ExxonMobil's annual energy outlook said it expects demand for natural gas for power generation to rise by about 85 percent from 2005 to 2030. By 2030, gas could provide more than 25 percent of the world’s electricity needs. That will make it well positioned to become the top source for electricity production, the company said.

Today, 40 percent of the world’s electricity is made from coal. By 2030, coal’s share will drop to about 30 percent. The forecast came in ExxonMobil's annual report, "The Outlook for Energy: A View to 2030."

Demand for energy for power generation in Asia Pacific is projected to grow in conjunction with rapid economic growth and rising living standards. By 2030, Asia Pacific power generation demand will be about one-and-a-half times the level of North America and Europe combined. Much of the growth in Asia Pacific demand will be met by coal. Demand for coal for power generation in Asia Pacific will continue to rise, with growth at about 85 percent from 2005 to 2030. Coal will lose some market share to natural gas, nuclear and renewable fuels, which will also see strong growth. ExxonMobil said that by 2030 coal will account for less than 60 percent of the fuel required for power generation in Asia Pacific, down from about 70 percent today.

Power generation demand is climbing less quickly in more mature economies of North America and Europe. In all regions, improvements to efficiency help curb demand growth are expected to take hold.

ExxonMobil said many governments are seeking to limit greenhouse gas emissions by enacting policies that put a cost on CO2 emissions. By 2020, adoption of these policies will be equivalent to adding CO2 costs of about $30 per ton in mature industrial countries. At this level, natural gas becomes a lower-cost source of electricity than coal, while nuclear and wind become increasingly competitive. This shift becomes even more pronounced if CO2 costs rise to $60 per ton, which is where the company anticipates policies will drive costs by 2030.

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