President, ExxonMobil LNG Market Development, Inc.
APEC CEO Dialogues - Energy Panel - Re-energizing APEC’s Economic Recovery
Recorded via Zoom broadcast November 19, 2020
Below is a summary of the key messages discussed during the APEC summit and is not a transcript of the actual panel event.
Energy for growth, the dual challenge and the role of natural gas
Good afternoon and very warm greetings. Energy for growth, the dual challenge and the role of natural gas. It is an honor for me to share with APEC leaders ExxonMobil’s perspectives on these three important topics as we pool our collective thoughts on Re-energizing APEC’s Economic Recovery.
We all have experienced, collectively and personally, the unprecedented impact of COVID-19. Government, communities, and individuals are managing this pandemic with the goal of ensuring safety and maintaining livelihoods.
Near-term, we expect continued market volatility and uncertainty as COVID-19 impacts economic growth, energy demand, and energy supply. In terms of energy demand, ‘discretionary’ travel in Light Duty Transportation and Aviation has been the hardest hit by this pandemic. Energy demand for residential and commercial buildings, as well as power generation have been relatively less impacted.
While the impact of the pandemic on our industry has been severe, the fundamentals of our industry remain strong. Growing populations and a rising middle class with better standards of living will increase demand for energy and the products we produce.
Energy for growth
Over the next two decades, the world population is expected to exceed 9 billion people, while global GDP will likely double. Billions of people are expected to join the middle class. Energy demand will likely increase by 20 percent from now 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 decrease in the carbon intensity of global GDP. Natural gas as an energy source is growing more than any other energy source, and is expected to eventually meet more than 25 percent of all energy demand. Liquefied natural gas (LNG) is expected to meet about one third of that natural gas demand growth.
The dual challenge
APEC leaders know very well the strong correlation between economic development and energy demand. In simple terms, economic progress means each generation is better off than the previous generation. APEC leaders are acutely aware there are few challenges more important than meeting the growing demand for energy and at the same time doing so sustainably. At ExxonMobil, we call this the dual challenge - providing affordable and reliable energy to support an improved quality of life while reducing environmental impacts and the risks of climate change.
Dealing successfully with climate risks will require a concerted effort – governments, businesses, and communities around the world – working together wisely and diligently to tackle this important issue. At ExxonMobil we are doing our part as we believe major technological breakthroughs are needed for world-scale solutions.
Let me share how we think about this issue and share two examples of our research that is focused on addressing the risks of climate change and taking steps to solve the problem for society as a whole. Energy-related emissions account for 80 percent of the world’s emissions and the two big contributors of energy-related emissions are power generation and transportation.
ExxonMobil is doing research on scalable solutions in heavy duty transport and power generation – two sectors that need new technology solutions. We are researching breakthroughs that make carbon capture and storage more economic for power generation, industrial applications and hydrogen production.
Carbonate fuel cell technology has the potential to substantially reduce carbon capture costs and lead to a more economical pathway toward large-scale application globally.
Clean biofuel from algae when scaled up could become part of our energy mix. Algae consumes carbon, and does not compete with food crops like other biofuel sources. Algae thrives in swamps which means it does not require fresh water or arable land, and algae grows all year round, not just when the season is right.
These are two examples of our tangible research looking for world-scale solutions to address the risks 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. We have partnered with more than 80 universities around the world to support emerging energy research.
The role of natural gas
On my third topic – natural gas can play an important role as APEC economies re-energize. Cleaner-burning natural gas is increasingly a fuel of choice for highly efficient combined-cycle power generation turbines. Natural gas offers a solution toward a more prosperous and sustainable future. Air pollution is one of the region’s top challenges. Natural gas produces up to 60% fewer GHG emissions than coal when used for utility-scale power generation, along with fewer emissions of pollutants like NOx, SOx and lead.
In addition to its base load capabilities, natural gas is also the fuel of choice to enable renewables. It provides proven and reliable generation to balance the intermittency of 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 lower carbon energy future of the transportation sector, especially heavy-duty vehicles and maritime vessels.
With these priorities in mind, the case for natural gas as an integral part of APEC’s energy mix is clear. Natural gas is abundant, can be a lower-cost solution within the appropriate policy framework, offers well-documented environmental benefits over coal and forestry biomass in power generation, and complements other energy sources like solar and wind.