Benefits of Geothermal Energy Transition for Oil & Gas Industry
Geothermal energy presents a lucrative opportunity for the oil and gas industry to shift towards sustainable practices, reduce greenhouse gas emissions, and embrace renewable energy solutions. The transition to geothermal can lead to significant economic and environmental advantages, providing a pathway to combat climate change while ensuring long-term profitability and operational stability. Explore the compelling reasons for the oil and gas sector to embrace geothermal energy and drive positive change in the energy landscape.
Download Presentation
Please find below an Image/Link to download the presentation.
The content on the website is provided AS IS for your information and personal use only. It may not be sold, licensed, or shared on other websites without obtaining consent from the author. If you encounter any issues during the download, it is possible that the publisher has removed the file from their server.
You are allowed to download the files provided on this website for personal or commercial use, subject to the condition that they are used lawfully. All files are the property of their respective owners.
The content on the website is provided AS IS for your information and personal use only. It may not be sold, licensed, or shared on other websites without obtaining consent from the author.
E N D
Presentation Transcript
Why should O&G go Geothermal? Henning von Zanthier LL.M. Rechtsanwalt / radca prawny (Polish and German attorney at law)
I. Why should O&G go Geothermal? 2. Why can geothermal best help to change O+ G to leave fossil fuels? Ca. 90% of the work of geothermal exploration is similar to O&G: geology and drilling, Equipment for drilling, Seismic, chemical aspects, etc. Mapping/ resource allocation 1. Why should O&G change? Ca. 70% of global greenhouse gas emissions come from energy sector and 90% of those are from fossil fuels.1If the energy sector become CO2 free, we would have solved the climate crisis. In 2021, global CO2 emissions reached 37 bln metric tons2with equivalent CO2 50 bn metric tons. To reach the target of staying below 1.5 degree Celsius, we need to reduce the CO2 emissions by 2030 to 16 bln metric tons p.a.3 3. What is the benefit of Geothermal from the change? Up to 526 billion USD per year globally will be spent on new fossil fuels projects until 20304as opposed to only 12 bln USD per year in geothermal or 65.000 boreholes p.a. by O&G 900 boreholes in geothermal. With only 220 billion USD per year from O&G 20.000 geothermal boreholes p-a- would be possible as CEO of International Geothermal Association, Marit Brommer proposes. Because of climate-friendly policies the demand for oil and gas might, possibly dramatically, fall in 2030ies. = The quicker O&G leave fossil fuels for RES e.g. geothermal the lesser these environmental and political risks! 1. 2. https://ourworldindata.org/emissions-by-sector,access: 21.02.2023, https://www.statista.com/statistics/276629/global-co2-emissions/#:~:text=Global%20carbon%20dioxide%20emissions%20from,11.47%20and%205.01%20GtCO%E2%82%82%2C%20respectively, access: 21.02.2023, Global Energy Perspective 2022 , McKinsey&Company, 2022, https://www.iisd.org/articles/press-release/planned-new-oil-and-gas-investments-incompatible-15degc-warming-limit-could, access: 08.02.2023, 2 3. 4.
II. What can the Geothermal Community do to attract 220 billion USD from O&G to Geothermal? What are the arguments of O&G to not go to Geothermal? A1. Profitability The average net profit of O&G is only about 4%.5 For 50 years, O&G had 2.6 bln USD a day profit.6 B1. Geothermal argument 4% profit is not that far from geothermal profitability. A2. Business model Big oil does not like the geothermal business concept of having many years contract with only one off-taker. B2. Geothermal argument Geothermal and lithium is closer to O&G-concept of having different off-takers. 5. https://csimarket.com/Industry/industry_Profitability_Ratios.php?ind=602, access: 08.02.2023. 6. https://www.theguardian.com/environment/2022/jul/21/revealed-oil-sectors-staggering-profits-last-50-years, access: 21.02.2023, 3
II. What can the Geothermal Community do to attract 220 billion USD from O&G to Geothermal? B3. Additional geothermal arguments: 3.1. Make the politics part of the game changing EU and national politics can establish a market design for the O&G to slow down new investments in O&G, by e. g. CO2-taxes and to transfer investments to geothermal projects by: o Intensify O&G with tax preferences for geothermal investment at big scale for big cities, see for example: US Inflation Reduction Act/2022 o By big geothermal investments More geological data available Less financial risk for utilities and communities, because big O&G can often take the financial, exploitation and drilling risk Better informed administration for permits o Subsidies are the right incentives in smaller cities and communities 4 3.2. How to convince politics to become the game changer of O&G going to geothermal?
Climate argument We remain far from reaching the 1.5-degree goal. We are currently on track to reach a temperature increase of 1.7-2.4 degrees C or more by 2050. But what difference do 1.5 and 2 degrees really make? Not much time left! -> tipping points are at latest expected in 2030, strong national countermeasures towards CO2 emissions are likely. So far national geothermal lobby associations like the German BVG and BVEG or EGEC do not lobby for tax preferences for O&G, which change to geothermal. 5
III. What do we offer to O&G to change to Geothermal? 1. Our experiences: Arctic Green Energy, Investor of 100 MW-projects in Poland, others Administrative project management in Poland and Germany for O&G, which change to Geothermal by our subsidiary, Finder: Assess for O&G the legal and political risks for Geothermal investment in Poland and Germany Help to determine lowest price for geothermal energy, including in the calculation: national and local subsidies We find the right off taker for your geothermal production in Germany and Poland since we know several of the off takers in this region Hint to natural conditions with partners Door opener for contact with communities Proposition for various cooperating partners (also experienced): investors, operators, subsidies helpers, etc.; What does VON ZANTHIER & DACHOWSKI offer? Core competence: helping O&G in the legal jungle of geothermal law Providing the legal structure of your German or Polish company Negotiating your permits, concessions and legal assistance by contracts with off-takers and cooperating partners Resolving other legal issues All tax issues services 6
Thank you for your attention! Berlin Lietzenburger Str. 54 D-10719 Berlin Telefon: +49 30 88 03 59 0 Telefax: +49 30 88 59 99 E-Mail: berlin@vonzanthier.com Pozna ul. Garbary 56 61-758 Pozna Telefon : +48 61 85 82 55 0 Telefax : +48 61 85 18 25 9 E-Mail: poznan@vonzanthier.com Warszawa (c/o MGI Modzelewski) Al. Jerozolimskie 136 02-305 Warszawa Telefon: +48 61 8582 550 E-mail: warszawa@vonzanthier.com www.vonzanthier.com 7
