion and progress, particularly in non-OECD countries, will boost the need forXOM Energy Outlook sectors – energy in all four end-use
For: GCG power generation, transportation, industrial Pat Gabriel / Brian Wilburn 817-332-4600

of total energy.

To satisfy projected increases in global energy

Placed file(s): None significant gains in efficiency, this will stack up to For page: Updated by:

Last updated: 12/07/2009 a significant increase in global energy demand social, economic and environmental challenges –

to 2030 – an average 1.2214-906-4162 • year. we ZM GRAPHICS • percent a carol@zmgraphics.comwill need to expand all economic fuel sources
(c) 2009, ZM Graphics Inc.

25 Carol Zuber-Mallison

affordable energy to help meet our interlocking

What types Usage: Unlimited within ExxonMobil to meet this of supplies will we use rising need for energy through 2030? Fossil fuels – oil, natural gas and coal – will continue to meet most of the world’s needs during this period, because no other energy sources can match their availability, versatility, affordability and scale. The fastest-growing of these fuels will be natural gas, because 700 it is the cleanest-burning. By 2030, global demand for natural gas will be more than 600 55 percent higher than it was in 2005. realize that energy already is a high-tech

Technology will play a key role. Many do not industry. New innovations and improvements in energy technology continue to advance the potential for all sources of energy.
ExxonMobil scientists and engineers use 3-D seismic technology to locate oil and natural gas deposits with greater accuracy and a smaller environmental footprint.

Res/Comm Industrial Transportation PowerGen

700

600

500 Nuclear power will also grow significantly to
support increasing needs for power generation.

500

400

400

Wind, solar and biofuels will grow sharply

300 through 2030, at nearly 10 percent per year on
average. However, because they are starting from a small base, their contribution by 2030

300

200 100

200
The Outlook for Energy: A View to 2030 25

100

1/1/80 1/1/81 1/1/82 1/1/83 1/1/84 1/1/85 1/1/86 1/1/87 1/1/88 1/1/89 1/1/90 1/1/91 1/1/92 1/1/93 1/1/94 1/1/95 1/1/96 1/1/97 1/1/98 1/1/99 1/1/00 1/1/01 1/1/02 1/1/03 1/1/04 1/1/05

through 2030.

PowerGen Trans 76.2 51.9 77.8 51.6 78.8 51.5 82.2 52.1 86.9 53.6 91.1 54.7 94.2 56.8 98.9 58.8 103.2 61.4 108.1 63.1 117.9 64.2 121.1 64.9 122.3 66.2 123.5 67.1 124.8 68.6 127.6 70.5 131.8 72.2 133.4 73.9 136.4 75.8 139.4 77.9 143.3 79.4 146 79.8 149.4 81.5 155.3 83.4 163.2 87.1 169.4 89.2

File name: 25A XOMEO-TransDemand.ai demand to 2030 – and ensure reliable and and residential/commercial. Even assuming

Ind 110.1 106.3 103.6 103.4 108.1 108.8 110.2 114.1 117.9 118.9 113.1 112.7 111.6 109.9 112.1 117.4 119.5 121.7 120.7 120.1 121.9 120.9 122.5 127.7 134.2 137.2

No single fuel can meet our energy challenges.

Data for left chart as of 10/28/2009

Res/Comm 58.1 57.7 57.9 58.1 59.9 61.1 61.5 62.4 63.7 64 64.1 65.4 65 66.6 65.8 67.1 69.8 68.7 67.3 69 69.8 70.6 71.1 73.3 74.2 74.9

Through 2030, the global energy-demand

will remain relatively small at about 2.5 percent

Global energy demand and supply
Global energy demand and supply
Oil and natural gas
Annual Energy Savings NonOECD

demand and supply
Quadrillion BTUs
300

remain essential through 2030,
Data as of 10/28/2009 By Fuel "2005" Oil 171.1 important “fuel” Coal 112.3 Gas 100.4 of all will be 45.1 Biomass Nuclear 28.6 Hydro, Geo saved 11.8 energy Wind, Solar, Biofuels 1.5 Total Energy Growth through improved Energy Savings

250

Oil Average Growth Rate Per Year 0.8% Gas 1.8% Total Energy Growth

but the most

200

150

Coal 0.5% OECD

"2030" 206.9 127 156.9 51.2 50.9 20.1 15.4 157.6

100

50

Biomass 0.5%

Nuclear 2.3% Hydro, Geo 2.2%

NonOECD Wind, Solar, Biofuels 9.6%
2005 2030 2005-2030 2030

efficiency.

0

2005 2030

2005 2030

2005 2030

2005 2030

2005 2030

2005 2030

Today, fossil fuels provide the majority of the world’s energy, led by oil and then coal and natural gas. Biomass and nuclear come next, followed by hydroelectric and geothermal power. Wind, solar and biofuels combine for a very small share.

Total global energy demand through 2030 is expected to rise by about 160 quadrillion BTUs. All of this growth will occur in nonOECD countries; OECD demand is expected to be slightly lower in 2030 versus 2005. Through 2030, the most important “fuel” XOM Energy Outlook
File name: Placed file(s): For page: Updated by:

For: GCG Pat Gabriel / Brian Wilburn 817-332-4600

In 2030, fossil fuels remain the predominant energy sources, accounting for nearly 80 percent of demand. Oil still leads, but natural gas moves into second place on very strong growth of 1.8 percent a year on average, particularly because of its position as a favored fuel for power generation. Other energy types – particularly nuclear, wind, solar and biofuels – will grow sharply, albeit from a smaller base. Other reputable sources, including the U.S. government’s Energy Information Administration and the International Energy Agency, share a similar view of this supply picture.

of all will be the energy saved through improvements in energy efficiency. Energy saved through efficiency gains will reach about 300 quadrillion BTUs per year by 2030, which is about twice the growth in global energy demand through 2030. Most of the energy saved through efficiency will be in OECD countries.

ZM GRAPHICS • 214-906-4162 • carol@zmgra
(c) 2009, ZM Graphics Inc.

26A XOMEO-GlblDmndSu None 26 Last updated: 12 Carol Zuber-Mallison

Usage: Unlimited within ExxonMobil

ExxonMobil has partnered with the National Community Action Foundation to help low-income Americans save money and energy by weatherizing their homes through the U.S. Department of Energy’s Weatherization Assistance Program.

26

exxonmobil.com

The importance of

natural gas

Natural gas will provide a growing share of the world’s energy through 2030. Affordable and abundant, natural gas can help provide the energy needed for economic and social progress. And because it burns cleaner than oil and much cleaner than coal, natural gas is a powerful tool for reducing the environmental impact of energy use. ExxonMobil produces more natural gas than any other public company in the world. We also develop breakthrough natural gas technologies that make more of this cleanerburning fuel available to consumers around the world. In the United States, ExxonMobil technologies have unlocked vast new resources of natural gas that previously were trapped in dense rock formations, as well as other types of so-called “unconventional” natural gas. These technologies have resulted in a significant upswing in U.S. natural gas production, and may have similar applications in other parts of the world. • Our Multi-Zone Stimulation Technology (MZST) allows operators to create fractures in reservoir rock at a more rapid rate than conventional technology so gas can flow more easily. Using MZST and our Fast Drill Process, ExxonMobil is increasing recovery and production rates while reducing development costs and our environmental footprint. • ExxonMobil has joined with Qatar Petroleum and other partners to further develop Qatar’s North Field, the largest non-associated natural gas field in the world. There, we plan to develop natural gas resources exceeding 150 trillion cubic feet, which will serve a global customer base. Liquefied Natural Gas (LNG): ExxonMobil is a global leader in developing and delivering advanced LNG technologies. These breakthroughs are creating a “global gas market” that can link the world’s largest natural gas reserves, such as those in Qatar, with consumers who need them. • ExxonMobil helped pioneer a new class of LNG carriers. These ships, called Q-Max, can carry up to 80 percent more Natural gas used for electricity can reduce CO2 emissions by up to 60 percent versus coal, which today is the most popular fuel for power generation. It also has fewer emissions of sulfur oxides and nitrogen oxides. The most significant single use of natural gas is as a fuel to make electricity. As The Outlook for Energy shows, the world’s need for electricity – and the fuels used to produce it – will grow substantially over the coming decades. Natural gas can help meet this growing need for electricity. • ExxonMobil, together with its partners, is producing nearly 35 million tons per year of LNG. We anticipate increasing our joint production to almost 65 million tons per year by 2010. And beyond 2010, we expect this to go up to around 100 million tons per year. • We are building state-of-the-art LNG receiving terminals in the United State and Europe. In 2009, off the coast of Italy, we opened the world’s first offshore gravity-based structure for unloading, storage and re-gasification of LNG. The terminal’s main structure rests on the seabed in 95 feet of water, about 10 miles offshore, and out of sight of land. cargo than conventional LNG carriers, reducing transportation costs while improving efficiency and reducing emissions.

The Outlook for Energy: A View to 2030

27

Global liquids supply grows
Global liquids supply grows
global liquids supply and demand
Millions of Oil-Equivalent Barrels per Day
120 1/1/80 1/1/81 1/1/82 1/1/83 1/1/84 1/1/85 1/1/86 1/1/87 1/1/88 1/1/89 1/1/90 1/1/91 1/1/92 1/1/93 1/1/94 1/1/95 1/1/96 1/1/97 1/1/98 1/1/99 1/1/00 1/1/01 1/1/02 1/1/03 1/1/04 1/1/05 1/1/06 1/1/07 1/1/08 1/1/09 1/1/10 1/1/11 1/1/12 1/1/13 1/1/14 1/1/15 1/1/16 1/1/17 1/1/18 1/1/19 1/1/20 1/1/21 1/1/22 1/1/23 1/1/24 1/1/25 1/1/26 1/1/27 1/1/28 1/1/29 1/1/30

OPEC and non-OPEC sources will combine to meet an expected

100

2030 Adds ~37 ~34 Liquids Demand ~28 ~27 OPEC Crude Biofuels Other Petroleum Canada Oil Sands 2005 Supplies

OPEC NonOPEC

80

60

24
increase demand.

40

20

Non-OPEC Crude and Condensate

0 1980

1990

2000

2010

2020

2030

Base/Adds

The world’s liquid fuel supply consists mostly of crude oil, but also includes condensate, natural gas liquids and biofuels. Liquid fuels will be especially important for meeting XOM growth Outlook projected strong Energyin transportation
Pat Gabriel Nearly all the world’s demand through 2030./ Brian Wilburn 817-332-4600 Placed file(s):None For page: For: GCG

Total liquids supply needed in 2030 is about 20 MBDOE above 2005. This increase will be met by non-OPEC and OPEC liquids in nearly equal share.

File transportation name: on liquid fuels because runs 28A XOMEO-LiquidsSupplyGrows.ai Meeting this demand in an economic

they provide a large quantity of energy in
28

small volumes, making them easy to transport Updated by: Carol Zuber-Mallison
(c) 2009, ZM Graphics Inc. Usage: Unlimited within ExxonMobil

Last updated:

12/07/2009

and environmentally sound manner is an ongoing task of the global energy industry. yields from mature fields as they naturally decline, and develop new sources of supplies in existing development areas as well as promising new regions.

C+C 34646 35378 36375 37203 38733 39029 39005 39371 39285 38395 38533 38072 36952 36070 36627 36968 37942 38581 38684 38672 39493 39966 40829 41492 41847 41660 41455 41520 41053 40851 40472 40106 39724 39462 39320 39159 39439 39716 39846 40176 40401 40825 41067 41160 41283 41354 41468 41578 41624 41573 41681

Through 2030,

in liquid fuels

Sands 163 146 165 217 193 255 315 334 369 374 344 350 363 376 396 428 443 526 590 568 608 659 741 867 1002 1002 1160 1215 1222 1250 1300 1400 1430 1510 1550 1650 1860 2010 2140 2310 2440 2600 2720 2860 2970 3110 3270 3430 3590 3740 3880

Cond. 4834 5054 4997 5139 5164 5215 5370 5640 5963 6107 6108 6281 6625 6963 7277 7674 7995 8202 8378 8738 9253 9409 9711 9910 10501 11011 11102 11405 12018 12575 13175 13870 14333 14669 15007 15206 15465 15660 15924 16112 16401 16573 16762 16985 17204 17584 17852 18085 18284 18451 18648

%

Biofuels 51 57 82 107 149 164 152 168 172 175 177 185 188 197 213 220 199 205 211 220 213 233 271 335 380 442 587 754 1012 1085 1234 1310 1389 1461 1534 1612 1661 1712 1767 1824 1885 1954 2029 2111 2201 2299 2406 2525 2659 2811 2984

1/1/80 1/1/81 1/1/82 1/1/83 1/1/84 1/1/85 1/1/86 1/1/87 1/1/88 1/1/89 1/1/90 1/1/91 1/1/92 1/1/93 1/1/94 1/1/95 1/1/96 1/1/97 1/1/98 1/1/99 1/1/00 1/1/01 1/1/02 1/1/03 1/1/04 1/1/05 1/1/06 1/1/07 1/1/08 1/1/09 1/1/10 1/1/11 1/1/12 1/1/13 1/1/14 1/1/15 1/1/16 1/1/17 1/1/18 1/1/19 1/1/20 1/1/21 1/1/22 1/1/23 1/1/24 1/1/25 1/1/26 1/1/27 1/1/28 1/1/29 1/1/30

ZM GRAPHICS and widely available. • 214-906-4162 • carol@zmgraphics.com require large investments to maximize It will

New technologies – such as floating offshore platforms that can reach crude oil located
Base/Adds 2005 Base 84130 Non OPEC 8594 OPEC 11463

Through 2030, total liquids demand increases steadily to 104 MBDOE – about 24 percent higher than in 2005. To meet this demand, non-OPEC supplies are projected to grow to about 67 MBDOE, including about 3 MBD from biofuels. Gains also are expected in “other” non-OPEC petroleum, which includes natural gas liquids, condensate, gas-to-liquids, coal-to-liquids and refinery gains. The gap between non-OPEC supplies and total liquids demand – known as the “call on OPEC crude” – remains relatively flat in the near term, but then expands to 37 MBDOE in 2030. This level is achievable, given OPEC’s large resource base and continued investment.
28 exxonmobil.com

under thousands of feet of water – are helping meet rising global demand for oil.

Natural gas supply and demand balance
United States
Billions of Cubic Feet per Day
120

Natural gas supply and demand balance
Europe
Billions of Cubic Feet per Day
120

Asia Pacific
Billions of Cubic Feet per Day
120

Data as o
Conv 46.58 42.34 43.58 41.16 39.34 36.72 34.9 36.2 35.17 30.89 30.41 30.13 27.96 27.07 26.16 25.26 24.43 23.66 22.93 22.24 23.81 23.84 24.43 23.98 23.41 22.87 22.37 21.89 21.44 21 20.58

100

100

100

80

80

80

LNG Imports

LNG
60

Imports
60

Pipeline Unconventional

LNG

60

Pipeline

40

40

Pipeline Unconventional

Imports

40

Unconventional

20

Local Production Conventional

20

20

Conventional

Local Production

Conventional
0 2000 2010 2020

Local Production
0 2000 2010 2020 2030

0 2000

2010

2020

2030

2030

Uncon 8.28 9.17 10.24 11.05 12.17 13.3 14.56 17.66 20.24 21.26 20.67 21.07 22.78 24.91 27.08 29.35 31.73 33.79 35.33 36.56 37.44 38.02 38.4 38.64 38.86 39.1 39.34 39.57 39.8 40 40.2

Natural gas will meet a growing share of our energy needs through 2030. Given its XOM Energy Outlook abundance and properties as a clean-burning
Pat Gabriel fuel, expanded use of/ Brian Wilburn 817-332-4600 natural gas in power File name: For: GCG

In Europe, local natural gas production continues to decline, driving imports from about 45 percent of total supply in 2005 to about 70 percent in 2030. This shift will

29A XOMEO-GasSplyDmndBalance.ai require growth in pipeline imports from Russia Placed file(s): None help advance environmental goals as well. and Caspian countries as well as LNG. For page: 29 Last updated: 12/07/2009 Updated by: Carol Zuber-Mallison

generation can serve economic progress and

ZM Total natural GRAPHICS • 214-906-4162 •United gas demand in the carol@zmgraphics.com In Asia Pacific, domestic natural gas (c) 2009, ZM Graphics Inc.

States and Europe will follow a similar
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production – unconventional in particular – continues to climb, but at a slower pace than demand. As a result, Asia Pacific will need to rely more heavily on gas imports, especially LNG, which will meet more than one-third of the region’s demand in 2030.
ExxonMobil and Qatar Petroleum’s Q-Flex and Q-Max ships are fostering a new “global gas market” that can link the world’s largest natural gas reserves with the consumers who need them.

pattern – dipping in the near term because of the recession, and then growing modestly through 2030. Growth averages about 0.8 percent per year. Asia-Pacific demand grows much more rapidly, at almost 4 percent per year, with demand more than doubling over the outlook period. In terms of supply, an important development has been the expansion of unconventional natural gas – the result of recent improvements in technologies used to tap these hard-toreach resources. This is particularly the case in the United States, where it is expected to satisfy more than 50 percent of demand by 2030. The growth in unconventional supplies will moderate the need for liquefied natural gas (LNG) imports in the United States in the short term.

The Outlook for Energy: A View to 2030

29

Chart of left, Data

Global energy demand and CO2 emissions
Global energy demand and CO2 emissions
energy supply
Quadrillion BTUs
700

CO2 emissions by sector
Billion Tons
40

CO2 emissions by fuel
Billion Tons
40

600

1.2% Average Growth per Year 2005 – 2030 Other
30

0.9% Average Growth per Year 2005 – 2030 Residential/ Commercial Transportation
20 20 30

500

400

Gas

300

Industrial Oil
10 10

200

100

Power Generation Coal

0 1980

2005

2030

0 1980

2005

2030

0 1980

Rising emissions of CO2 and other greenhouse gases pose significant risks to society and ecosystems. Since most of these emissions are energy-related, any integrated approach XOM Energy Outlook to meeting For: GCG the Pat Gabriel /growing energy needs world’s Brian Wilburn 817-332-4600

share as fuels for power generation. Natural gas used for power generation can result in up to 60 percent less CO2 emissions than coal, currently the most widely used fuel for power generation. Broken down by end-use sector, power
Gas 3123 3086 3060 3079 3302 3400 3457 3622 3770 3974 4020 4169 4153 4211 4230 4368 4580 4667 4703 4856 4970 5004 5147

File name: 30A must incorporate over the coming decadesXOMEO-DemandCO2.ai Placed file(s): None strategies to curb emissions and address the For page:

risk of climate change. These strategies will
Updated by:

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the fastest-growing demand sector, but also because it is the one that relies most heavily on coal.

Global CO2 emissions will rise by

The outlook for energy-related CO2 emissions is linked directly to the types and amounts of energy required around the world. By 2030, global CO2 emissions are likely to be about 25 percent higher than they were in 2005. While this is a significant increase, it is substantially lower than the projected growth in energy demand over the period. This positive development is the result of expected gains in efficiency, as well as a shift over time to a significantly lesscarbon-intensive energy mix – mainly natural gas, nuclear and wind gaining

0.9 percent a year through 2030, with emissions growing fastest in the power-generation sector.

30

exxonmobil.com

1/1/80 1/1/81 1/1/82 1/1/83 1/1/84 1/1/85 1/1/86 1/1/87 1/1/88 1/1/89 1/1/90 1/1/91 1/1/92 1/1/93 1/1/94 1/1/95 1/1/96 1/1/97 1/1/98 1/1/99 1/1/00 1/1/01 1/1/02

non-OECD countries.

(c) 2009, ZM Graphics Inc.

through 2030. This is not only because it is

Coal 6923 6941 6966 7145 7446 7677 7736 8084 8344 8467 8527 8463 8315 8325 8381 8719 8870 8844 8799 8639 8883 8948 9149

share of the growth in CO2 emissions need to be implemented by both OECD and ZM GRAPHICS • 214-906-4162 • carol@zmgraphics.com

30 Last updated: 12/07/2009 generation accounts for the largest Carol Zuber-Mallison

Oil 8566 8223 7982 7922 8000 7961 8185 8298 8574 8676 8787 8805 8859 8850 8925 9029 9215 9357 9460 9614 9636 9700 9740

1/1/80 1/1/81 1/1/82 1/1/83 1/1/84 1/1/85 1/1/86 1/1/87 1/1/88 1/1/89 1/1/90 1/1/91 1/1/92 1/1/93 1/1/94 1/1/95 1/1/96 1/1/97 1/1/98 1/1/99 1/1/00 1/1/01 1/1/02 1/1/03 1/1/04

Coal 70.3 70.4 70.7 72.5 75.5 77.8 78.4 81.9 84.6 85.8 86.2 85.6 84 84.1 84.7 88.2 89.7 89.4 89 87.3 89.7 90.3 92.4 99.2 107

Oil 128.1 123.5 120.5 120 122.1 121.9 125.5 128.2 132.8 134.7 136.6 137.6 139.1 138.8 141 144.2 147.8 150.8 152 155.4 156.4 157.7 159.3 162.6 168.3

0.9% Average Growth per Year 2005 – 2030 Gas

Oil

Coal

2005

2030

Options for

carbon policy

ExxonMobil believes that the broad objective of actions to address climate change should be to reduce the risk of serious impacts on society and the environment, while not harming the contribution of energy to economic development and expanded prosperity around the world. As a company with 125 years of experience developing the technology and infrastructure that delivers the world’s energy, we believe we have a unique perspective on what types of conditions are necessary to successfully tackle such a complex global energy challenge.

encourages companies to invest in advanced technologies, and provides a clear incentive for all consumers to increase efficiency and reduce emissions. • A carbon tax avoids the costs and complexity of having to build a new market for emissions allowances or the need for new layers of regulators and administrators to manage this market. It also does not open up significant opportunities for market manipulation, or require complex and costly compliance and enforcement systems. • A carbon tax can be made revenue-neutral. Returning

Above all, companies, consumers and investors will need a market environment that provides clear signals to encourage sensible and broad-based investment in the two most powerful emissions-fighting tools: improvements to energy efficiency and the expanded use of lower-carbon fuels such as natural gas. Continued progress on these fronts will require trillions of dollars in new investment, and steadfast work on the creation of new technologies. Some governments are considering policies that would impose a “cost” on CO2 emissions. In these cases, ExxonMobil believes that a revenue-neutral carbon tax has many advantages over a cap-and-trade system in terms of achieving our society’s shared goal of reducing emissions over the long term: • A carbon tax can create a clear and uniform cost for emissions in all economic decisions. This price stability

the tax revenue to consumers through reductions in other taxes – payroll taxes or a simple dividend – reduces the burden on the economy, and ensures that government policy is specifically focused on reducing emissions, not on becoming a revenue stream for other purposes. • Because global participation is so important to controlling emissions, a carbon tax may be a more viable framework for engaging participation by other nations. As The Outlook for Energy shows, curbing greenhouse gas emissions while also meeting rising energy demand will require a tremendous global effort, sustained over decades. Compared with a cap-and-trade system, a carbon tax – by being predictable, transparent, and comparatively simple to understand and implement – is a more effective approach for creating the conditions necessary to achieve emissions-reduction goals.

The Outlook for Energy: A View to 2030

31

CO2 emissions
CO2 emissions
Billion Tons
40

CO2 emissions
emissions per capita
Tons per Person
12

emissions per GDP
2.0

Tons per Thousand Dollars of GDP in 2005 Dollars

OECD

10 30 8 1.5

Non-OECD

Non-OECD
20 6 1.0

4 10 2

Non-OECD
0.5

OECD

OECD
0 1980 2005 2030 0 2005 2030 2005 2030 0 2005 2030 2005 2030

Reducing emissions is a global priority. Yet because different countries are at different

higher per-capita energy use in that country group. By 2030, this gap shrinks, but remains significant – at about two and a half times higher.
Data as of 10/28/2009 OECD Non OECD "2005' 11.26 2.7 "2030" 8.76 3.41 Data as of 10/28/2009 OECD Non OECD "2005" 0.4083 1.5554 "2030" 0.2159 0.7719

Please check units stages in their economic development,
For: GCG

CO2 emissions patterns through 2030 vary XOM Energy Outlook greatly between OECD and non-OECD country groups. Gabriel / Brian Wilburn 817-332-4600 Pat
File name:

When emissions are measured per unit of

32A XOMEO-CO2Emissions.ai economic output, however, OECD nations Placed file(s): None Growth in CO2 emissions through 2030 have much lower levels. This is because For page: 32 Last updated: 12/07/2009 will be dominated by China, India and the developed nations have relatively productive Updated by: Carol Zuber-Mallison

other non-OECD countries. Non-OECD economies and are less energy-intensive. By ZM GRAPHICS • 214-906-4162 • carol@zmgraphics.com emissions surpassed OECD emissions in
Usage: 2004; by 2030, Unlimited within ExxonMobil non-OECD countries will (c) 2009, ZM Graphics Inc.

Non-OECD countries account for all of the CO2 emissions growth through 2030, yet their per-capita emissions remain far lower than the OECD’s.

2030, this gap also shrinks, although OECD nations remain far less energy-intensive than non-OECD countries.

account for two-thirds of the global total. Meanwhile, OECD emissions will decline by about 15 percent, and by 2030 will be down to 1980 levels. When comparing the CO2 emissions of OECD and non-OECD countries, several measures can be used – producing very different results. On a per-capita basis, 2005 emissions in the OECD were about four times that of non-OECD countries, consistent with the

32

exxonmobil.com

OECD transitions to lower emissions
change in CO2 emissions
Billion Tons
3

OECD transitions to lower emissions
improving energy efficiency and CO2 emissions
Energy per GDP 12 Millions of BTUs per Thousand Dollars of GDP 10
Increasing Efficiency

2

1980

1

8

2005 2030

0

6

–1

4

–2

2 Reducing CO2 Content

–3

1980 – 2005

2005 – 2030

0

0

20

CO2 Content Tons of CO2 per Million BTUs

40

60

80

As a result of ongoing efficiency improvements and a switch to less-carbon-intensive fuels such as natural gas, CO2 emissions in the OECD appear to have already peaked and XOM Energy Outlook are set to trend lower through 2030.
For: GCG Pat Gabriel / Brian Wilburn 817-332-4600

and power homes and businesses. Another is reducing CO 2 intensity – choosing fuels that have lower CO 2 emissions.
Data as of 10/28/2009 From 1980 to 2005, OECD energy usage "1980-2005" 2134

"2005-2030" -2064 became both more efficient and less carbon-

Absolute

File name: 33A XOMEO-ToLowerEmissions.ai CO emissions in the OECD rose intensive.
2

Through 2030, we see this positive

by about 2 Placed file(s): None 1980 to 2005. billion tons from But from 2005 to 2030, we expect them
Updated by: For page:

to fall by aboutGRAPHICS •tons, and by 2030 pursue efficiency and shift to less-carbonZM 2 billion 214-906-4162 • carol@zmgraphics.com be back to about 1980 levels. This is a
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33 Last updated: 12/07/2009 are likely as OECD countries continue to Carol Zuber-Mallison

trend continuing. Beyond 2030, further gains

intensive fuels to help mitigate risks associated with CO2 emissions.

noteworthy achievement considering that OECD economic output will have tripled over the period and population will have grown by about 30 percent. This proves it is possible to achieve economic growth and also reduce the impact of energy use on the environment. How has this progress been achieved? To curb CO 2 emissions and still meet rising energy demand, we have two main tools. One is improving energy efficiency – doing the same or more with less energy by employing advanced technologies and making smart choices about how we use energy to fuel vehicles, generate electricity

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Integrated energy solutions

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By 2030, there will be more than 1 billion additional people on the earth – in total, close to 8 billion people, all seeking better living standards. Economic expansion will be key to reducing poverty and improving health and prosperity, and we expect developing countries to expand their economies rapidly toward that end. This will require reliable and affordable energy, driving demand up by close to 35 percent versus 2005. At the same time, there is an ongoing need to protect the environment for future generations. These interlocking challenges require an integrated set of solutions. No single source of energy, sector of the economy or segment of society can solve all of these challenges. In our view, there are three key elements related to energy: • Accelerating gains in energy efficiency, which conserves supplies, minimizes energy costs and reduces the growth rate of both energy demand and emissions • Expanding the availability of reliable and affordable energy supplies • Developing and deploying technology to help mitigate the growth of emissions associated with energy use. We believe it is prudent to pursue strategies that address the long-term risks associated with rising emissions, while keeping in mind the central importance of energy to the economies of the world. In this light, it is essential to consider and implement policies with the lowest overall cost to society. This requires economy-wide, predictable and transparent costs to shape business and consumer plans and investments. Global participation is also critical to reducing costs and risks. We must pursue each of these three elements with vigor if we are to meet our global energy and environmental challenges. Technology will, as it has in previous decades, continue to play a critical role in enabling all three of these areas.

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The Outlook for Energy through 2030 – key findings
Demand Economic recovery and growth, coupled with rising populations and living standards, will push energy demand up by 1.2 percent a year on average through 2030. • By 2030, global energy demand will be almost 35 percent higher than in 2005. This assumes significant gains in energy efficiency. Without efficiency improvements, demand in 2030 could be about 95 percent higher. • All the growth in demand through 2030 occurs in non OECD countries, where economies are growing most rapidly. Non-OECD energy demand rises by more than 60 percent; demand in OECD countries declines slightly even as their economies expand. • CO 2 emissions in the United States and other OECD • Power generation is the largest and fastest-growing sector. By 2030, power generation will account for 40 percent of all energy demand. • Demand for transportation fuels continues to increase, due largely to greater use of heavy-duty vehicles (trucks and buses). Demand for light-duty vehicles (cars and SUVs) actually plateaus and declines toward 2030. • Beyond 2030, further progress on emissions will require Supply To meet demand through 2030, we will need to expand all economic energy sources. Demand will be strongest for fuels that can help reduce CO2 emissions, such as natural gas. Improve efficiency. Expand energy supplies. Mitigate • Oil remains the largest energy source through 2030, but natural gas will move into second place ahead of coal. In 2030, these three fuels will meet close to 80 percent of global energy needs. The Outlook for Energy is available on our Web site at • Natural gas will be the fastest-growing major fuel. By 2030, demand for natural gas will be more than 55 percent higher than in 2005. Technologies that have unlocked “unconventional” gas will help satisfy this demand. • Nuclear and renewable fuels will see strong growth, particularly in the power-generation sector. By 2030, about 40 percent of the world’s electricity will be generated by nuclear and renewable fuels. www.exxonmobil.com. emissions. Develop new technologies. Each of these solutions will be needed to meet our interlocking energy challenges through 2030 and beyond. more aggressive gains in efficiency and/or the use of less-carbon-intensive fuels. New technologies will be essential on both fronts. countries are declining, even as their populations and economies grow; by 2030, OECD emissions will be approaching 1980 levels. • Emissions grow fastest in the power-generation sector, in part because it is the sector that relies most heavily on coal. • Non-OECD countries account for all of the CO 2 emissions growth through 2030, yet their per-capita emissions remain far lower than the OECD’s. • The most important “fuel” of all is energy efficiency. The energy saved by improved efficiency through 2030 is larger than from any other single source, including oil. Emissions Global CO 2 emissions will rise by an average 0.9 percent a year – a significant increase but substantially slower than the pace of energy-demand growth because of improved efficiency and a shift toward lower-carbon fuels.

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Glossary
ExxonMobil’s Outlook for Energy contains global projections for the period 2005-2030. In the Outlook, we refer to standard units for the measurement of energy: BCFD. Billion cubic feet per day. This is used to measure volumes of natural gas. One BCFD of natural gas can heat approximately 5 million homes in the U.S. for one year. Six BCFD of natural gas is equivalent to about 1 MBDOE. BTU. British Thermal Unit. A BTU is a standard unit of energy that can be used to measure any type of energy source. It takes approximately 400,000 BTUs per day to run the average North American household. Gigawatt (GW). A unit of electric power, a gigawatt is equal to 1 billion watts, or 1,000 megawatts. A 1-GW power plant can meet the electricity demand of approximately 500,000 homes in the U.S. MBDOE. Million barrels per day of oil-equivalent. This term provides a standardized unit of measure for different types of energy sources (oil, gas, coal, etc.) based on energy content relative to a typical barrel of oil. One MBDOE is enough energy to fuel about 3 percent of the vehicles on the world’s roads today.

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