Electricity demand tends to rise in conjunction with broader prosperity and rising personal incomes. Therefore, as Non OECD countries continue to transition to more developed economies, they will see rapid growth in electricity demand - much like OECD countries did decades ago.
In fact, about 80 percent of the growth in global electricity demand through 2030 will likely occur in Non OECD countries. China alone accounts for 35 percent. But because Non OECD countries have significantly larger populations, their per capita demand will still be far lower than OECD countries by that time.
This rising demand for electricity is a sign of economic and social development; for example, households shifting away from traditional biomass fuels and instead using electricity. Yet even today, approximately 1.4 billion people - about 20 percent of the world's population - still lack access to electricity.
Providing the energy to meet growing electricity demand will be a tremendous challenge through 2030. Growing production of natural gas to fuel advanced power plants will help meet this rising demand. As a clean-burning energy source, natural gas will also help mitigate environmental impacts, as the power-generation sector is the single largest contributor to global energy related CO2 emissions.
Eoin Treacy's view ExxonMobil and other major oil majors such as Shell produce more natural gas than oil. Therefore it is probably more correct to refer to them as energy majors than specifically oil producers.
The reasons for this change of emphasis range from resource nationalisation which has limited access to new energy discoveries to demand growth for natural gas which is likely to see usage surge in the coming decades.
At Fullermoney we have argued for quite some time that unconventional natural gas was a game changer for the energy industry and that gas was the most sensible option for those concerned with reducing CO2 emissions in a cost effective manner. (Also see Comment of the Day on June 13th for links to various reviews of related companies).
ExxonMobil retested its 2008 low in July 2010, following BP's Gulf of Mexico accident, but subsequently rallied impressively to test the $90 area. It has now completed a reversion towards the 200-day MA but will need to sustain a move above $84 to confirm a return to medium-term demand dominance.
Royal Dutch Shell also rallied impressively from the July 2010 low to hit new all time highs. It has been consolidating above 2000p since May and has completed a reversion towards the mean where it has at least steadied. A sustained move above 2200p would help confirm more than temporary support in this area.