The Outlook for Energy: A View to 2040

The Outlook for Energy: A View to 2040

The Outlook for Energy: A View to 2040 Dr. David Khemakhem Global Energy Security Forum Miami, February 12, 2013 This presentation 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 under the heading "Factors Affecting Future Results" in the Investors section of our website at: www.exxonmobil.com. The information provided includes ExxonMobil's internal estimates and forecasts based upon internal data and analyses as well as publically-available information from external sources including the International Energy Agency. This material is not to be used or reproduced without the permission of Exxon Mobil Corporation. All rights reserved. Energy Outlook Development 100 countries 15 demand sectors 20 fuel types technology & policy ExxonMobil 2013 Outlook for Energy CO2 Policies 2030 2040 CO2 Proxy Cost ~ 10 < 60 $/ton ~ 15 $/ton ~ 20 $/ton ~ 80 $/ton ExxonMobil 2013 Outlook for Energy Global fundamentals Population Trends Impacts Energy Use Population Fertility Rate*

Global Demographics* Billion Children per Woman Billion 9 8 OECD 9 Africa 7 Other Non OECD Age 65+ China India 6 6 Southeast Asia Latin America 5 6 Africa Age 15-64 4

India 3 3 3 2 China 1 Age 0-14 OECD 0 2010 2020 2030 ExxonMobil 2013 Outlook for Energy 2040 0 1960 1980 2000 2020 2040 * Source: World Bank & United Nations 0 2010 2020 2030 2040 Economic Growth Drives Energy Demand GDP

Energy Demand Trillion 2005$ Quadrillion BTUs 125 1250 2010-2040 AAGR % 100 World 2.8% 2010-2040 AAGR % Other Non OECD 75 3.9% 1000 China 5.6% 750 50 1.8% 25 250 United States ExxonMobil 2013 Outlook for Energy Energy Saved ~500

500 Other OECD 0 2000 World 1.0% 2020 2.3% 2040 0 2000 2020 2040 Tale of Two Worlds Non OECD OECD Quadrillion BTUs Quadrillion BTUs 500 500 Other Renewables Biomass 400 Nuclear Coal

300 200 Gas 100 0 2000 ExxonMobil 2013 Outlook for Energy Oil 2020 2040 400 300 200 100 0 2000 2020 2040 Energy Mix Continues to Evolve Quadrillion BTUs 225 0.8% 2040 200 Average Growth / Yr. 2010 - 2040

1.7% 175 2010 1.0% 150 -0.1% 125 100 75 2.4% 50 0.4% 25 0 Oil ExxonMobil 2013 Outlook for Energy Gas Coal Nuclear Biomass 5.8% 1.8% Solar / Wind / Biofuels

Hydro / Geo Electricity Generation Leads Growth Energy Demand by Sector Quadrillion BTUs 300 2040 2025 Electricity Demand 250 200 2010 150 100 50 0 Electricity Generation ExxonMobil 2013 Outlook for Energy Industrial Transportation Res/Comm Residential/ commercial Household Growth Drives Residential Demand 2040 Million Households 750 2040 600

2010 450 300 150 0 Europe OECD N. America ExxonMobil 2013 Outlook for Energy Other OECD China Africa India Latin America Russia/ Caspian Middle East Other Non OECD Residential/Commercial Outlook By Sector Residential Energy Intensity Fuel Demand

Quadrillion BTUs Million BTUs per Person Quadrillion BTUs 150 35 150 North America 125 Commercial 30 125 Other 25 100 Electricity 100 Europe OECD 20 75 75 Japan Residential 50 15 Biomass

China 50 10 Coal Gas 25 5 25 India Oil 0 2000 2020 ExxonMobil 2013 Outlook for Energy 2040 0 2000 2020 2040 0 2000 2020 2040 Industria l

Industry Energy Demand Increases Quadrillion BTUs 250 Paint Paint 200 Fertilizer Fertilizer Plastics Plastics 150 Chemicals Automobiles Automobiles 100 Manufacturing & Industry Liquid Liquid Fuels Fuels 50 Steel Steel Other ExxonMobil 2013 Outlook for Energy Natural Natural Gas Gas Coal Coal

Energy Industry 0 1990 Textiles Textiles Lubricants Lubricants Asphalt Asphalt Agriculture Agriculture 2015 2040 Industrial Energy Demand By Fuel By Region Quadrillion BTUs Quadrillion BTUs 250 250 Market Heat Electricity 200 Rest of Non OECD 200

Renewables Coal 150 100 Gas 50 150 India 100 China 50 Oil 0 2000 ExxonMobil 2013 Outlook for Energy 2020 2040 OECD 0 2000 2020 2040 Electricity generation Electricity Demand by Region Non OECD

OECD Thousand TWh Thousand TWh 25 25 Other Non OECD 20 20 Russia/Caspian Southeast Asia 15 15 Middle East Africa 10 India Other OECD 10 Europe OECD 5 0 2000 ExxonMobil 2013 Outlook for Energy China 2020

2040 5 North America 0 2000 2020 2040 Fueling Electricity Generation Varies by Region Electricity Generation Growth in Fuels from 2010 to 2040 Quadrillion BTUs Quadrillion BTUs 300 120 250 Renewables 200 Nuclear Non OECD 90 Renewables Nuclear 60 150 Coal Gas

30 100 Coal 0 50 OECD Gas Oil 0 2000 ExxonMobil 2013 Outlook for Energy Oil -30 2020 2040 Non OECD OECD Global Electricity Generation Mix Evolves Global Capacity Utilized By Generation k TWh GW 35 1200 30 1000

Gas 25 800 20 600 Coal 15 400 Nuclear 10 Wind & Solar 200 5 Other Renewables Oil 0 2000 ExxonMobil 2013 Outlook for Energy 0 2020 2040 Nuclear Wind Solar Transportatio n

Transportation Demand Sector Demand Demand by Region MBDOE MBDOE 75 30 Rail 60 Marine Aviation 40 25 25 20 45 Heavy Duty 15 10 30 10 15 Light Duty 0 2000 2020 ExxonMobil 2013 Outlook for Energy 2040

5 0 AP NA Europe LA ME ROW Light Duty Vehicle Fleet Grows, Mix Changes Powertrain Technology Millions of Vehicles 2010 2040 2025 500 400 PHV/EV Advanced* Full Hybrid CNG CNG 300 LPG LPG Conv. DieselDiesel Conv Conv. Gasoline Mogas Conv

200 100 0 North America Europe OECD ExxonMobil 2013 Outlook for Energy Other OECD China India Middle East *Full Hybrid, Plug-in Hybrid, Electric Vehicles Latin America Other Non OECD Light Duty Vehicle Sales & Efficiency Annual New Car Sales by Type Incremental Vehicle Efficiency Gains Million Cars Miles per Gallon 150 20 Elec/PHV

47 MPG Full Hybrid 125 Natural Gas Conv. Diesel 100 Hybrid 15 Conv. Gasoline 75 Vehicle Size 10 Body & Accessories 50 5 Average 27 MPG 25 Powertrain 0 2010 2015 2020 2025 2030 2040 ExxonMobil 2013 Outlook for Energy 0 2010 2020

2030 2040 Todays Vehicle Technology Choices Estimated Driving Distance per Fill-up 5-Year Cost & Savings 2012$k Full hybrid: 515 miles 20 Diesel: 435 miles 15 Cost above Conventional Gasoline: 350 miles E85: 260 miles 10 Fuel Savings CNG: 210 miles 5 Electric: Up to 100 miles PHV: Up to 40 miles + 450 miles 0 Full Hybrid ExxonMobil 2013 Outlook for Energy CNG Plug-in Hybrid

Elec Heavy Duty Transportation Efficiency New Truck Efficiency Efficiency Impact % Improvement, 2010-2040 MBDOE 75 45 Truck Size Demand w/o Efficiency Demand 60 30 45 Hybrid Body 30 Powertrain Logistics & Congestion 15 15 Body Powertrain 0 0 '10-'25

'25-'40 Technology ExxonMobil 2013 Outlook for Energy Other Regional Impact 2010 2025 2040 Transportation Fuel Mix Fuel Demand Growth in Demand from 2010 to 2040 MBDOE MBDOE 15 75 Non OECD Other 12 Natural Gas 60 OECD Fuel Oil Jet Fuel 45

9 6 Biodiesel 3 30 Diesel 0 15 Ethanol -3 Gasoline 0 2000 -6 2020 ExxonMobil 2013 Outlook for Energy 2040 Gasoline Diesel Jet Fuel Fuel Oil Natural Gas Other Supply Remaining Oil Resource Crude and Condensate (BBO)

~1,000 Source: IEA ~1,100 ~1,100 Russia/Caspian ~100 Europe North America ~650 Middle East ~200 ~4,300 Latin America Global ExxonMobil 2013 Outlook for Energy Africa ~150 Asia Pacific Liquids Supply Supply by Type Resource* MBDOE TBO Biofuels Other Liquids 120 100 6

NGLs Oil Sands 80 Tight Oil 5 4 Remaining Resource Deepwater 60 3 40 2 Conventional Crude & Condensate 20 0 2000 Cumulative Production 1 2010 ExxonMobil 2013 Outlook for Energy 2020 * Source: IEA

2030 2040 0 2040 Global Gas Resource Source: IEA; *Includes Europe Non OECD 6.2 4.3 1.6 4.9 Russia/ Caspian* Europe OECD North America 4.5 1000 TCF Middle East 30 2.6 25 20 Unconventional 2.5 15 10 Africa Latin America Conventional

5 0 Asia Pacific World ExxonMobil 2013 Outlook for Energy Over 200 years coverage at current demand Natural Gas Supply and Demand Shifts North America Gas Supply Global Gas Supply BCFD BCFD 120 600 LNG 100 80 60 Rest of World Unconventional 500 North America Unconventional 400 Local Unconventional

300 40 200 20 100 Rest of World Conventional Local Conventional ExxonMobil 2013 Outlook for Energy 1/ 1 1/ 1 1/ 1 1/ 1 1/ 1 1/ 1 North America Conventional 1/ 1 0 1/ 1

1/ 1 1/ 1 1/ 1 1/ 1 1/ 1 1/ 1 1/ 1 1/ 1 1/ 1 1/ 1 1/ 1 0 Growth in Unconventional Production Production by Type Production by Region BCFD BCFD 200 200 Rest of World 150 150 Asia Pacific

100 Shale 50 100 Americas 50 Coal Bed Methane 0 2000 ExxonMobil 2013 Outlook for Energy Tight 2020 2040 0 2000 2020 2040 North America Energy Balance Quadrillion BTUs 50 40 Oil Net Exports Net Net Imports Imports

30 Regional Supply 20 10 0 2010 50 Total Energy Balance 2025 Gas 2040 Net Exports 40 100 Net Net Imports Imports 75 Regional Supply 30 50 20 Regional Supply 10 0 2010 Net Exports 125

25 0 2010 2025 ExxonMobil 2013 Outlook for Energy 2040 2025 2040 Asia Pacific Energy Balance Quadrillion BTUs 90 Oil 60 Net Net Imports Imports 30 0 2010 90 In-country supply 2025 2040 Total Energy Balance 350 300 Gas

Net Net Imports Imports 250 200 60 150 Net Net Imports Imports 30 50 In-country supply 0 2010 In-country supply 100 2025 ExxonMobil 2013 Outlook for Energy 2040 0 2010 2025 2040 Conclusions ExxonMobil 2013 Outlook for Energy Shale Gas and Hydraulic Fracturing

Conductor Casing Surface Casing Thousands of feet of solid rock Intermediate Casing Production Casing* *14,000 feet measured depth Regional Energy Trends Evolve By Region Percent of World Total 100 North America 80 Europe Russia/Caspian 60 China 40 Other AP 20 Africa Middle East Latin America 0 1980 1990 ExxonMobil 2013 Outlook for Energy 2000 2010

2020 2030 2040 Economic Choices for U.S. Electricity Baseload, Startup 2030 2012 cents/kWh $60/ton of CO2 16 Reliability Cost 12 8 4 $0/ton 0 Coal Gas Nuclear *Wind and solar exclude costs for integration, backup capacity and additional transmission ExxonMobil 2013 Outlook for Energy Onshore Wind* Utility Solar PV* Renewables Gain Share United States

Europe Asia Pacific Percent of TWh Percent of TWh Percent of TWh 45 45 45 40 40 35 35 30 30 25 25 25 20 20 20 15 15

15 10 10 10 5 5 5 0 0 0 Solar 40 Geothermal Biomass/Other 35 Wind Hydro 30 '10 '20 '30 '40 *Biomass includes Municipal Solid Waste ExxonMobil 2013 Outlook for Energy

'10 '20 '30 '40 '10 '20 '30 '40 ExxonMobil: Technology for Energy Challenges Technology to address the twin challenges of increased energy demand while mitigating risk from GHG emissions Improving Efficiency Automotive technologies Vehicle light weighting ExxcoreTM: tire lining technology Advanced synthetic lubricants Power generation Cogeneration Wind turbine lube oils Expanding Supplies Directional drilling Unconventional and liquefied natural gas Advanced biofuels Reducing Emissions Natural gas for power generation Controlled Freeze Zone Carbon capture and storage Global Climate & Energy Project Costs Impact U.S. Heavy Duty Choices 3-Year Cost of Ownership $k 5-Year Cost of Ownership

$k 450 2012 450 2012 300 Vehicle Cost 300 Vehicle Cost 150 150 Fuel Cost Fuel Cost 0 0 Conv. Diesel LNG-CI Long Haul Truck LNG Tanks ExxonMobil 2013 Outlook for Energy Conv. Diesel

CNG-SI Short Haul Truck CNG Tanks Bio for David Khemakhem (kmakm) David Khemakhem is an Energy and Technology Advisor at ExxonMobil. He is a member of the Corporate Strategic Planning Department, where he is responsible for assessing energy trends, emerging energy technologies, and related market and public policy issues around the world. He is one of the principal contributors to ExxonMobils long-term global Energy Outlook. He is also active in communicating ExxonMobils view of the future of energy to a wide variety of audiences. David has worked with Exxon then ExxonMobil since 1997 in numerous technical and management assignments covering activities in the United States and around the world. He started his career with Exxon Production Research Company in the area of Wellbore Design and eventually became Team Lead for the Well Integrity Group at ExxonMobil Upstream Research. In 2001, he transferred to ExxonMobil Production Company as a Subsurface Engineer overseeing completion and workover operations in Colorado, Wyoming, California and South Texas. In 2003, David relocated to Qatar, where he spent six years in a variety of assignments, including Drilling and Completions Engineering Manager. In this role he led a team of engineers working on RasGass 14 drilling rigs during the development of the North Field. In 2009, David transferred back to Houston, joining the ExxonMobil Upstream Research Company as Well Performance Manager and then in 2010, he became the Unconventional Gas Recovery Manager. The following year, in 2011, David moved to ExxonMobil Headquarters to join the Corporate Strategic Planning team where he is helping in the development of the Energy Outlook for 2013 and beyond. David holds a Ph.D. in Mechanical Engineering from the University of Minnesota. Text in Box: Short Bio

Conductor Casing Fresh Water Aquifer Surface Casing Intermediate Casing Production Casing* 14,000 feet measured depth

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