President, ExxonMobil LNG Market Development, Inc.
Gastech 2020 Virtual Summit, Global Leaders Panel
Recorded via Zoom and broadcast September 8, 2020
How can the LNG Industry achieve its Strong Growth Expectations given the Drivers of Gas Demand and the Intensification of the Environmental Imperative?
Good morning, good afternoon – depending on where you are connecting from into this virtual conference, I am honored and pleased to be participating in this Gastech Virtual Summit.
In line with this panel’s theme – the drivers for LNG’s growth, and – the environmental imperative, let me share ExxonMobil’s perspectives by way of introductory comments.
First, the environmental imperative. ExxonMobil looks at the role of the energy industry as continuing to provide energy to fuel mankind’s progress through economic development and rising standards of living, while taking care of the environment. This is how we have framed what we call the dual challenge of providing affordable and reliable energy to support prosperity while reducing environmental impact.
Aspirations are good and noble. More importantly, we need to focus on tangible action, that is, how we get from here to there. For ExxonMobil, our efforts are in tangible research to look for solutions to address the risk of climate change.
Since 2000, we have invested more than 10 billion dollars in our facilities and research to develop and deploy lower-emissions energy solutions such as cogeneration, algae biofuels and carbon capture and storage. We employ 20,000 scientists and engineers, including more than 2,200 with Ph.D.s. ExxonMobil works with about 80 universities around the world to explore next-generation energy and environmental solutions.
We are researching scalable solutions in heavy duty transport and power generation – two sectors that need new ways of doing things. We are researching breakthroughs that make carbon capture and storage more economic for power generation, industrial applications and hydrogen production. Progressing advanced biofuels for transportation and chemicals.
ExxonMobil is looking to solve another big challenge: how to reduce emissions from manufacturing processes. One focus area is process intensification – the development of breakthrough technologies that could make manufacturing far more efficient. Our goal is to develop novel process technologies, including membranes and other advanced separations, catalysts and high-efficiency reactors, that can lower CO2 emissions by 25% or greater.
With that brief thumbnail sketch, I trust I have given you a good sense of our tangible efforts to address the risks of climate change. This is in the context that dealing successfully with climate change will require a coordinated effort involving individuals, governments and industry leaders around the world.
Now let me move to share our perspective on energy for progress and the important role LNG plays in fueling economic development and raising standards of living.
The combination of an oversupplied market and historically low demand from the pandemic have created unprecedented challenges for our industry. While the world continues to grapple with the severe impacts of market demand and the impact of COVID-19, long-term fundamentals remain strong supported by growing population and energy demand.
Over the period to 2040, the world population is expected to reach 9.2 billion people, while global GDP will likely double. Billions of people are expected to join the middle class. Energy demand is likely to rise about 25 percent over the period to 2040, while efficiency gains and a shift in the energy mix – including a rising penetration of wind and solar are likely to enable nearly a 45 percent fall in the carbon intensity of global GDP.
ExxonMobil’s Outlook for Energy anticipates significant changes through 2040 to reshape the use of energy through energy efficiency gains and a shift in the energy mix, in this regard , nationally determined contributions (NDCs) related to the Paris Agreement provide important signals on government intentions related to the general pace of policy initiatives to address climate risks.
Electrification and the gradual shift to lower-carbon energy sources are expected to be significant global trends. Renewable and nuclear energy see strong growth, contributing nearly 40 percent of incremental energy supplies to meet demand through 2040. Oil will continue to play an important role in the world’s energy mix as commercial transportation and chemical sectors lead demand. Coal’s share will fall as the world shifts to lower-emissions energy sources, helping enable a peak in energy-related CO2 emissions by 2040. Natural gas grows the most of any energy type, and is expected to reach a quarter of all energy demand.
Energy is essential as living standards improve. Cleaner-burning natural gas is an increasing fuel of choice for highly efficient combined-cycle power generation turbines. In addition to its base load capabilities, natural gas is also the fuel of choice to enable renewables. It provides proven, cost-effective, scalable, flexible, responsive and reliable generation to balance the intermittency of variable renewable energy. This can enable the broader penetration of renewables into the energy mix, reducing emissions while helping to maintain reliable electricity supplies.
Natural gas, in both compressed and liquefied forms, could also contribute to the decarbonization of the transportation sector, especially heavy-duty vehicles and maritime vessels. This will facilitate compliance with air quality regulations in certain regions and significantly improve air quality in those regions without such regulations.
Let me conclude - there are few challenges more important than meeting the world’s growing demand for energy while reducing environmental impacts and the risk of climate change. We must continue to meet the growing demand for reliable, affordable energy to support prosperity and enhanced living standards coupled with the need to do so in ways that reduce potential impacts on the environment, including those relating to air quality and the risks of climate change.