One out of every two cars will be either hybrids or some other alternative-fuel vehicle by 2040, Exxon Mobil predicted Thursday.
Hybrids, which rely on both gas and electricity for power, currently account for less than 1 percent of all vehicles on the world's roads. They should move into the mainstream as governments boost fuel-efficiency requirements, Exxon said.
Power for those hybrids, along with other vehicles and a growing number of households around the world, will increasingly come from natural gas, nuclear power, and renewable energy sources like wind, Exxon said in its closely watched annual long-term energy outlook.
But the largest publicly traded oil company also makes clear that oil will remain king of the energy world for many years.
By 2040, 90 percent of the world's transportation will still run on oil-based fuels, Exxon said. And drillers will find more than enough oil to satisfy a 25-percent jump in global fuel consumption. At current demand levels, Exxon estimated that the world has enough oil to last 100 years.
William Colton, Exxon's strategic planning chief, said vehicle mileage standards may push people toward battery-powered cars, but the cheapest hybrids will be those that also use gasoline.
Plus, petroleum packs a punch that simply cannot be beaten by a battery alone. "One gallon of gasoline has enough energy to recharge an iPhone for almost 20 years," Colton said in a conference call with journalists.
Analysts have been predicting a rise in sales of hybrid vehicles, especially since the auto industry agreed in July to boost mileage requirements. Those requirements, proposed by the Obama administration, call for doubling the average fuel efficiency of U.S. vehicles to 54.5 miles per gallon by 2025.
Deron Lovaas, Federal Transportation Policy Director at the Natural Resources Defense Council, said he was surprised that Exxon predicted such widespread sales of hybrids.
"It's evidence that what the Obama administration is doing with fuel economy is working," Lovaas said.
J.D. Power and Associates expects hybrids to have only a 3 percent share of the market in 10 years. The research group didn't offer a projection going out 30 years.
Greater use of hybrid vehicles, combined with other gains in fuel efficiency, will keep energy demand in check in the U.S. and other major industrialized countries for years, offsetting increased power demand from homes and businesses.
Exxon predicts that energy demand will remain flat through 2040 in developed nations. China and other developing nations will continue to increase their thirst for oil and other petroleum-based fuels, however. Energy demand within developing nations is expected to rise nearly 60 percent from 2010 to 2040.
Overall, gains in efficiency will help the global economy. Exxon predicts that from now to 2040, world GDP will grow an average of 2.9 percent per year while energy demand grows by only 0.9 percent.
Exxon made a series of additional forecasts for the energy industry, including:
--The boom in shale gas production will spread outside the U.S. to almost every continent. Production will double over the next three decades to more than 500 billion cubic feet per day, Exxon said, as countries adopt drilling techniques like hydraulic fracturing, or fracking. The technique has allowed companies to unlock gas deposits from underground rock, although it's been criticized in the U.S. for potentially polluting groundwater.
--Demand for liquid fuels will rise from about 88 million barrels today to 110 million barrels by 2040. An increasing number of those barrels will come from non-traditional sources such as deepwater fields, Canadian oil sands, natural gas liquids and biofuels.
-- Natural gas demand will rise 60 percent by 2040, in part because it emits less carbon dioxide than coal. By 2025, natural gas will replace coal as the second-most popular fuel, behind oil. Coal use is expected to level off and then decline in coming years.
That last point is critical for Exxon. The company bought XTO Energy last year to become America's biggest natural gas supplier. Low natural gas prices may have cut into company profits recently, to the chagrin of some investors, but Exxon still sees natural gas as a good long-term bet.
BP and Royal Dutch Shell also have predicted a bigger role for natural gas in energy production and joined Exxon in buying companies that specialize in drilling for natural gas.
The coal industry, however, disagrees with the oil companies' assessment.
Lisa Camooso Miller, a spokeswoman with the American Coalition for Clean Coal Electricity, said other energy experts have a different view. Miller noted the International Energy Agency predicted in a recent report on global energy use through 2035 that coal use would continue to grow.
The IEA report predicts coal would grow for the next decade before leveling off. While natural gas will grow faster than coal, the report says it won't catch up to coal by 2035. Coal will generate about 25 percent of the world's energy, while natural gas will be slightly less than that, IEA said.
"It's clear that Exxon is relying on their vested interest in fracking," Miller said.
AP Energy Writer Jonathan Fahey contributed to this story from New York.
Chris Kahn can be reached at http://twitter.com/ChrisKahnAP