Geothermal goldrush

CRC’s Carbon TerraVault provides updates on progress

• CRC’s Carbon TerraVault (CTV) updates 2023 operations, highlighting advancements in carbon management business.

• Highlights include EPA’s release of draft Class VI permits, selection of California DAC Hub for DOE funding, and submission of 51 million metric tons of Class VI permits to EPA.

• Announcement of the first capture-to-storage project at CRC’s Elk Hills cryogenic gas plant and signing of storage-only CDMAs with greenfield project developers.

• Award of two DOE research grants under the CarbonSAFE initiative and expansion of the carbon management team to approximately 50 full-time employees.

• Updates on EPA Class VI permitting and Kern County Draft Environmental Impact Review, with anticipation of final decisions in the second half of 2024.

• Pending merger with Aera Energy, LLC, expected to nearly double injection rate capacity in the San Joaquin Basin, subject to regulatory approvals and set to close in the second half of 2024.

Fervo raises $244 million led by Devon for next-gen geothermal

• Fervo Energy raises $244 million in new funding led by Devon Energy ($100mm) to accelerate deployment of next-generation geothermal technology.

• Other investors include Galvanize Climate Solutions, John Arnold, Liberty Mutual Investments, Marunouchi Innovation Partners, Mercuria, and Mitsubishi Heavy Industries, alongside existing investors such as Capricorn’s Technology Impact Fund, Congruent Ventures, DCVC, Elemental Excelerator, Helmerich & Payne, and Impact Science Ventures.

• Recent achievements include bringing the first commercial project online, establishing the most productive enhanced geothermal system (EGS) in history, and commencing drilling at Cape Station, a 400 MW project in Utah.

• Early drilling results at Cape Station show reduced drilling times and lower costs surpassing Department of Energy expectations for EGS.

• The funding will support continued operations at Cape Station, with plans to deliver clean electricity to the grid by 2026.

Separately, the WSJ provided some coverage on oil and gas advancing geothermal which also covered Fervo’s raise.

WSJ piece on oil and gas advancing geothermal

• Oil-and-gas companies are accelerating investments in geothermal energy, leveraging fracking technology to tap into underground heat for electricity production.

• Chevron, BP, and Devon Energy, among others, are investing hundreds of millions of dollars in modern geothermal startups and projects.

• The new geothermal industry benefits from collaboration between oil-and-gas, technology, and green power industries, aiming to produce a steady, round-the-clock supply of carbon-free electricity.

• Fervo Energy, utilizing horizontal drilling and frac technology, aims to economically generate electricity from underground heat.

• Oil companies are retrofitting wells for geothermal power and investing in startups like Eavor Technologies

• Chesapeake recently invested in Sage Geosystems.

Munich Re’s MEAG announces $200mm close for sustainable forestry

• Munich Re’s MEAG announces the first closing of its MEAG Sustainable Forestry Equity Fund, raising over USD 200 million from German insurers and a DAX-listed company group’s pension scheme.

• The fund prioritizes established professional markets in the USA, New Zealand, and Australia, aiming for a diverse portfolio of sustainably managed forests.

• Five percent of the fund’s assets are allocated to new afforestation projects, with a target volume of USD 500-700 million.

• Forest investments offer low correlation with other asset classes and long-term potential for value growth due to rising global demand for wood, driven by sustainable construction trends.

IAG signs major SAF deal with Twelve

• IAG (British Airways parent) reaches one-third of its 2030 Sustainable Aviation Fuel (SAF) target through a major e-SAF deal with Twelve.

• Twelve will supply IAG with 785,000 tons of e-SAF over a fourteen-year period, starting deliveries as early as 2025.

• The e-SAF is produced using power-to-liquid technology and offers up to 90% reduction in lifecycle greenhouse gas emissions compared to conventional jet fuel.

• Twelve, based in Berkeley, California, specializes in carbon transformation and power-to-liquid technology, and has developed a proprietary process for producing synthetic fuels from renewable electricity and CO2.

• This partnership represents a significant step towards IAG’s goal of flying with 10% SAF by 2030, making it the first European airline group to set this target.

• IAG’s Project Speedbird in the UK, involving an ethanol-to-jet fuel project, receives £9 million from the UK Government’s Advanced Fuels Fund.

Southwest launches ventures subsidiary and invests $30 million into LanzaJet

• Southwest Airlines launches Southwest Airlines Renewable Ventures (SARV), a subsidiary focused on obtaining sustainable aviation fuel (SAF).

• SARV announces a $30 million investment in LanzaJet, a SAF technology provider with ethanol-to-SAF technology.

• Southwest aims to replace 10% of its jet fuel consumption with SAF by 2030, part of its net zero carbon emissions goal by 2050.

• SARV will manage Southwest’s SAF-related investments, including equity investments in SAFFiRE Renewables for cellulosic ethanol production.

• LanzaJet plans to build an ethanol-to-SAF facility to produce SAF primarily for Southwest, utilizing SAFFiRE’s ethanol.

Woodside signs 10 year LNG supply deal with Korea Gas Corp

• Woodside Energy secures a long-term liquefied natural gas (LNG) supply agreement with South Korean state-owned firm Korea Gas Corp.

• The agreement entails Woodside supplying approximately half a million tonnes of LNG per year for 10.5 years starting in 2026.

• LNG supplied to Korea Gas will originate from Woodside’s global portfolio, including its Scarborough gas project, aiming for its first LNG cargo in 2026.

Voltera invests $150 million into EV infrastructure development

• EQT-backed Voltera secures 19 new zero-emission vehicle (ZEV) infrastructure development sites, bringing the total portfolio to 21 sites, with approximately $150 million of private investment and over 115 megawatts (MW) of charging capacity.

• The company aims to double its real estate portfolio in 2024, with sites located across the United States.

• In 2023, Voltera evaluated over 1,200 sites and reinforced its ability to navigate challenges in assessing prime real estate for ZEV infrastructure.

• Each site is strategically located and designed to fit the size and power needs of fleets’ unique use cases, leveraging deep real estate insight and strategic expertise.

• Both public and private investments are crucial for scaling ZEV charging infrastructure to support fleets’ compliance with emissions regulations.

• Carlyle hires Goldman’s former top commodities analyst Jeff Currie

• Moelis Announces Continued Expansion of its Energy Franchise

• Sunya Stories podcast with ESGEN’s Nader Daylami

• Sunya Stories podcast with Chesapeake’s Jim Grant

• Sunya Spotlight profile on Oxy’s STRATOS DAC project

• Tuesday’s edition – Qatar leveraging LNG lull

DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.