How we develop our Outlook
ExxonMobil uses a data-driven approach to understand potential future energy demand and supply.
Monitoring policy and technology trends
The Company monitors changes in technology, such as solar panels getting cheaper, batteries improving, as well as policy developments like the EU’s tailpipe emissions regulations and China’s coming 14th five-year plan.
Historical foundation and fundamentals
ExxonMobil uses the International Energy Agency’s World Energy Statistics and Balances data service and other credible third-party sources as the historical basis for the Outlook. For liquids supply, we use S&P Global Platts data. For natural gas, historical production and pipeline flows are based on Wood Mackenzie, IHS, JODI Gas, S&P Global Platts (Eclipse) and others; historical LNG production and trade flows are based on IHS Markit (Waterborne) data. In this report, data for 2020 and earlier are considered historical; the Outlook’s modeled projections cover 2021 to 2050.
The Company compiles demographic information and models economic trends for about 100 regions around the world. Primary sources are the United Nations, World Bank, International Monetary Fund and IHS. Population estimates are compiled from the U.N. and the World Bank. Economic trends (e.g., GDP) are modeled based on respected third-party views and ExxonMobil’s own analysis.(See footnote 1.)
Use of sensitivity analysis
ExxonMobil uses sensitivity analyses to provide greater perspective on how variations to its Outlook assumptions could affect projected energy supply and demand. These analyses involve assessing technology advancements and the potential impact on energy supply and demand, resulting in a range of potential low- to high-demand outcomes for certain energy sources. The projections in the sensitivity analyses do not represent the Company’s viewpoint or the likelihood of these alternatives; they can provide context to its analysis.
The Company projects demand for services across 15 sectors covering needs for personal mobility; residential energy; production of steel, cement and chemicals; plus many others. Then it matches that demand across multiple energy sources, taking into account current use and potential evolution. It also projects liquid and natural gas supply and trade flows. (See footnote 2.)
1Historical data profiles for energy demand, liquids and gas supply, demographic and economic trends are based upon publicly available third-party data. The historical data may be converted into different scientific metrics, or aggregated or disaggregated by regions, sectors or fuels where necessary to complete our analysis. Where there are differences, imbalances or gaps in reported historical data among credible third-parties, professional judgment is applied. Projections begin in 2021, with 2020 being the latest year of historical data when the modeling was conducted. Historical data compiled from third-party sources can be subject to later revision as new information becomes available.
2Proprietary, internally-developed models are used to model future (1) demand for energy services and energy sources, (2) oil and gas production and (3) natural gas trade flows via pipeline and liquefied natural gas. In addition to the historical foundation and projections of fundamental drivers, these proprietary models use our internal assumptions on many variables such as expected efficiency improvements, the pace of deployment of technology advances, costs, consumer preference and much more. Our internal assumptions are informed by our own proprietary data and analysis, publicly available data and the views of credible third party consultants, academics and think-tanks. Estimates of energy-related CO2 emissions from the combustion of fossil fuels are derived from the historical and projected energy demand by applying an emissions factor for each fossil fuel type.