The document outlines 5 megatrends in the energy industry over the next few decades: 1) Growing oil demand driven by diesel consumption in emerging markets, 2) Increased fuel efficiency reducing oil demand in developed nations, 3) Expansion of shale gas production and infrastructure in the US driving natural gas demand, 4) Growth in liquefied natural gas exports as US shale gas production increases to meet Asian and European demand, and 5) Increased renewable energy generation as its share of electricity rises to meet environmental and energy security goals. These megatrends are expected to generate substantial profits for companies involved in oil & gas, pipelines, liquefied natural gas, and renewable energy.

1. 5 Megatrends in Energy
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2. The sun isn’t setting on energy
Over the past year demand growth for oil has weakened,
sending its price down 50%. However, overall energy
demand in the future is still expected to be robust, with
low oil prices today potentially creating new oil demand in
the years ahead. Oil, however, is just one of the
megatrends in energy that are expected to play out over
the next few decades.
Photo credit: Flickr user Jonathan C. Wheeler

3. No. 1: The oil megatrend
Driven by diesel consumption in emerging markets
Source: Exxon Mobil Corporation

4. No. 1: The oil megatrend
• The world currently uses 90 million barrels of oil per day
• By 2035 demand is expected to swell to over 100 million
barrels per day
• This growth will be largely driven by demand for diesel in
places like China, Mexico and Turkey
• To meet this demand global energy companies will need
to invest $12 trillion by 2035
Despite the headwinds from fuel efficiency
demand for oil is expected to grow 0.8% per year

5. No. 1: The oil megatrend
• Big oil: ExxonMobil (NYSE: XOM) and Chevron
(NYSE: CVX)
• U.S. Independents: ConocoPhillips (NYSE: COP),
Devon Energy (NYSE: DVN) and EOG Resources
(NYSE: EOG)
• Service providers: National Oilwell Varco (NYSE:
NOV), Schlumberger (NYSE: SLB) and Halliburton
(NYSE: HAL)
Investment ideas:

6. No. 2: The fuel efficiency megatrend
Growth for oil would be even higher if it wasn’t
for fuel efficiency trends in developed nations
Source: Exxon Mobil Corporation

7. No. 2: The fuel efficiency megatrend
• In the U.S. CAFE standards are gradually increasing
to a goal of 54.5 miles per gallon by 2025
• The rise of hybrid technology and EVs are also
helping to reduce gasoline demand in the
developed world
A combination of high oil prices, environmental
concerns and energy security is leading to more
efficient use of energy in developed countries

8. No. 2: The fuel efficiency megatrend
• Energy efficient automakers: Ford (NYSE: F) and
General Motors (NYSE: GM)
• Electric vehicles: Tesla (NASDAQ: TSLA)
Investment ideas:

9. No. 3: The natural gas megatrend
Shale gas for the U.S. is a game-changer. Cheap
natural gas is creating new demand and new markets
Source: Kinder Morgan Inc.

10. No. 3: The natural gas megatrend
• Natural gas production in the U.S. is expected to
grow by more than 40% over the next decade
• This will not only fuel growing demand in the
power and industrial segments, but it will also
open the door for exports
Hydraulic fracturing and horizontal drilling unlocked
a more than 100 year supply of natural gas in the
U.S.

11. No. 3: The natural gas megatrend
• Domestic pure-play natural gas producers:
Chesapeake Energy (NYSE: CHK) and
Southwestern Energy (NYSE: SWN)
• Pipelines companies: Kinder Morgan (NYSE:
KMI), Williams Partners (NYSE: WPZ) and Energy
Transfer Partners (NYSE: ETP)
Investment ideas:

12. No. 4: The LNG megatrend
The shale gas boom in the U.S. along with growing demand for
gas in Asia and Europe is expected to fuel a booming LNG
market
Source: Cheniere Energy

13. No. 4: The LNG megatrend
• Over the next decade demand for LNG is expected to grow
5.7% per year
• This is as worldwide natural gas demand is expected to grow
by 1.6% per year, which is well above the average growth rate
for energy demand of 1%
• This growth will be supplied by surging shale gas production
in North America along with growing offshore gas output
from recent discoveries in Australia, Africa and the Middle
East
Energy security concerns in Europe along with
environmental worries in Asia Pacific will lead to
strong LNG demand over the next decade

14. No. 4: The LNG megatrend
• Pure-play U.S. LNG exporters: Cheniere Energy
(NYSEMKT: LNG)
• Global LNG leaders: Chevron (NYSE: CVX), Exxon
Mobil (NYSE: XOM) and Royal Dutch Shell (NYSE:
RDS-A)
Investment ideas:

15. No. 5: The renewables megatrend
Renewable energy is expected to take share in
the electric generation market in the years ahead
Source: EIA

16. No. 5: The renewables megatrend
• The U.S. Energy Information Administrations
expects renewable power’s share of U.S. electricity
generation to grow from 13% in 2013 to 18% by
2040
• Globally solar, wind and biofuel demand is
expected to grow by 5.8% per year, well outpacing
overall energy demand growth of 1% per year
Energy security concerns along with a focus to
become less carbon intense is expected to lead to
strong growth in renewable power generation

17. No. 5: The renewables megatrend
• Solar companies: SunPower (NASDAQ: SPWR)
and Solar City (NASDAQ: SCTY)
• Utilities: NextEra Energy (NYSE: NEE)
• Yieldcos: Brookfield Renewable Power (NYSE:
BREP) and NRG Yield (NYSE: NYLD)
Investment ideas:

18. The sun isn’t setting on energy
While demand might ebb and flow the overall trend in
energy is that demand is going higher. That’s creating five
distinct megatrends that could generate a lot of profits for
investors in the decades ahead.
Photo credit: Flickr user Jonathan C. Wheeler

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