On Monday, May 9th, Crodiaspora held an important webinar involving people from all over the world, especially Croats. Guest speakers Golan Sarabanja (macro-economist) and George Kovacic (upstream oil and gas expert) participated in the webinar entitled “Energy Crisis-Croatia’s Opportunity”. We discussed the opportunities to bring to Croatia.
The world is facing a full-scale energy crisis that was a challenge before Russia invaded Ukraine. The impact of rising energy prices is not fully perceived by consumers as the petroleum by-products used in packaging, tires and fertilizers are not fully adjusted to current prices.
The main problems of the energy crisis
One particular issue George highlighted in his presentation was energy demand above 2019 levels. Before Russia invaded Ukraine, countries like the United States released strategic petroleum reserves to cope with rising oil prices. On the contrary, Golan added, “People will say that Russia’s invasion of Ukraine is a new moment when it comes to rising energy prices … and it’s certainly natural gas, the most dangerous in the sense that it’s much more difficult. It is not a substitute for oil in the first place. “
Golan said Europe’s main concern would be to supply enough natural gas to warm Europeans in the winter. George also added that even before the pandemic, about 34 million Europeans could not afford to warm their homes sufficiently in the winter when consumption levels were low because people were at home. The above could lead Croats to rely on wood to heat their homes. This can have a negative impact on consumers and the environment.
There is an ongoing panic in Europe. Even politicians traditionally working on a green energy shift have changed their tone and even overturned their coal mining decisions. George said the German High Court in recent months has legalized companies to rob their homes to mine coal. This is an idea that was unthinkable just a few months ago.
The panic also occurred in the most popular green politician, Robert Habeck, co-head and economic minister of the German Greens. “He hasn’t beaten around the bushes. He went to Qatar to negotiate a gas supply contract … If I had to bet, the industry could be closed if needed, but people Needs to be warm because they have access to heat in the winter is a top priority, even in democracy, or even a dictatorship, “Golan said.
Offshore and onshore oil and natural gas are freely available in Croatia. While INA currently supplies natural gas to the northern Adriatic Sea, Croatia is a hub and energy source for Central Europe, keeping the EU away from Russia’s energy. It is also in Croatia’s national interest, as countries like Italy and Germany secure their own supply of natural gas in bilateral energy transactions. Croatia has a functional LNG terminal on the island of Krk. Combining these capabilities with the natural resources we have at our disposal, Croatia can become an energy hub for the region.
A common concern for many exploring oil and gas in the Adriatic Sea is the potential environmental impact of an oil spill. George pointed out that the Adriatic Sea now has illegal littering that would be resolved by producing our own oil. There is also oil infiltration in the Adriatic Sea. In addition, not producing our own oil, the greenhouse gases produced by importing oil from the Middle East, has environmental costs. Producing oil near where it is used reduces the risk of oil spills, reduces greenhouse gas emissions and supports the local economy not only during the tourist season, but throughout the year.
An example of how oil and gas can help tourist destinations is the Kabbalah Bay in Greece. George emphasized in the presentation: “Greece can be used as an example because the ratio of GDP to tourism is actually higher than Croatia. They are also a larger country and a larger economy. But they have oil offshore in tourism. Producing and it’s working very well. What happened in this part of Greece and other offshore production areas is that the tourist season is now 12 months. Why? People do full-time work So I’m paid 12 months a year, I have a family, restaurants and theaters are working, and the cold and cold Europeans from the north like to come south even in November. Enjoy the warm climate in December, February and March. “
In addition, George emphasized Santa Barbara, a US city that supports both tourism and oil production. It is also possible to go sightseeing while producing oil and gas. It can actually help people stay in the area and help locals get up. Croatia has particular advantages as it has infrastructure in both Istria and Southern Italy that facilitates the efficient production and transportation of oil and gas, reducing the risk of oil spills and illegal oil dumps in the Adriatic Sea. ..
Croatia’s energy mix relies on coal (30.3%), renewable energy (26.4%), oil and oil (33.7%). Croatia has a future for carbon capture and storage (CCUS) technology. Over 70% of the carbon captured in Croatia comes from the oil industry and has the potential to generate more economic activity in the developing regions of Croatia. As Golan pointed out, every industry has environmental factors and the energy sector has strict regulations that guide the production of oil and natural gas. Fossil fuels are still a reliable, efficient and stable source of power. Russia’s invasion of Ukraine only emphasizes the importance of energy supply, and as George pointed out, gas prices fluctuate, but we can only prepare for future crises.
If you missed the webinar on Monday, you can watch it in the video below.
https://www.croatiaweek.com/video-a-closer-look-at-croatias-opportunity-in-the-energy-crisis/ Video: Take a closer look at Croatia’s opportunities in the energy crisis