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All forms of energy, including oil and gas, are needed in South Africa more than ever due to rising demand from a growing population and challenges in global energy supply systems, says Ross Compton, senior director for global policy at the EnerGeo Alliance industry group.He said wars, growth headwinds and population growth meant exploration and seismic surveys could not be taken off the table in discussions about South Africa’s energy future, despite the thicket of litigation they were navigating.He said the industry had moved on from the recent prominent court cases, which had reaffirmed the importance of consultation in the process. What remained now, Compton said, was for the government to enhance certainty by finalising regulations in the Upstream Petroleum Resources Development Act. “I think those court cases, really, have just underscored the need for certainty around the regulatory processes. And I think, to a degree, they provided that, particularly the Western Cape High Court case… The court didn’t find them lacking in any regard, in relation to their public participation… environmental assessment and so on.”He said the war in the Gulf, strategic strikes by Ukraine on Russia and weather-related risks to refining infrastructure in the US would continue putting pressure on oil and gas supplies globally. Domestically, South Africa faced a “gas cliff” and limited capacity to refine products, Compton said.The population continues to grow, and it continues to urbanise, which places a lot more emphasis on centralised power.— Ross Compton, EnerGeo Alliance“We’ve got a population of somewhere between 59- and 60-million people. The population continues to grow, and it continues to urbanise, which places a lot more emphasis on centralised power, although that is not to take away the need for decentralised power as well.“Providing resources that facilitate centralised power are certainly very important. Natural gas sits within that nucleus, with all the different elements that you would have seen in the integrated resource plan,” Compton said.Last month, the Western Cape High Court rejected an application by environmental groups and fishing groups to stop an offshore seismic survey in the Orange Basin off the West Coast.Also last month, the Constitutional Court permanently halted offshore gas and exploration rights along the Wild Coast for Shell and Impact Africa.Compton said both cases concerned the legality and adequacy of certain processes, and the Constitutional Court ruling did not amount to banning seismic surveys altogether.“They in no way stop oil and gas development or exploration, and very much the Western Cape High Court, because they found that the applicants’ case was rejected and that basically gives the green light for the company in that case to move forward with their projects … It actually looks more certain on the back of these cases.”The bill must protect public participation and environmental safeguards and recognise customary and informal land rights in ways that guarantee fair compensation. Meaningful consultation with communities affected by gas infrastructure must be a requirement— Lisa Makaula, Green Connection’s advocacy leadHe said that while load-shedding appeared to be in the past, much still needed to be done to secure South Africa’s long-term energy needs, including diversifying energy technologies. “To a large degree, that’s being dealt with, which is obviously very positive, but there are still headwinds in terms of the pending gas cliff and the declining availability within coal generation,” he said.He said oil and gas exploration was a complex process. “Every stage has to go through separate processes along the way to give comfort that everything is being done correctly, [and] that risks have been assessed, and that everybody has been able to have their input through the public participation processes.”However, Green Connection’s advocacy lead, Lisa Makaula, said the UPRDA and the proposed Gas Bill were not aligned with the Climate Change Act and could expose taxpayers to significant environmental liabilities.“The bill must protect public participation and environmental safeguards and recognise customary and informal land rights in ways that guarantee fair compensation. Meaningful consultation with communities affected by gas infrastructure must be a requirement.”The minister of mineral & petroleum resources, Gwede Mantashe, said in a written reply to a question in parliament in June: “South Africa’s oil and gas upstream potential needs to be unlocked. This is one of the best ways of insulating the country against oil shocks.”Business Times
