Archive | Enviro,Water

National Forests Bill enforces forestry control

SA forests critical to industry

…sent to clients 25  Aug…. With exports of forest products over R2bn and an industry that employs 170,000forests people, 66,000 of which are in hands-on forestry operations, the National Forests Bill now tabled in Parliament is of considerable interest.

The little known Minister of Agriculture, Forestry and Fisheries, Senzeni Zokwana, has published the draft Bill’s explanatory summary mainly to control and remedy deforestation. This will affect the eleven corporate timber companies operating in South Africa, 1,300 commercial timber farmers and an estimated 20,000 small-scale timber growers.

Sustainability

The Bill states that it will provide for the public trusteeship of the nation’s forestry resources; increase the promotion and enforcement of sustainable forest management and increase the measures to control and remedy deforestation.

woodlandsFrom what it appears, the Department of Agriculture and Fisheries (DAFF) has partially lost control over the whole forestry data collection story, particularly natural woodlands, although it acknowledges that thanks to hired consultants collecting data on the easy question of commercial forestries is where things are more up to date.

Short on facts

One of the major worries is that data on most of 25,000 small-scale timber growers’ data is not collected due to focus on major industries. Whilst intensively managed exotic tree plantations such as pine and eucalyptus (the largest) and wattle are highly regulated, with 70% production going in for pulp & paper production, as far as woodlands are concerned, mainly defined as 10% canopy cover, the areas are mainly exploited for firewood and represent some 40m hectares of natural resource not reported upon.

Last to know anything

On the commercial side where there is an established Investment value of some 1.3m hectares of plantations, wood-roofs-sawmillswhich have an annual sustainable production 20 million tons, such represents the national quoted figure for forest products of over $2bn. Nevertheless, by the time DAFF gets any figures on timber plantations, the data, it seems, is some three years out of date.

The problem is, it appears, that there is absolutely no back data on woodlands either, and trends cannot be calculated. The Bill wants to rectify this. With jobs to create and houses to build, there exists a vacuum in knowledge.

The air we breathe

Bearing in mind that no biomass inventory can therefore actually be represented in calculations for carbon trading purposes in terms of the Reduced Emission from Deforestation and Degradation (REDD) the calculations of the current carbon picture “do not have data baseline”, the Bill states. DAFF says it has a problem in that national figures must start somewhere but it seems that the baseline of what the heritage exactly is will take some time.

Looking around, about 0,5% of South Africa’s total land area is covered by natural forests and the word “natural” remains the expression when calculating figures because things look like a bit of a thumb suck. What is there, however, has to be saved and the quantity or area will define what is needed in money and effort.

Kynasa forests

It is known, for example, that there are some 1 700 indigenous tree and shrub species representing some 530 000 ha. of dense growth existing along the south and east coasts and on the southern and south-eastern slopes of inland mountains in South Africa. The other suspected half is spread over the interior plateaux in isolated valleys and ravines. This represents a somewhat scattered picture.

co-2-graphic“Catch up” is therefore called for in data form in order to start calculating the all-important figures surrounding carbon emissions. However, it appears from the emphasis on definitions in the Bill that the first step is to get control of the current mass extermination of South Africa’s woodlands, which is happening at a fast rate.

Stopping the destruction

To do this some clear definitions at law are necessary first, so it seems, and in order to take action it is necessary to amend the National Forests Acts so as to provide for what actually are “natural forests” and “woodlands” at law and to provide for public trusteeship of the nation’s forestry resources.

If land reform is on the horizon shortly, the perhaps the necessity for this Bill is therefore all the more important. Remedies and penalties for acts of deforestation are called for and it would appear that a great deal of thought has been given, by the State Law Advisor as well as DAFF, as to whether the Bill should remain as it is as a Section 75 Bill and therefore not referable to the Provinces through the NCOP or the Traditional Council of Leaders.

One gets the idea that this is a technical Bill rather than a Bill that needs emotive local participation at this stage.
Previous articles on category subject
New Air Quality Act will deal with major polluters – ParlyReportSA
Carbon offsets paper still open – ParlyReportSA
SA’s COP21 climate change paper debated – ParlyReportSA

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Carbon tax offsets on the way

Tax offsets plan almost ready for Parliament

sent to clients 12 Aug     Only a little reminding is needed that 29 July 2016 was the deadline for comments to carbontax1Treasury on the forthcoming carbon tax offsets plan which Minister of Finance, Pravin Gordhan, has promised will come into effect 1 April 2017 with some saying it might even be as early as 1 Jan 2017.

It was in 2014 that National Treasury published the first carbon tax discussion paper for public comment. It was agreed the that such a tax would be phased in over a period of time, the first phase running up to 2020. The marginal rate was the envisaged at R120 per tonne of CO2 and during phase-one, a basic percentage based threshold of 60% will apply for tax offsets below which tax is not payable in order to assist with transition into the new scheme.

SARS as usual

Everything has been based on South Africa’s commitment to the Copenhagen agreement signed in 2009 to reduce greenhouse gas emissions by 34% by 2020 and 42% by 2025 – below the “business as usual” scenario.   The motivation provided for the tax remains as “so the cost of climate change an be reflected in the price of goods and services”.

sanedi carbon capIt was agreed that the tax would be administered by SARS.    Since that date, whilst the pro and cons of such a tax caused heated debate in some circles as to whether an introduction of a price mechanism could influence consumer and producer behaviour, the inclusion of Eskom in the tax net left many feeling somewhat helpless due to the utility’s enormity.

Eskom maybe dictates

OUTA complained that “Eskom’s various electricity tariff increases of almost three times the rate of consumer price inflation over the past eight years has become a tax of its own on society.”

They added that the electricity increase impact had resulted in fact to a reduction in electricity and energy as a result and this, which coupled with reduced production and consumption, had inadvertently caused a reduction of greenhouses gases having already taken place, OUTA said.   Of course, this remains totally unproven.

Neither Cabinet nor Treasury/SARS have replied to OUTA’s call to note “unintended consequences”.  No Treasury official it appears has felt that the Copenhagen Agreement can be dis-respected and have presumably felt that OUTA’s platform that a drop in national growth, due to global events and construction problems, has had little to do with the actual design of an overall process to cut carbon emissions over the next period of fifty years or so. The argument continues.

Quantifiable is the word

Now the first phase of the tax offsets are being set in concrete with Treasury having called for comment on theemissions final formula for the first phase of tax proposals, proposing, as before in the draft, that companies can reduce their liability for carbon tax by up to 5% or 10% of their total greenhouse gas emissions, depending on their sector, by investing in qualifying projects that result in quantifiable greenhouse-gas reductions.

Treasury says that the qualifying investments and offsets are likely to be in sectors such as agriculture, public transport, forestry or waste management and the accompanying documents note…“The proposal to use carbon offsets in conjunction with the carbon tax has been widely supported by stakeholders as a cost-effective measure to incentivise GHG emission reductions.”

How not to pay tax….offsets

“Carbon offsets involve specific projects or activities that reduce, avoid, or sequester emissions, and are developed and evaluated under specific methodologies and standards, which enable the issuance of carbon credits”, SARS concludes.

It is worth noting that tax legislation usually comes in the form of a “money” Bill which Parliament can debate butgreen scorpion not amend. Should the debate raise issues, then Parliament can address Treasury who will, according to their dictates, reconsider and change if they alone see fit.  

The general feeling seemed to be from hearings was that this event had to happen in line with other established economies, although OUTA has remained strong on its views that Eskom as a major player in the energy mix is distorting the situation.

The Treasury website has all the details of rules on which tax regulations will be based.
Previous articles on category subject
Treasury’s plan for carbon tax – ParlyReportSA
Carbon offsets paper still open – ParlyReportSA
Carbon Tax under attack from Eskom, Sasol, EIUG – ParlyReportSA
Treasury sticks to its guns on carbon tax – ParlyReportSA

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Zuma’s nuclear energy call awaits Treasury

Nuclear energy awaits funding model…..

Sent to clients Dec 10 ….Cabinet’s approval of a financing model for the Nuclear New Build programme is all that is seriously holding up the nuclear energy procurement, the Department of Energy (DOE) has told Parliament’s Select Committee on Economic Development.

Z MbamboThis was said by Zizamele Mbambo, DDG, Nuclear, DOE, when giving the most recent update to parliamentarians on the background to the South Africa’s nuclear programme. In giving the history of SA nuclear development, he said that South Africa began its nuclear energy power plan in 1985 with Koeberg in Cape Town and the country should have its second plant up and running by 2023.

This much later programme was the culmination of a process which was re-started by Eskom in 2006 with the approval of the IAEA but then stopped by SA during the financial crisis in 2008, he said.

Start-up again

Later in 2013, much had changed on the nuclear energy supply situation because of technological advances in safety and the Russian and Japanese experiences. South Africa therefore requested in that year a specialised report from IAEA with their recommendations, the first country to do so where there was already a successful nuclear energy programme running.

IAEA supplied such a report with ten recommendations which South Africa will strictly adhere to, IAEA Mbambo said, these recommendations being in the public domain. The New Build programme would only be started upon a certification that all such recommendations had been met, a requirement of South Africa’s own nuclear energy regulator.

The National Nuclear Energy Executive Coordination Committee was earlier established by Cabinet in 2011 and the “2030” plan was endorsed by Cabinet the following year. In 2013, DOE was appointed as procuring agency. The Nuclear Energy Policy of 2008 still shapes South Africa’s vision for nuclear power, Zizamele Mbambo said.

Nuclear sellers

Inter-governmental agreements (IGAs) have so far been signed with five vendor countries and these IGAs lay the foundation for trade, exchange, nuclear technology and procurement with the particular vendor. It was conditional that all vendor nations must have signed nuclear non-proliferation agreements.

The principle behind South Africa’s Nuclear New Build programme was to replace the retiring coal fleet meeting additional demands and providing certainty to investors on energy, he said.

In answer to parliamentary questioning on the IGAs signed as a result of a “vendor parade”, Mbambo stated the following:-

The Russian Federation had agreed to assist in design, construction, operation and decommissioning of the nuclear units. Russia would also assist in the localisation of the manufacture of components for the nuclear units.
France would assist in applied research and development, and also with accounting and physical protection of nuclear waste.
China would assist with experience exchange, personnel training and enhancing infrastructure development.
The USA would assist in development design, construction, operational maintenance and use of reactors for reactor experiments. USA would also assist with health, safety and environmental considerations.
South Korea would assist in the use of nuclear energy for electricity generation, heating and desalination of salt water, and in dealing with radioactive waste.
Canada and Japan were in negotiation with SA, and these IGAs were in the final stages.

SA’s vision, Mbambo commented, was to become autonomous in nuclear energy from the beginning to end of the value chain.

Waste worries

He would not comment, however, on the court case to be heard with Earthlife on the issue of nuclear logoradioactive waste as this was sub-judice, he said.    He also said IAEA had been perfectly happy with previous Koeberg arrangements as far as waste was concerned but obviously plans had to be extended.

In answer to MPs questions on cost and the next stage of the programme, he agreed that nuclear option was indeed highly capital intensive. However within 20 years, Mbambo said, the capital investment would have been reduced to nil and in view of the long 80-year life of a plant, the following 60 years would come with nil capital cost, resulting in cheaper electricity relative to the time frame.

Future dreams

It was foreseen, he said, that with nuclear energy having lower maintenance and fuel costs the relative costs of electricity tariffs to industry and consumer could be reduced also in relative terms during the 60 year period and energy sales could become a “cash cow”.

When asked about hydro energy sources and gas development, Mbambo said this was outside of his brief to answer.
Other articles in this category or as background
National nuclear control centre now in place – ParlyReportSA
Minister Joemat-Pettersson clams up on nuclear – ParlyReportSA
Nuclear partner details awaited – ParlyReportSA

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Environmental legislation updates

Changes to environmental legislation….

dea logosent to clients 10 Oct….. The Department of Environmental Affairs (DEA) has published for comment a whole series of amendments to the cluster of laws generally referred to as the NEMA laws, or South Africa’s national environmental legislation.

The changes affect mining and quarrying, the industrial and manufacturing sectors and relationships of the many sectors with local authorities on licensing.

The draft Bill refers to the overarching National Environmental Management Act; the National Environmental Management: Protected Areas Act; National Environmental Management: Biodiversity Act; the National Environmental Management: Air Quality Act; the National Environmental Management: Integrated Coastal Management Act and the National Environmental Management: Waste Act.

Piggy bank for closures

In the case of National Environmental Management Act a number of changes are proposed, perhaps the most notable being ” to provide clarity to the definition of “financial provision” that an applicant or holder of an environmental authorisation relating to mining activities must set aside financial provision for progressive mitigation, mine closure and the management of post closure environmental impacts”.

NEMA generally provides that if environmental harm is authorised by law, such as a permit issued under any environmental law, the relevant operator is obliged to minimise and rectify such harm. Where a person fails to take reasonable measures to minimise or rectify effects of environmental pollution or degradation, the relevant authority may itself take such measures, and recover costs from the responsible operator. Failed mining operations apparently have presented government with little option but to use taxpayer’s money.

With the recent amendment to provide for liability for historical pollution any operator occupying land may also be liable in future for remediation costs under the NEMA: Waste Act equally and this is notwithstanding that the activity is authorised by permit. All five laws are designed to intertwine, the Management Act amendments say.

Mineral Resources only

Other changes under the National Environmental Management Act provide clarity that “the Minister responsible for mineral resources is also responsible for listed or specified activities that is or Is directly related to prospecting, exploration, extraction or primary processing of a mineral or petroleum resource.” Various other changes are proposed which should be read by parties affected.

The changes under the NEM: Protected Areas Act are relatively minor providing for the chief financial officer of the SANParks to be on the board; various new offences in marine protected areas and to clarify certain offences andenvironmental2 procedures.

Again under the NEM: Biodiversity Act changes are proposed on board representation to include technical experts; steps, actions or methods to be undertaken to either control or eradicate listed invasive species and, importantly, to ensure that MECs in the provinces “must follow a consultation process when exercising legal powers” under the Act.

Air quality ; Who licences what

Under the NEM: Air Quality Act the issue of who does what is clarified for municipalities on listed unlawful activities and the proposals provide clarity on the issue of a provincial department responsible for environmental affairs is the licensing authority where a listed activity falls within the boundaries of more than one metropolitan municipality or more than one district municipality and to deal with appeal processes.
Other articles in this category or as background
NEMA: Waste Bill passed – ParlyReportSA
Environmental pace hots up – ParlyReportSATougher rules ahead with new evironmental Bill – ParlyReportCoastal environment bill proposals clearer – ParlyReport

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SA’s COP21 climate change paper debated

sent to clients 13 October….

All on climate change but not cost…

cop21 logoAlmost always ignored at the recent parliamentary public hearings on the SA COP21 climate change submission was the issue of finances, probably the essential ingredient that should have been debated as part of South Africa’s position in the forthcoming  conference in Paris on intended targets for reduction of greenhouse gases.

After two full days of submissions, with no time for committee member questions from MPs in the light of time restraints and the re-presentation of papers in Xhosa, an impression was gained that there remained the same sharp divide between the providers of statistics that clearly showed what a future world would look like if South Africa and other countries continued on existing paths and those who called for reality in the light of the fact that South Africa is a coal-based economy and will remain so well into the mid-century.

State developmental call only

Surprisingly costs to the tax payer and to business and industry featured little in the proposed department of environmental affairs (DEA) COP22 submission, other than by emphasing the point by investing sooner was a more advantageous position to be in than later, when the cost of “catch up” would be far greater.

The submission is to be South Africa’s call on implementing their portion of 2015 COP agreement from its Green Climate Fund and which reserve fund is supposed to be capable of mobilising $100bn from 2020 onwards.  Also to be resolved is the issue of the immediate sources of funds and to capitalize into reality for use what already exists in the fund.

Maverick viewpoint

The one person who did approach the issue of funds but who fell into the category of a “denialist”Phillip lloyd according to environmental observers, was Prof. Phillip Lloyd of the Energy Institute, Cape Peninsular Institute of Technology, a known detractor of climate change. 

He claimed that in fact climate change issues represented a massive multi-billion industry with a potential turnover of R1,174bn. It was staffed by thousands of NGOs around the world, he said, employees of sensitive international companies, whole government departments and enormous amount of diverted funds that could be put to better use.

He claimed that the current warnings on climate change and “doomsday scenarios” were largely based on unsubstantiated statistics, or at the very least, exaggerated claims. Such funds should be diverted to development, not wasted on pointless conferences, he stated, and technologies that could not hope to meet the demands of growing populations.

Fact or fiction

He showed a graph of rainfall records for England and Wales going back to AD 1750 which indicated a mere 4% rise over the entire period and whilst indeed CO2 emissions , according to him, had increased alarmingly affecting health this was in no way connected to climate change because temperatures had only increased 1%, part of a long process of global warming that went back to the globe’s emergence from the last Ice Age.

Similarly, he noted, rising sea levels had been going on for “thousands of years” but the current level of annual sea rise was dropping in terms of archaeological and geological studies conducted, again over the centuries. He said that the current spend globally on the whole so-called climate change awareness programmes and infrastructure spend amounted to some R15,500 per person globally and “sooner or later this hype had to come to an end”, he concluded.

The chairperson thanked Prof. Lloyd with a sense of amusement.

Developmental help

gridsAnother issue raised regularly regarding the DEA COP 21 submission hearings was the call for capacity building to handle new clean energy resources, a major problem in many developing countries. Financial and technology mechanisms had to be shared and adapted wherever possible, particularly in countries where forced change would stunt economic growth, the paper before them stated.

Most submissions focused on the fact that the two issues had to be in harmony but few could expand how this could be achieved successfully, some submissions just taking the “green at all costs” approach. Nevertheless, in broad terms, all submission except the one acknowledged the urgent need for some sort of structured approach to the agreed need for climate change programmes.

Most submissions also made reference to the activities of Eskom or Sasol in one way or another, referring to such in one case as “the primary polluters in the South African context”.  Subjects brought up varied from fracking to small enterprise farming and renewable energy supplies to carbon capture.

In the one corner….

Greenpeace maintained that listing nuclear energy as “low-carbon” option was disingenuous in that Greenpeacenuclear life cycle in itself was carbon intensive and should not be referred as an energy component for clean renewable alternatives and preferably removed altogether.  

Other predictable submissions came from such bodies as Earthlife Africa and the World Wildlife Fund, who specifically named fossil fuels as the major problem, one of the few times vehicle fuel emissions were mentioned in the two days.

COSATU complained that the use of nuclear energy did not create jobs and would not help the economy in any way but did raise the issue that the effect of global warming was a fact and would be ”devastating as far as employment was concerned”.

The legal view

The Centre for Environmental Rights (CER) stated that South Africa’s negotiating position at COP 21 should succeed in giving effect to section 24 of the Constitution regarding the right to health but they complained that DEA’s long term plans, which included accommodating coal-fired power generation and its highly water-intensive processes had no hope of meeting constitutional requirements unless urgent changes were made.

They pointed out that aside from Medupi and Kusile, the Minister of Energy’s plan to procure an additionalmedupi 2500MW of coal fired power included seven further coal-fired plants yet to be built and which were in the planning stage, mostly in Limpopo and Mpumalanga. Both these provinces, CER said, were highly water stressed areas and had zones already declared as health priority areas due to poor air quality.

Even the right of access to drinking water was threatened in these areas, they pointed out, both issues, air pollution and lack of drinking water in their view representing potential breaches of constitutional privilege.

Top down problems

A number of interesting submissions were made on the problem of local government implementation of climate change mitigation plans.    A particularly important submission came from SA Local Government Association (SALGA), who pointed to the fact that whilst climate change was a national issue and called for a national approach, this did not change the fact that implementation and controls, regulations and planning mostly had to be done by cities and municipalities.

SALGA said there seemed to be no cohesion either in funding or in policy between national government and to some extent provincial government, but certainly not with local governmental authorities. They called for an “enabling framework” that could be adopted in key localised areas and so that “the voice of local government could be heard” by those paying for it.

Methane and fracking

A scientific paper known as the Howarth Report, emanating from Cornell University, was presented by a private individual, Marilyn Lilley, which focused on hydraulic fracturing and the greenhouse gas footprint left by this fracking drilling, the Howarth Report specifically focusing of fracking in the United States of America. Ms Lilley related these findings in her presentation with that of the 200,000sq km area released for fracking ventures in the Karoo.

A quick read of the Howarth Report indicates that in the US during the life cycle of an average shale-gas well 3.6 to 7.9% of the total production of the well is emitted as methane gas. This is at least 30% more and twice the harmful effect as gas extracted from conventional oil wells, the report says.

Also there is a 1.4% leakage of methane during storage and transmission of shale gas. This is the far the most dangerous component of greenhouse gases, the average black smoke emitted from a factory containing on the whole mainly harmless soot, the report concludes. Ms Lilley said that methane was “enemy number one”, adding again that methane had a far greater effect on global warming than any amount of coal fired energy generation.

Methane spouts

Fracking_GraphicShe also said that during the hydraulic fracturing stage of a drilling, which would go to at least 3-4kms vertically to a shale layer and then for approximately 2kms horizontally along the seam, fracturing then takes place with explosives and some 20 million litres of water with silica sand and chemicals pumped in to cause the methane gas to return to the surface with the then toxic water.

She said well pads are usually built 3-4 kms apart in a grid formation and each pad can have up to 30 wells, each being capable of being fracked a number times and each frack taking about 20 million litres of water.

She concluded that fracking whilst be making an unpleasant major contribution to greenhouse gas emissions, the process rather contributed more to global warming which was the actual root problem. She called for fracking and consequent methane gas emissions to be accounted for in South Africa’s COP 21 submission as a subject in itself and for a moratorium to be declared on fracking exploration and subsequent gas extraction.

She also pointed to the fact that disposing of the then toxic water extracted, in some cases needing irradiation, would become an immense and unmanageable waste problem and the light of the distances involved in the South African scenario.

Agri-plans and consequent food processing development

farmingA considerable number of submissions focused on the importance of establishing viable small farming units and a completely self-sustaining mini-agricultural food industry in specially located zones. The proposers suggested suitable cropping of vegetables and staple foods in order preserve the food chain for poorer communities under climate change conditions, the zones themselves contributing to healthier emissions with normal synthesis.

Carbon capture investigation

The South African National Energy Institute (SANEDI), reporting to the Central Energy Fund, gave a report- back on their work in the South Eastern Cape where a pilot drilling project, carried out on-shore for reasons of cost, was exploring the possibility of large-scale carbon storage at sea.    Prof. AD sanedi carbon capSurridge described carbon emissions capture as part of the “weaning off process necessary” whilst the country moved slowly from a fossil fuel based economy to a renewables/nuclear mix.

This pilot storage plant should be running by 2016, SANEDI said, and “commercial rollout possibilities concluded by 2020”.

Marathon run

In closing, Jackson Mthembu, chairperson of the Environmental Affairs Parliamentary Committee, said that “in South Africa, we are known for differing with respect”. This had been the purpose of the hearings, he pointed out.

He concluded by saying that climate change, as an issue, cut across all facets of government and consequently the parliamentary submissions collective summation would be shared across the desks of all Ministries involved.

Other articles in this category or as background

Environmental pace hots up – ParlyReportSA

Tougher rules ahead with new evironmental Bill – ParlyReport

Electric cars part of climate change response – ParlyReport

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Gas undoubtedly on energy back burner

Energy mix on gas unresolved…..

LP gasNot one word on gas and gas exploration, gas pipelines or gas as a contributor to the integrated resources plan has passed through Parliament in nearly one year. The last word was in respect of gas, whether oceanic or land-based, was the knowledge that fracking regulations had been published, the dropping of the oil price seeming to cool off any comment and certainly statements by international investors and companies.
President Zuma has, however made passing reference to Operation Phakisa, the plan to develop South Africa’s oceanic resources but most parliamentary reference to this programme has been in reference to the recent press releases by government in the form of a long term wish to build up South Africa’s maritime ability; create an international ship register and regulate for a merchant shipping fleet.
Going back a bit
In a parliamentary question in the National Assembly last year, Mr. S J NJIKELANAa, previously chairperson of the Energy Portfolio Committee, asked for a written reply by the then Minister of Energy on how far gas exploration had progressed and what urgent state intervention was planned, particularly as far as containment of fuel prices was concerned.
The reply came from the Department of Energy (DOE) in a reply that was somewhat evasive in that it summed what everybody knows; that the Integrated Resource Plan (IRP); the Integrated Energy Plan (IEP;) and the Gas Utilisation Master Plan (GUMP) are amongst the measures which were developed to improve South Africa’s multi-source security of energy supply.
The reply at the time gave responses on the then stage of renewable energy aggregating to cumulative contribution of 17800 MW to the IRP’s final estimate of energy from all sources of 40 000 Megawatts (MW). All of this really helped nobody.

Sourcing of energy
The second contributor to the formula was nuclear power contributing a much quoted 9600MW (and now expected to be more) and hydropower at 2600 MW, with“75% of new generation capacity being derived from energy sources other than coal”, it was stated.

 DOE finally got round to GUMP, describing it as “the development of a gas pipeline infrastructure for South Africa’s needs and to connect South Africa with African countries endowed with vast natural gas resources” but at the time DOE was still recovering from the shock of splitting up from environmental affairs and could not separate gas exploration from mining exploration, in that the Department of Mineral Resources was deeply involved. A total figure for gas has not been formulated.

Another problem for DOE.

In reality, the Petroleum Agency of South Africa (PASA) is technically responsible for GUMP although gas exploration seaDOE’s hydrocarbons division seemed to have been lumped with the problem of what has been described by most authorities and energy specialists as an “exciting hope” for solving SA’s energy problems.
In the meanwhile, it has become the poor child of the energy mix, Minister Joemat-Pettersson recently explaining last week DOE’s poor performance and lack of response on the gas issue as being due to short staffing and “too many issues” on hand.

Last definition

GUMP in fact, (when Parliament was last told} would take a 30-year view of the gas industry from regulatory, economic and social perspectives and this was in the final stage of internal approval and was expected to be released for public comment during the second quarter of the 2015 financial year.
The request for IP proposals for gas-fired generation through a gas-to-power procurement programme for a combined 3 126 MW allocation was expected to be released to the market in September this year, with a bid submission phase planned for the first quarter of 2016.

It seems that South Africa’s DOE can only handle one problem at a time. First it was Eskom and electricity and then the nuclear tendering process, which is in fact a very long term solution to South Africa’s energy problem, as put by one member.

Behind closed doors

Gas exploration, as a subject in itself, benefited from a final decision (which in fact is still mostly rumour in Parliament and unreported) that the Minister Rob Davies’s solution not to acquire 20% -25% “free carry” in gas exploration “finds” seems to be the last definitive action to be taken by government on the whole question of gas exploitation and development.

Meanwhile, Minister Joemat-Pettersson, Minister of Energy, was quoted in the media (and we quote tina-joemattEngineering News specifically) as saying that nuclear power was staying at 9600MW and hydropower at 2600 MW.
The Minister added, “We have paid little attention to gas . . . We have been preoccupied with nuclear [energy].  The South Africa we [are] dealing with now is not the same [as the one we dealt with] in 2013 [when many energy-generation plans were put into play]; the scenarios have changed,” she said to the Creamer organisation.

Not on the agenda

In the remaining few weeks of the third parliamentary calendar sessions, no meetings of the parliamentary committee on energy are scheduled for this vital component of the energy mix, although the anti-fracking lobby was particularly evident at a recent energy committee meeting on the five nuclear vendor agreements.

karoo2They were particularly agitated to hear that the South Korean nuclear vendor offers included development of uranium deposits as part of their deal, such deposits known to be in the Karoo. The only movement recently therefore on gas development would seem to be in the area of Sasol development in infrastructure development locally, presumably in pipelines, and a rather “cool” statement from Shell Oil on fracking possibilities in the Karoo related the world price of oil.
The shortage of liquid petroleum gas (LPG) to meet market demand appears to be the only gas issue to coming before Parliament in the near future.
Other articles in this category or as background
Fracking, shale gas gets nearer – ParlyReportSA
Competition Commission turns to LP gas market – ParlyReportSA
Gas Utilisation Master Plan gets things going – ParlyReportSA
Oil sea gas/debate restarted by Parliament
Uncertainty in oil and gas exploration industry

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Minister Joemat-Pettersson clams up on nuclear

Nuclear deals cannot be transparent

(published to clients 25 Sept)

In a meeting to explain intergovernmental agreements so far made by South Africa on the nuclear New tina-joemattBuild programme, Department of Energy DOE and DDG of Nuclear, Zizamele Mbambo, was completely overshadowed by the requests by Minister of Energy, Tina Joemat-Pettersson, to preface the entire presentation with her own comments. She also was to speak first in answer to the many direct and pertinent questions from Opposition MPs directed at DOE.

In both cases it became less and less clear how much the nuclear programme was going to cost the country.  Also it became unclear what stage the Cabinet had reached as far as decision making was concerned, causing the chairperson of the committee, Fikile Majola (ANC), to remind the Minister that Parliament was supposed to provide oversight on financial commitments to other countries and certainly must be consulted before any such agreements were signed.

Russia dominating events

p van dalenIn an acrimonious exchange between P Van Dalen (DA) in summarising the areas of co-operation between South Africa and the Russian Federation, France, China, South Korea and the USA, Van Dalen remarked to the Minister that the whole picture looked like “Russia versus the Rest”. He wanted to know why the Russian co-operation areas were more informed and more extensive. He gave the example of the Russian agreement offered naming the actual location sites in South Africa for three possible structures.

Minister Joemat-Pettersson responded that the “areas of co-operation still had to be finalised” with Japan, to which country she had yet to visit, and Canada. The Russian Federation had done a particularly good job, she noted. Little information was given for Chinese involvement, it being assumed that President Jacob Zuma’s visit to that country would result in an update. Media reports state that Japan is teaming with Westinghouse.

 Just to keep some happy

 The Minister complained that Opposition members were making the Ministry’s life untenable by constantly demanding information on the extent, the cost and the timing of the New Build nuclear programme when too much information given out would compromise the bidding process. She denied there was any preferred bidder in the process.

She said DOE was supplying information to the meeting, “going as far as they could without compromising the whole exercise” because the Opposition parties had been very demanding. But it was still too early to make all documents available.

No sense

Gordon McKay demanded to know how it was then that Minister of Finance Nene had, in a mediagordon mackay DA briefing recently, stated that the “country could not afford a nuclear build programme” and how it was to be paid for?      If nobody knew the cost, what was Minister Nene talking about, he asked.   He said that Parliament was having “to rely on second hand information from the media” and this was wrong because it represented non-disclosure.

He also wanted to know who it was in South Africa that was “qualified enough to make a judgment call on both selection of the of the winning bidder and also be satisfied on the cost to the taxpayer.”

It was at this point that a surprising fact emerged.     Despite the Minister’s stated inability to answer on total project costs, it was admitted by her that an “independent consultant” had not only completed and supplied a project modelling report but a financial model as well.

All will be revealed

koebergNo further information could be supplied, the Minister said, either on who this was and estimated costs but she promised that the Committee would be briefed once the vendor bidding process was complete. A date at the end of 2015 was promised for further information to be supplied to Parliament on costs, plus the independent modelling reports “in due course”.

The Minister stated that again and again that “transparency was her target as far as Parliament was concerned” but said that she was constrained by the nature of the bidding at this stage. She however confirmed that a nuclear contribution “probably greater than originally expected” had to be part of the energy mix if South Africa was to meet its COP 15 environmental targets agreed to internationally.

DOE has a schedule

Z MbamboDDG of DOE, Nuclear, Zizamele Mbambo in his presentation, confirmed to Parliamentarians that the department was at the stage of the completion of pre-procurement processes and that commencement of procurement would start in the second quarter of 2016, with finalisation of partners by the end of the calendar year.

The intergovernmental agreements at present being concluded were displayed and covered the technology to be selected and construction: research reactor technology and construction; financing and commercial matters; manufacturing, industrialisation and localisation; human resources and skills development; public awareness programmes; safety liability and licensing; nuclear siting and permitting; the nature of both front and back ends of the fuel cycle itself and non-proliferation matters.

 Waste disposal issues

Opposition members wanted to know why waste disposal was not raised as a requirement and DDG Mbambo explained that South Africa had already enacted legislation to adequately cater for this issue and was deeply involved in waste disposal, quoting the Koeberg model.
However, it was notable that France and the USA contained “waste management areas of co-operation” in this regard, whereas the Russian contribution referred to enhancing support for the current legislative and regulatory environment, once again indicating a clearer knowledge of local conditions.

The DOE presentation went no further than just enumerating on a comparative basis each bidder’sbrics partners technological and commercial contributions in broad terms. However, it was notable that the Russian proposals went further than others on the degrees of localisation in the form of manufacture of components and skills training. It also included the “joint marketing and promotion of produced products to third country markets.” A considerable number of South Africans were already in Russian training exercises as they were in China.

Uranium in Karoo

The South Korean proposals were noticeably different in the area of contributing towards desalination of salt water projects and support in various aspects of nuclear research and the exploration and mining of uranium. At this stage the Chines contributions were limited for reasons stated but, again, noticeable in China’s paper was the expression “the development of new technology for civil nuclear energy for the (SA new) build programme and Republic of China and other third world countries.”
Other articles in this category or as background
Nuclear partner details awaited – ParlyReportSA
Nuclear and gas workshop meeting – ParlyReportSA
Nuclear goes ahead: maybe “strategic partner” – ParlyReportSA
National nuclear control centre now in place – ParlyReportSA

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Treasury’s plan for carbon tax

Morden’s thinking on carbon tax….

cecil mordenBearing in mind Cabinet has not agreed to a carbon tax at this stage, Cecil Morden, National Treasury, explained to the portfolio committee on environmental affairs that the carbon tax as currently proposed could reduce South Africa’s GHG emissions by between 35% and 45% by 2035.

It had to be noted, he said, that SA was in the top 20 in absolute global emissions.

Looking back, Cecil Morden said carbon tax policy proposals began with the Environmental Fiscal Reform Policy Paper in 2006, a Carbon Tax Discussion Paper in 2010 followed by a Carbon Tax Policy Paper 2013, a Carbon Offsets Paper in 2014 and now the current legislative drafting process.

The anticipated carbon tax implementation date, Cecil Morden said, was still mid-2016.

Balancing the books as well

The problem now was with South Africa joining with others COP15 in 2009 with a commitment to curbemissionsgraphic GHG emissions by 34% by 2020 and by 42% by 2025, the question was now of how to reduce the need for higher levels of growth and the energy and carbon intensive nature of the SA economy against the world commitment to reduce GHG emissions.

Cecil Morden told parliamentarians that there was always a concern that climate change could slow or possibly even reserve progress on poverty eradication based on the fact that most developing countries were more dependent on agriculture and other climate-sensitive natural resources for income and quality of life.

In addition, developing countries usually lacked sufficient financial and technical capacities to manage climate change, particularly in Africa and South Asia. Both of these continents seeing more substantial increases in poverty relative to a baseline without climate change, yet the cost of which would still fall disproportionately on the poor.

Done by offsets

carbontax1The rationale behind carbon tax was a means, Cecil Morden said, by which government can intervene by attempting to level the playing field between carbon intensive, fossil fuel based firms and low carbon emitting sectors using renewable energy and energy efficient technologies using a carbon offsets scheme.

In referring to the several carbon tax modelling schemes that had been produced and results of studies, the model proposed could reduce GHG emissions by between 35% and 45% by 2035, the study to be made public by the end of July 2015.

The major concerns at the moment and noted by Treasury were the impact of higher electricity prices on low income households and on the international competitiveness of exports in the world market.

Killing the cat

“The choice”, Morden noted, “had been between command and control measures, in other words byemissions regulation or by market based instruments. In other words by regulations that used legislation or administrative measures that proscribed certain outcomes usually targeting outputs or quantitative factors such as minimum ambient air quality measurements.

The second option of policy instruments that attempt to internalise environmental externalities through the market by altering relative prices that consumers and firms face.”

“Although this second option”, Morden said, “ does not set a fixed quantitative limit to carbon emission over the short term, a carbon tax at the appropriate level and phased in over time to the correct level will provide a strong price signal to both producers and consumers to change their behaviour over the medium to long term.”

He concluded that an introduction of a carbon price will change relative prices of goods and services, making emission intensive goods more expensive relative to those that are less emission intensive”.

Behavioural changes

Africa MoneyCecil Morden said that Treasury saw this as a powerful incentive for consumers and businesses to adjust their behaviour, resulting in a reduction of emissions.

MPs expressed concern that carbon offsets could be manipulated so they had to be related to actual reductions of emissions on paper, Morden replying that in terms of off-sets, there were going to be “quite rigorous requirements for how it should be monitored and Treasury would work closely with the DEA and DoE in this regard.”

Carbon thresholds the hope

In the discussions that followed Cecil Morden further noted that a carbon budget system was an evolving mechanism using information from companies to inform the budget. After a number of years, he said, the relative thresholds could be captured into absolute thresholds. The other possibility was to move towards an emission trading scheme and use the carbon budget just as an indicative monitoring tool, rather than as an instrument of penalty.

He then explained the use of border tax adjustments to try to level the playing field on imports. What ever happened, however, he promised, the entire matter would come before Parliament before South Africa participated in COP21.

Other articles in this category or as background
Carbon Tax under attack from Eskom, Sasol, EIUG – ParlyReportSA
Treasury sticks to its guns on carbon tax – ParlyReportSA
Minister Gigaba to line up Eskom for carbon tax – ParlyReportSA
Carbon tax not popularly received by Parliament – ParlyReportSA
Gordhan gives out strong message on carbon tax – ParlyReportSA
WWF warns that carbon tax must come to SA – ParlyReportSA

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Nuclear partner details awaited

DoE gives update on SA nuclear plan….

russian nuclearThe Department of Energy (DoE) says it is the sole procurer in any nuclear programme and that “vendor parades” had been conducted with eights countries, the results to be announced before the end of 2015. To give cost details, they said, would “undermine the bidding process”.

The situation regarding South Africa’s current intended nuclear energy programme was explained during a parliamentary meeting of the Portfolio Committee on Energy, DoE confirming that a stage had been reached where nuclear vendors had been approached and DoE staff were being trained in Russia and China.

Eskom not involved

Neither DoE, nor the Minister of Energy, Tina Joemat-Pettersson, who was also present would givetina-joematt cost estimates nor speak to the subject of financing other than the fact the minister admitted that the idea of Eskom being involved in the building programme in the style of Medupi and Kusile was a non-starter.

At the same time Minister Joemat-Pettersson announced that a new Bill, the Energy Regulator Amendment Bill, was to be tabled that would give Eskom the right to appeal against tariffs set by the National Energy Regulator (NERSA). This followed upon the news that Eskom would be given powers to procure, which must lead to the assumption, said opposition MPs later, that Eskom will recoup costs of financing through electricity tariffs.

The Minister said the renewable IPP programme involving the private sector had included multinationals and had been “hailed as a success” and the deal that would be struck with nuclear vendors would be on best price in terms of the end price for the consumer. Any bidding would be conducted in the “style of the IPP process”, which included support of the process of black procurement and skills training.

Contribution to grid still “theoretical”

modern nuclear 2Deputy Director, Nuclear, DoE, Zizamele Mbambo, explained to opposition members that whilst government had in principle decided to include nuclear energy in the energy mix for the future, DoE itself was still only at the stage of establishing all costs involved to the point of actual connection of a theorised figure of nearly 10GW to the national grid. To disclose costs at this stage would undermine the bidding process, he said.

The main purpose of the costing exercise still remained the final cost the consumer, he said, in terms of the NDP Plan 2030, a phased decision-making approach over a period of assessment having been endorsed by the Cabinet in 2012. The whole exercise of deciding what the costs would be was therefore relevant to how much coal sourced power would contribute to the baseload of the energy mix by 2030.

Deal or no deal

Zizamele Mbambo confirmed that in 2013, DoE had been designated as the sole procurer of the nuclearsmall nuclear reactor build programme and “vendor parades” had been conducted with Russia, China, France, China, USA, South Korea, Japan and Canada. The strategic partner to conduct the next stage, the New Build Programme itself, would be announced before the end of 2015, Mbambo said, by which time costs would have been established and treasury consulted.

At this stage no deal had been struck, he confirmed.

As distinct from the actual vendors per se, and any deals, Mbambo said that international agreements had been struck with interested counties on the exchange of nuclear knowledge, training and procurement generally.

DoE trainees already in China

chinese sa flags“Fifty trainees already employed in South Africa’s nuclear industry had already gone to China for ‘phase one’ training with openings for a further 250 to follow”, he said, noting that the Russian Federation had offered five masters degrees in nuclear technology.

The New Build nuclear programme was at present based on providing eventually 10GW of power to the grid but DoE confirmed that the indirect effect on the economy from “low cost, reliable baseload electricity is logically positive but difficult to assess”.

Zizamele Mbambo showed a graph of the possible integration of energy from coal, nuclear, hydro (imported), gas and renewables over a period, stating that nuclear was clean, reliable and would ensure security of supply with “dispatchable power.”

Opposition Members complained that the process seemed likely to make the price of electricity unaffordable to the poor and have a major impact on the cost of doing business in South Africa.

Nuclear vs. coal

Mbambo was at pains to explain that in the long term, the cost of nuclear energy was considerably lessgrids than coal and this was the reason that, for future generations, South Africa had to embark on a course that not only lead to cleaner but cheaper energy.

As a final issue, DDG Mbambo touched upon the question of approval by the International Atomic Energy Agency (IAEA) and explained that any relationship with this UN body was on the basis of a peer review.

This covered nineteen issues from nuclear safety management to radioactive waste disposal and was not an audit, he explained, South Africa already having been an experienced nation in nuclear matters from medical isotopes to nuclear weapons. It was pointed out to members that that IAEA merely carried out reviews and made input.

Up to speed or not

IAEAIt was during the response to the budget vote speech on the subject of the IAEA, that Opposition Shadow Energy Minister, Gordon Mackay said that the agency had found South Africa deficient in more than 40% of its assessment criteria.   In response, DDG Mbambo did not refer to the current state of the country’s nuclear readiness at any point but confirmed there was a great need for training and this was now the emphasis.

He said the relationship with the IAEA was in three phases covering purchasing, construction and operations and although it was thirty years since South Africa had a nuclear building programme at Koeberg, the current contribution to nuclear technology was recognised.    The programme now was to create a younger generation of nuclear experts, the main issue being to build technology capacity and train trainers in the state nuclear sector.

Reactor numbers

Mbambo concluded his presentation by stating that DoE was in discussion with treasury specifically on this issue of funding training, Minister Joemat-Pettersson adding that some six to eight reactors were planned  but a this was very early, the weight that “price” would carry in determining a strategic partner was not decided.

Other articles in this category or as background
Nuclear goes ahead: maybe “strategic partner” – ParlyReportSA
National nuclear control centre now in place – ParlyReportSA
Energy plan assumptions on nuclear build out in New Year – ParlyReport

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Operation Phakisa to develop merchant shipping

Operation Phakisa: SA needs own merchant ships…

mapafrica&saCurrently, the cabinet is focused on Operation Phakisa, or South Africa’s exploitation of its oceanic resources, bearing in mind it has 6,000kms of coastline. In its budget vote presentation to Parliament, the department of transport (DoT) has indicated that it has every intention of not only building a South African maritime fleet but encouraging “Panama type” registration for vessels around the world.

Dramatically announcing that South Africa had to become “a maritime nation”, minister of transport, Dipuo Peters, said that a maritime delivery unit had been established within DoT to support the NDP’s key growth strategy for the development of the oceanic economy, launched earlier by the President in his SONA address as Operation Phakisa.

Focus on shipping world

MSC-Beatrice-PanamaCurrently she said DoT had introduced a new shipping tax regime for international shipping which exempts qualifying ship owners from paying income tax; capital gains tax; dividend tax; and withholding tax on interest for a number of years.

Minister Peters said, “We believe this tax exemption will undoubtedly encourage the South African ship register to be sought-after internationally and we are further engaging national treasury to consider a special tax regime for coastal and regional shipping.”

In June 2012, a department of DoT led by Tsietsi Mokhele of the SA Maritime Safety Authority, called for a policy framework to enable the establishment of both a coastal and a blue-water merchant fleet, following a meeting with the then NA Speaker, Max Sisulu, who had called for more information on where South Africa stood with regard to maritime affairs internationally.

All foreign vessels

Mokhele told Parliament’s transport portfolio committee that about 98 percent of South Africa’s total import and export trade was currently carried by foreign ships and currently South Africa does not have a single own-flagged commercial vessel on its shipping register.

He said at the time, “South Africa has no ships on its register and paid in 2007 about R37bn in maritimeSAFMARINE_CHAMBAL transport services to foreign owners and operators and had approximately 12,000 vessels visiting the country’s eight commercial ports each year”.

In the previous year (2011), 264 million tons of cargo were moved by sea at an estimated cost of R45bn to the country the committee heard and in the BRICS grouping, South Africa stood alone with no vessels, whilst Brazil operated a fleet of 172 merchant vessels, India 534, China 2044 and Russia 1891.

Not self-reliant

“We are almost 100 percent dependent on foreign shipping to get our goods to market, despite South Africa being a maritime country with over 3,000km of coastline and a vast seaward economic exclusion zone”, he said.

Mokhele told parliamentarians that the country’s sea-borne cargo constituted at that time a “significant” 3.5 % of global sea trade. “Yet all the benefits of shipping cost overheads to export destinations in the case of South Africa accrue to the nation from which the ship transport emanates”, he said.  He claimed that all South Africa’s maritime fleet had been “sold off by the apartheid government”.

Infrastructure is there

oil_tankerDuring this year’s budget vote speech, minister Peters said the facts were extraordinary and she confirmed that SA had a massive coastline positioned on sea trading routes with thee world’s largest bulk coal terminal port in Richards Bay; the busiest port in African Africa with the largest container facility in the Southern Africa; the deepest container terminal in Africa; Cape Town had the biggest refrigerated container facility in Africa and Saldhana Bay was the largest port in Africa by water footprint.

She added that South Africa is among the top fifteen countries that trade by sea with 96% of the country’s imports and exports moving by sea transportation yet the country had no merchant fleet of any kind.

Elements to Operation Phakisa

Minister Peters said that Operation Phakisa focused on three areas, namely, offshore oil and gas exploration; aquaculture; and marine protection services and oceans governance, the last named being run by the aforementioned SAMSA whose new maritime safety programme has a specific focus on ship safety inspection programmes which have resulted in “nil” reported ship losses in SA waters.

Working with treasury, minister Peters said that DoT had been able to increase the mortgage ranking for financial institutions supporting the maritime sector – particularly, those that finance actual vessel purchases. Also the Transnet Port Regulator in Durban had brought greater certainty to port regulations with a new framework on which the 2015/16 tariff would be based.

Plans starting

oil rigIt was now proposed to establish a National Ship Register for registration of vessels worldwide; work with the private sector to develop initiatives and support the local ship building, ship repairs and maritime skills development.

On matters of policy and legislative framework and Operation Phakisa generally, minister Peters said that DoT would finalise a national maritime transport policy; a policy towards the cabotage (the illegal hire of transport for passengers or goods between two destinations in the same country) and coastal and international waters law.

Small  beginnings

The budget of R392m had been set aside for all maritime related programmes and projects, the minister said which was approved.

In the meantime, the minister has tabled the Merchant Shipping Amendment Bill which carries out very necessary amendments to the Merchant Shipping Act of 1951 to bring it line with South Africa’s Constitution.

The Amendment Bill also gives effect to the Maritime Labour Convention and the Work in FishingCoega harbour equip Convention both Conventions being adopted by UN’s ILO. International Labour Organisation.”  This aligns domestic legislation to global instruments ensuring global protection to the rights of seafarers and decent working and living conditions thus enabling South Africa to intervene in cases where foreign ships enter SA ports have contravened the rights of seafarers.”

The adoption of this legislation, its promoters say, will improve the operations and image of SA’s emerging maritime industry and is also an imperative in international trade.
Other articles in this category or as background
http://parlyreportsa.co.za/energy/merchant-shipping-bills-on-oil-pollution-levies-approved/
http://parlyreportsa.co.za/energy/green-paper-nautical-limits/
http://parlyreportsa.co.za/uncategorized/search-and-rescue-bill-to-set-up-search-centres/
 

 

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Fuel price controlled by seasonal US supply

US refinery shut downs affect fuel price…..

US refineryThe current spike in the price of petrol is due of a number of international issues  compounding together but the primary cause is that at this time of year in the United States, a number of major US refineries close down for maintenance in order to prepare for the US summer surge in fuel sales.

This was said by Dr Wolsey Barnard, acting DG of the department of energy (DoE), when he introduced a briefing to the portfolio committee on energy on its strategy for the coming year.

In actual fact, the meeting had been called to debate the promised “5-point energy plan” from the cabinet’s “war room” which did not eventualise, the minister of energy also being absent for the presentation as scheduled. It appeared that the DoE presentation had been hastily put together.

“Price swingers” make perfect storm

Dr Wolsey BarnardDr Barnard said that it could be expected that the price of fuel would be extremely volatile in the coming months due in main “geo-political events” affecting the price of oil, local pricing issues of fuel products and possibly even sea lane interruptions. Price would always be based on import parity and current events in Mexico, Venezuela and the Middle East would always be “price swingers”, he said.

On electricity matters, his speciality, he avoided any reference to past lack of investment in infrastructure, but said that he called for caution in the media, by government officials and the committee on the use of the two expressions “blackouts” and “load shedding”.

Same old story

“Over the next two years”, he said, “until sufficient infrastructure was in place, there would have to be planned maintenance in South Africa” and referred to the situation in the US as far as maintenance of refinery plant was concerned. He said that also “unexpected isolated problems” could also arise with ageing generation installations, during which planned “load shedding” would have to take place.

He said he could not imagine there being a “blackout”.

Opposition members complained that the whole electricity crisis could be solved if some companies would cease importing raw minerals, using South African electricity at discounted prices well below the general consuming manufacturing industry paid, and re-exporting smelted aluminium back to the same customer. They accused DoE of trying to “normalise what was a totally abnormal position for a country to be in.”

Billiton back in contention

One MP said, “Industry was in some cases just using cheap South African electricity to make a profit”. Suchaluminium smelter practices went against South Africa’s own beneficiation programme, he said, in the light of the raw material being imported and the finished product re-exported. “It would be cheaper to shut down company and pay the fines”, the DA opposition member added, naming BH Billiton as the offender in his view.

Dr Barnard said DoE could not discuss Eskom’s special pricing agreements which were outside DoE’s control  and “which were a thing of the past and a matter which we seem to be stuck with for the moment.”

High solar installation costs

Dr Barnard also said that DoE had established that the department had to be “cautious on the implementation of solar energy plan” as a substitute energy resource in poorer, rural areas and even some of the lower income municipal areas.  DoE, he said, “had to find a different funding model”, since the cost of installation and maintenance were beyond the purse of most low income groups.

In general, he promised more financial oversight on DoE state owned enterprises and better communications.   There were plenty of good news stories, he said, but South Africa was hypnotising itself into a position of “bad news” on so many issues, including energy matters. He refused to discuss any matters regarding PetroSA, saying this was not the correct forum nor was it on the agenda.

Still out there checking

On petroleum and products regulation, the DG of that department, Tseliso Maquebela, said that non-compliance in the sale of products still remained a major issue. “We have detected a few cases of fraudulent fuel mixes”, he said, “but we plan to double up on inspectors in the coming months, especially in the rural areas, putting pressure on those who exploit the consumer.” The objective, he said was reach a target of a 90% crackdown on such cases with enforcement notices.

Maquebela added that on BEE factors, 40% of licence applications with that had 50% BEE compliance was now the target.

Competition would be good

On local fuel pricing regulations, Maquebela said “he would dearly like to move towards a more open and competitive pricing policy introducing more competition and less regulations.”

fuel tanker engenOn complaints that the new fuel pipeline between Gauteng and Durban was still not in full production after much waiting, Maquebela said the pipeline was operating well but it was taking longer than expected to bring about the complicated issue of pumping through so many different types of fuel down through the same pipeline. “But we are experts at it and it will happen”, he said.

Fracking hits the paper work

On gas, particularly fracking, DoE said that the regulations “were going to take some time in view of all the stakeholder issues”.

On clean energy and “renewables” from IPP sources, DoE stated that the “REIPP” was still “on track” but an announcement was awaited from the minister who presumably was consulting with other cabinet portfolios regarding implementation of the fourth round of applications from independent producers.

Opposition totally unimpressed

In conclusion, DA member and shadow minister of energy, Gordon McKay, said that the DoEgordon mackay DA presentation was the most “underwhelming” he had ever listened to on energy.   Even the ANC chair, Fikile Majola, sided with the opposition and said that DoE  “can do better than this.”

He asked how Parliament could possibly exercise oversight with this paucity of information.   DoE representatives looked uncomfortable during most of the presentations and under questioning it was quite clear that communications between cabinet and the DoE were poor.

When asked by members who the new director general of the department of energy would be and why was the minister taking so long to make any announcement on this, Dr Wolsey Barnard, as acting DG, evaded the question by answering that “all would be answered in good time”.

Other articles in this category or as background
Energy gets war room status – ParlyReportSA
Medupi is key to short term energy crisis – ParlyReportSA
Integrated energy plan (IEP) around the corner – ParlyReportSAenergy legislation is lined up for two years – ParlyReportSA

Posted in Electricity, Energy, Enviro,Water, Facebook and Twitter, Fuel,oil,renewables, LinkedIn, Mining, beneficiation, Public utilities, Special Recent Posts, Trade & Industry, Transport0 Comments

Grand Inga hydro power possible

DRC clean energy destined for SA….

drc flagOpposition members of the parliamentary energy committee expressed a certain level of cynicism regarding the Grand Inga project treaty signed recently between South Africa and the Democratic Republic of Congo (DRC), the subject of which is a multi-phased hydro power station to be built on the Congo River.

They noted that the DRC is ranked second only to Somalia as the worst country on a worldwide index of failed states    However, despite this reservation, MPs in general noted that on the whole the project had “exciting possibilities”, albeit long term ones.

These points were made during a presentation by the department of energy (DoE) on the Inga treaty recently signed by President Zuma.   Inga 1 and Inga 2 dams are already in operation, supplying low output power. The issue of a hydro power link with the DRC has been “on the table” for some fifteen years.

Congo River cusec power

The new third Inga dam, which will be by far the largest and hence the title “grand” for the whole project. The project will be approximately 250 kms from the capital Kinshasa and 50kms from Africa’s West coast, the Congo River having the second largest and strongest flow after the Amazon, mainly as a result of the dams being sited after one of the largest waterfalls in the world. However, the Congo has by no means the longest and largest drainage area.

DoE said in response to the statement that the DRC was a failed state that whilst it recognised that the DRC had been unstable for years, especially in the North Eastern Region, most of the trouble was more than 200km from the Inga site and even when the civil war at its height, there had never been any interruption of power services.

The Grand Inga project, said DOE in quoting the developers, would be able to supply some 40,000MW in clean energy when all seven phases were completed for development in Central, East and Southern Africa.

SA power line to local grid

It is foreseen that new transmission line to South Africa necessary will be associated with the first phase of the project and which would probably traverse Zambia, Zimbabwe and Botswana.   It is estimated that the first phase will cost some R140bn at current prices.

The meeting in question was attended by the deputy minister of energy, Thembisile Majola, and DoE represented by Ompi Aphane, DDG: policy, planning and clean energy, DoE, who indicated that the treaty provided for the establishment of an Inga Development Authority (ADEPI). There would also be a joint ministerial committee drawn from the two signatory countries and a joint and permanent technical committee to facilitate the project.

Earlier failures

The deputy minister said that the new treaty had at last put behind the failed Westcor project, involving Billiton and essentially a SADC body involving SA, Angola, Botswana, the Congo and Namibia with the DRC as lead.

In 2010, the DRC announced it was pulling out of the arrangement and would develop the Inga dam complex on its own, which move collapsed the Westcor consortium. However, despite much wasted time and effort, Aphane said a good deal of the feasibility work had been completed.

Minister Majola said that what had been learnt from Westcor was that any future proposition had to be on a win/win basis for each participant in order to avoid such a collapse.    It was now recognised that the DRC had to meet its own requirements first as a basis for any project to succeed as a consortium, the minister added.

Getting in first

An MOU with the DRC was subsequently signed on this basis in 2011 and the current treaty provides not only a potential to generate the stated 40 000 MW after its seven phases but to provide relatively cheap, clean energy at any point, of which RSA has secured rights to import 12 000MW.

Ompi Aphane explained that in return DRC have agreed to grant SA the right of first refusal (ROFR) for both equity and off-take in respect of any and all future phases of the project or any related hydro-electric development of the Congo River in and around the Inga complex.

Once RSA is “locked in” to phase one and proceeds with implementation, it is committed to take 2500 MW as an off take.

SA gets lowest terms

US$ 10m is payable by SA in terms of the treaty into an escrow account as commitment fee in terms of the ROFR.    Aphane said that SA will be charged the lowest possible tariff and no other off-taker will be able to receive better terms than SA.

He continued, “DRC are to ensure that for each phase of the project, the developer company will reserve at least 15 per cent of the available equity to SA and South African entities, public or private, and SA shall be the first to be offered such share capital.”

Aphane said the “designated delivery point” will be at Kolwezi, about 150 km from the DRC/Zambia border and SA will be responsible for the 150 km line needed.   The DRC will either provide a concession to enable SA to construct and operate that portion of the line to the Zambian border, or commit to develop it themselves.   One of the DRC’s most obvious priorities was the supply of power to Kinshasa and Zambia’s “copperbelt”.

Parliament to approve

DoE concluded their presentation by telling MPs that the treaty would be introduced to Parliament for ratification in due course and negotiations on the outstanding protocols on tariff setting also needed to be finalised.    On a critical path plan were also negotiations with transit countries and a final feasibility study on the direction that the transmission line would take.

Ompi Aphane, in responding to a number of MPs questions, said that on environmental issues, which were in article 14 of the treaty, carbon credit matters has been taken into consideration and more would be heard on this.

SA not involved in dam

On the critical issue of finance, Ompi Aphane said that MPs should realize that other than the possibility of transmission lines, SA was not involved in dam construction and the country would be paying for power on connection, plus in all probability building a transmission line to connect to the SA grid.   Consequently there were no major debt issues arising at present.

Ntsiki Mashimbye, SA’s ambassador to the DRC, was present at the meeting and commented that the Grand Inga project “was not a project in isolation, not even just about electricity, but about industrializing Africa as a whole.”

The minister concluded by commenting that the integration of the African continent was the target as well as providing clean energy sustainability for South Africa and all the benefits that would ensue, including resale to other nations.
Other articles in this category or as background
http://parlyreportsa.co.za/uncategorized/grand-inga-hydroelectric-power-getting-under-way-at-last/
http://parlyreportsa.co.za/energy/integrated-energy-plan-iep-around-corner/
http://parlyreportsa.co.za/energy/doe-talks-biofuels-and-biomass/

Posted in Electricity, Energy, Enviro,Water, Facebook and Twitter, Finance, economic, Fuel,oil,renewables, Land,Agriculture, LinkedIn, Trade & Industry0 Comments

CEF hurt by Mossel Bay losses

CEF R3.4bn write down was “irregular” …..

PetroSA logoLosses incurred at the Central Energy Fund (CEF) gas to liquid facility at Mossel Bay operated by PetroSA have resulted in a revaluation of assets based on the expected life of the refinery but the impairment that resulted, to the tune of R3.4bn, was found to be “irregular” by the office of the auditor general (AG) when reviewing the CEF 2013/4 results.

CEO of CEF, Siswe Mncwango, appeared before the portfolio committee on energy together with the chief executives of subsidiaries PetroSA, iGas, the Strategic Fuel Fund (SFF), African Exploration and Mining (AE) and the licensing and regulatory petroleum body, PASA, to brief the committee on their annual report and to justify their financial performance in terms of the AG findings for the group.

PetroSA struggling

The key issue central to the impairment of R3.4bn, Mncwango said, was the necessity for subsidiary PetroSA, in terms of its mandate, to maintain its levels of gas feedstock at a sufficient level to meet strategic stock policy in the national interest.  It was necessary, he said, to undertake this accounting process in view of delays experienced in exploiting undersea gas fields.

He said, the plant started operating at Mossel Bay in 1992, the life of plant being estimated at 15 years, and then known as Mossgas. With the project not having the necessary funding for exploration at sea during its early years, the plant consequently became threatened far too early in its planned operating life.

Limited choices

CEF faced two financially driven options, Mncwango explained to parliamentarians.  There was a choice between running the plant at 50% capacity or to close it down, he said.  As the strategic need for gas feedstock was an imperative facing both CEF and PetroSA, it was decided to further explore the existing and nearby gas field area.

Project Ikhwezi was thus born but at this stage expensive drilling to greater depths and lateral drives have been encountered and with newly pioneered methods, this has resulted in major additional costs. However, PetroSA, in a briefing from their engineering head on the subject drilling expectations, indicated that they are confident that plentiful gas supplies are on the cards.

Long time drilling

The project involves tapping into gas reserves in Petro SA’s F-O field which is located 40km south-east of the production platform off the south coast of South Africa.  The first well drilled was finalised in 2013 and the final link between all wells is to be completed during 2014/2015, parliamentarians were told.

The delays that have been experienced have also negatively affected the finances of PetroSA, CEF said, and this had necessitated permission for a temporary impairment from national treasury. However, this was not certificated correctly according to the AG’s report and consequently the R3.4bn impairment became “irregular”.

Difficult waters

According to Andrew Dippenaar, PetroSA’s upstream acting vice-president, Project Ikhwezi may, and probably will, be producing in some eighteen months. The riskiness and speed necessary in trying to find gas in difficult waters has added to the problems, he said, on top of which the gas field is geologically problematic.

This has led to operating losses at refinery level with a result that some sort of accounting write off was necessary in the short term, despite this hurting PetroSA’s current cash reserves of R5.5bn. This amount will not be recoverable, CEF’s financial officer said but he was adamant that this was not a cash loss affecting the taxpayer, more a book entry. CEO Mncwango added that inherited delays in finding gas at sea in the immediate area close to the landing facilities had resulted in the current situation. These were many risks in oil and gas exploration, he said.

Chief financial officer of PetroSA, Lindiwe Bakoro, was insistent that as a result of long delays in exploration any hope of immediate profits might be delayed but long term viability had been planned for and this was expected.  Consequently, new valuations on assets were undertaken to re-gear the project with treasury permission.  However, Bakoro confirmed that PetroSA would await the final results of drilling and connection before any final write down-decision on the impairment took place.

Purchasing procedures

On other irregular expenditure items, totalling some R30m, that appeared in the CEF results noted by the AG, these again were for PetroSA.   Such were mainly as a result of the correct procedures not having been followed in terms of procurement procedure. 

The correct procedures were now followed throughout the CEF group, Mncwango said, and the AG had been satisfied on this subject, since the annual report had not been qualified. A specific “irregular” figure of R1.6bn was also reported for PetroSA in respect of its Ghana operations.

Again it was explained that this was a procedural and the necessary documentation on transfer of monies had been incorrectly processed.   It would appear that treasury permission had been applied for and granted in 2013 but the actual transfer of R1.6bn had taken place in 2014, a different financial year for the record. CEF reported that PetroSA, nevertheless, had shown a particularly good return for the first time on its Ghanaian liquid fuels investment, returning a profit for 2013/4 of some R560m

On or off. Who knows?

Asked if any discussions with Engen on downstream development in the name of PetroSA had progressed, CEF’s Mncwango said that any such discussions were confidential and he would not be drawn into further explanations since these were commercially sensitive, whether with Engen or any other body in the liquid fuels sector.

Ms. Nosizwe Nokwe-Macamo, CEO of PetroSA, concluded that steps were taken to effectively manage fruitless, wasteful and irregular expenditure and that the focus for the national fuels group in the period ahead included delivery on Project Ikhwezi and finalising funding arrangements for “downstream entry”.

Gas plan on the way

The meeting was attended by the deputy minister of energy, who said she was confident that steps taken by both CEF and PetroSA were in the interests of the national strategy on gas supplies and that cabinet were shortly to debate the gas utilization master plan (GUMP). This was in response to opposition members who had complained to the minister that South Africa’s liquid fuels and energy plans could not be finalised until the state’s future gas supply scenario was properly clarified.

Other articles in this category or as background

http://parlyreportsa.co.za/energy/petrosa-has-high-hopes-with-the-chinese/ http://parlyreportsa.co.za/energy/cef-still-has-its-troubles/ http://parlyreportsa.co.za/uncategorized/central-energy-fund-slowly-gets-its-house-in-order/

Posted in Energy, Enviro,Water, Facebook and Twitter, Finance, economic, Fuel,oil,renewables, LinkedIn, Special Recent Posts, Trade & Industry0 Comments

Eskom crosses its fingers

Medupi:  Eskom on final run ….

eskomCollin Matjila, interim CEO of Eskom, told a joint parliamentary portfolio committee on energy and public enterprises that Eskom had learned a number of lessons in the building of coal-based power stations, probably the most important being the need for a suitably qualified and capacitated contractor oversight team to handle the complexity and extent of any project such as the construction of Medupi.

Although power from the new plant was to be introduced to the grid this Christmas Eve from Medupi, and incrementally more onwards, full power would only be happening at stable levels by winter 2015.

With both the boiler contractor and control and instrumentation contractor problems causing delays and a strike affecting between 40% -70% of the workforce, the 6-month delay had been recognised by both treasury and cabinet in financial re-calculations.

Minister notes….

Also addressing the committee, public enterprises minister, Lynne Brown, stressed that in her view “the corner had been turned at Medupi”.  She said that cabinet had approved a package to “support a strong and sustainable Eskom to ensure energy security”.   The inter-ministerial committee, which was comprised of finance, public enterprises and cooperative governance and traditional affairs, had now reviewed all options before them both on electricity and energy generally.

Eskom then stated that the second unit, Kusile would be added to the grid in a start-up process in the first half of 2015 and Ingula, the third and smaller hydro unit, in the second half of 2015.

No rest with summer

Matjila cautioned MPs that additional capacity would be needed during summer this year, despite any reduced seasonal demand.   This was because of the need to accommodate “planned” outages, which were set to take up 10% of full capacity being supplied.

By referring to full capacity, this was a theoretical maximum availability, Matjila said, subject to the reality of unplanned outages.  Eskom warned of a possible inability to meet demand throughout the remainder of the financial year, as distinct from seasonal timing, if it should be financially restrained in its use of it expensive-to-run standby open-cycle gas-turbines.

More price increases

Recovery of unbudgeted costs in this area for the year under review were part of the problem facing Eskom, Matjila said, and the recent announcement by the national electricity regulator, Nersa, of a rise of just short of 13% in electricity prices in April 2015 was no doubt motivated by this factor amongst others.

However, he said, Eskom may also have to deal with a higher maintenance in December, including half station shutdowns for three stations. He qualified this in a later Engineering News report which stated that 32 of Eskom’s 87 coal-fired generating units required “major surgery”, whilst four were in a “critical condition”.   November was also critical, he said, if all did not go as planned.

Despite continued questioning by parliamentarians on the state of progress at the second “New Build” power station, Kusile, no specific answers were provided by either Eskom or the minister other than the fact that Kusile had experienced “protected” and “unprotected” strikes in contractor workforces during the year.

Strikes

Matjila stressed that the workforce was back on site at both locations. “Additional resources had been mobilised to mitigate delays, he said, and additional shifts have been introduced 24 hours a day, 7 days a week, to accelerate progress on site.  Eskom was liaising with contractors to deal with any issues which had the potential of causing further delays, he said.

In his overall concluding remarks, Matjila said a five-point recovery plan had been introduced to improve the performance of the Eskom coal-fired fleet, with the utility having reaffirmed its objective of “returning to an 80-10-10 operating model, which implied 80% plant availability, 10% planned outages and 10% unplanned events across a period of a year.”

Outside inputs

On the situation with regard to the independent power producers (IPP) programme, Matjila said he was aware that the department of energy (DoE) had processed  over one thousand applications during the three IPP 3-stage bidding process and this had stretched DoE resources considerably.

He said it had been a complicated process to secure sustainable competitive prices in respect of the particular technologies involved. What had to be also factored in was the burden of hidden costs of storage and back-up which had to be borne by Eskom, not the IPPs.

Also the proximity and availability of energy supplies on the supply in providing the “appropriate infrastructure” was being dealt with and overcome.

It was important, Matjila said in conclusion, for Eskom to ensure that potential and online suppliers met grid code requirements and he was aware that some IPPs were struggling with this process.
Other articles in this category or as background
http://parlyreportsa.co.za/energy/medupi-key-short-term-energy-crisis/
http://parlyreportsa.co.za/cabinetpresidential/eskom-says-medupi-and-kusile-will-have-great-local-benefits/
http://parlyreportsa.co.za/energy/eskom-warns-on-costs-of-new-air-quality-rules/
http://parlyreportsa.co.za/energy/dpe-reports-on-eskom-and-it-utilities-to-parliament/

Posted in Electricity, Energy, Enviro,Water, Facebook and Twitter, Finance, economic, Fuel,oil,renewables, Land,Agriculture, LinkedIn, Public utilities, Trade & Industry0 Comments

Karoo Fracking

Fracking, shale gas gets nearer

Mineral resources gives update on fracking, shale gas

In what appeared to be justification for cabinet’s support of the furtherance of shale gas exploration, director general of the department of mineral resources (DMR), Thibedi Ramontja, told Parliament recently that the discovery of gas deposits in the Karoo “was an exciting opportunity to create jobs and that this was going to make a difference to people’s lives in terms of the NDP”.

He was briefing the select committee on land and mineral resources on the department’s budget vote, his audience representing a different cluster and a more inclusive one than when DMR briefed the National Assembly’s portfolio committee the week before.

Whilst a gazette had been published in February 2014 imposing certain restrictions on the granting of new applications for shale gas “reconnaissance”, DMR said that current approvals did not yet authorise hydraulic fracturing itself.     If this was allowed, “certain amendments” would be made to the appropriate Act.

EIA to come

An environmental impact assessment would be completed in conjunction with the department of water affairs “within the second quarter of 2014/5” to determine “responsible practices” for hydraulic fracturing and to “provide a platform of engagement with stakeholders”.   DMR said that this process would be “streamlined”.

It was noted by DMR in their presentation to parliamentarians that both shale gas exploration and production, together with coal bed methane, will be authorised under environmental impact regulations.

Warning on BEE

The briefing on the DMR strategic plan for five years and this year’s budget vote for the department was preceded by a statement by the deputy minister of mineral resources. Again the warning was conveyed to the mining and petroleum industry that it was generally in default of the mining charter.

With the tenth anniversary of the charter now present, DG Ramontja said, findings by DMR indicated that whilst some targets had been partially achieved in terms of BEE and the charter, others were very much lagging. “Action will be taken”, she said.

Other articles in this category or as background
http://parlyreportsa.co.za//energy/shale-gas-exploration-gets-underway/
http://parlyreportsa.co.za//energy/move-by-minister-to-qualify-shale-gas-exploration
http://parlyreportsa.co.za//energy/fracking-regulations-enhance-safety/

Posted in BEE, Electricity, Energy, Enviro,Water, Facebook and Twitter, Fuel,oil,renewables, LinkedIn, Public utilities, Trade & Industry0 Comments

SA to get coastal management underway

Coastal management includes cities and rural areas …

South Africa’s National Coastal Management Programme (NCMP) is now underway with the publication of working proposals by the department of environmental affairs (DEA) which was accompanied by a call for public comment.

The estimated contribution of coastal resources to the South African economy is in the order of some R5bn and coastal zones, the document says, are estimated to provide approximately 35% of the country’s GDP.   The major coastal cities of Cape Town, Port Elizabeth, East London, Durban, and Richards Bay are affected, all four having experienced the fastest economic growth of all cities in the country.

Preservation and good management of the national coastal areas, says DEAT, is therefore essential if South Africa is to continue to provide the roots for economic development, expansion of the tourism industry and the continued provision of recreational needs.   All these factors are created in areas with a very delicate balance of biodiversity, says DEAT.

Economic reasons

Maintaining this balance into future generations is seen by DEAT as one of its major challenges, not only for environmental reasons but for economic reasons as well. A further important objective of the NCMP is to maintain the coastal environment to the benefit of threatened poorer communities and to protect their livelihoods.
DEAT says in its forward to the NCMP that South Africa has chosen to embrace a holistic approach, known as integrated coastal management (ICM), which sets out objectives, management procedures and contains the kind of definitions, norms and standards that enable a basic environmental regulatory process to happen.

The purpose of the anchor ICM Act is to maximize on the eco-benefits provided by coastal zones and to minimize the conflicts and harmful effects of human activities upon each other, both in terms of resources that could be lost and any surrounding environmental damage.

Pointers only

The NCMP, DEAT says, is a working document to assist in implementing ICM objectives and lays out in its 106 pages a deliberate programme of national management actions. It is not regulatory but a working guide.

First, it contains a detailed situation analysis related to coastal management in South Africa across the full spectrum of zones within the country’s 3,000 kms of coastline. Then the document looks at the current threats to ecosystems followed by a study of existing localised and national environmental management programmes.

In providing a “national vision”, the NCMP provides a structured approach to engage with the stakeholders, DEAT says, and “a template for future cooperative governance”.   It also suggests ways to integrate ICM programmes with localised government, the NCMP therefore expanding with practical programmes based on the ICM Act.

However, DEAT makes it clear in a disclaimer that what is published is neither an amending Bill nor a legal or regulatory process but a guide to programmes which are seen by DEAT as the route to take and which can be necessary in the common interest.

Complimentary to NEMA

To emphasise the co-operative nature of what is put forward, DEAT says in the frontispiece to the NCMP, “This document does not in any way have legal authority or take precedence over the National Environmental Management: Integrated Coastal Management Act but rather serves as a guideline to the development of coastal management programmes, expanding on the provisions of the Act”.

Public input on this plan is therefore called for by DEAT. Comment can be made until the end of June.

Concurrently, DEAT has also published its White Paper on National Management of the Ocean, the acronym for which is appropriately NEMO.

This, DEAT says, aims to promote the protection and conservation of South Africa’s ocean environment, as well as promoting sustainable development for present and future generations. It refers in its pages to the extent of South Africa’s ocean environment and deals with issues concerning protection and conservation of the ocean environment and resources of the sea.

The White Paper says the department’s approach to the subject will promote and expand sustainable development and optimise investment in managing the large ocean space which is accessible to the country.
Other articles in this category or as background
http://parlyreportsa.co.za//energy/fueloilrenewables/coastal-management-bill-stirs-waters/
http://parlyreportsa.co.za//health/coastal-environment-proposals-getting-clearer/

Posted in Enviro,Water, Facebook and Twitter, Health, Land,Agriculture, LinkedIn, Special Recent Posts, Trade & Industry0 Comments

Carbon offsets paper still open

emissionsCarbon tax offset plans down on paper….

A paper outlining proposals for a carbon offset programme for local businesses was released for comment a month ago, part of national treasury’s response to the challenge of reducing carbon emissions in South Africa.   Planned and instituted carbon emission reduction programmes will reduce carbon tax, the paper says.

Written comment on the paper is invited until 30 June 2014, which can be e-mailed to www.treasury.gov.za.    A little confusing at first is why what has been published should be dated 2010 but this is because the idea was first mooted in the 2010 Budget Review.

Black gold, maybe

The news of a carbon tax originally was not good for Eskom, their officials said in a submission to Parliament some time ago, Eskom being almost totally reliant on coal and to a small extent on nuclear input to the grid. What is known is that SA coal has the reputation of being particularly “dirty” insofar as carbon output is concerned making SA, relatively speaking, one of the largest emitters of greenhouse gases.

The tax itself is a form of penalty despite the knowledge of the country’s reliance on coal, the government seemingly wanting to stay in the lead as far as the question of a carbon economy is concerned.

Carbon offsets are described in the paper now published as “a measurable avoidance, reduction, or sequestration of carbon dioxide (CO2) or other GHG emissions.”

Carbon reduction

Accordingly, the “softer” aspects of such a tax are designed for those who have other avenues for reduction of carbon to be used for offsetting against the tax or who have mitigation plans in process or proven as planned.    They amount to 5% to 10% for electricity, pulp and paper and 5% fixed for other key industries with varying thresholds according to investment in reduction.

According to national treasury, the paper “outlines proposals for a carbon offset scheme that will enable businesses to lower their carbon tax liability and make investments that will reduce greenhouse gas (GHG) emissions”, the plan as proposed for comment being designed to be introduced from 2016.

In the draft Bill, certain eligibility criteria for carbon offset projects are laid down.   The proposal is that successful projects will be awarded a “tradable emissions reduction credit”.    Projects could be the subject of energy saving and efficiency; transport re-organisation; agricultural emphasis on biomass; and waste applications, for example.

Commitments

In 2009, South Africa, at the UN conference on climate change, committed government to reducing carbon emissions from projected “business-as-usual scenarios” by 34 % in 2020 and 42% in 2025.  South Africa released a carbon tax policy paper last year.

The National Development Plan also calls on the nation to transform the local economy into an “environmentally sustainable low-carbon economy”.

Other articles in this category or as background
http://parlyreportsa.co.za//cabinetpresidential/carbon-tax-comes-under-attack-from-eskom-sasol-eiug/
http://parlyreportsa.co.za//cabinetpresidential/treasury-sticks-to-its-guns-on-carbon-tax/

Posted in Electricity, Energy, Enviro,Water, Facebook and Twitter, Fuel,oil,renewables, LinkedIn, Mining, beneficiation, Public utilities, Special Recent Posts, Trade & Industry0 Comments

Infrastructure Development Bill modified and passed

Minister responds on land issue….

ebrahim patelThe Infrastructure Development Bill recently tabled by Ebrahim Patel, minister of economic development, appears to have avoided major confrontation as a result of re-wording of the provisions it contained regarding expropriation of land for major projects, the Bill having originally granted the state the right to expropriate land where a development project, declared as a Special Infrastructure Project (SIP), was concerned.

The Bill was passed by the National assembly and recently went to the NCOP for concurrence. Recent reports indicate it was passed.

Most submissions criticising the Bill said that the new proposals completely overstepped the mark on the question of expropriation but minister Patel has now assured all parties that such expropriation, if it took place because of a SIP, would be in terms of existing legislation when it came to the acquisition of land needed.

PICC oversight will cost project

In terms of the Bill, each SIP is to have a steering committee which will put in place time frames; attempt to deal with regulatory delay challenges; address project management and ensure the coordinated issuing of permits and licences but the PICC budget for the particular SIP would have to be funded out of the departmental budgets or those of the state-owned companies responsible for managing a project.

The Bill also gives the stamp of approval to PICC, the body which has adopted the National Infrastructure Plan of 2012 that intends to “transform the SA economic landscape while simultaneously creating significant numbers of new jobs, and to strengthen the delivery of basic services by planning and developing enabling infrastructure that fosters economic growth.”

Expropriation to be as presently defined

But the Bill as introduced into Parliament overstepped the mark on the question of expropriation when it came to ensuring that a SIP became a national priority and the minister has indicated that a new cause has been drafted to make it clear that any expropriation required in terms of the strategic integrated projects will be carried out in accordance with the provisions of current legislation.

Minister Patel told parliamentarians that all thirty written submissions had been received and noted and the Infrastructure Development Bill had, as a result of these public hearings, strengthened the constitutionality of the work of PICC, reduced ambiguity on the subject of SIPs whilst ensuring that public consultation had led to transparency.

He said the Bill was important as it involved some R1-trillion on infrastructure since 2009 and the Bill in giving legal standing to the work of PICC was a “milestone in South Africa’s economic development”.

Environmental impact overlooked by Bill

Another complaint was that despite the fact that, if passed, the Bill would co-ordinate some of the biggest infrastructure projects in South Africa’s history, the provisions  make no reference to the need for infrastructure development to be environmentally sustainable other than a clause acknowledging that the SIPs will still need environmental authorisation under the National Environmental Management Act (NEMA).

South Africa has a comprehensive environmental impact assessment (EIA) regime and the department of water and environmental affairs, over the past five years, had spent time and parliamentary effort to improve, streamline and speed up EIA processes, the minimum period for such clearances going no faster than 300 days for clearance on EIAs as far as NEMA is concerned, under any circumstances, in the national interest.

The idea of PICC being allowed to reduce this environmental clearance to 250 days, or even shorter time frames for mega-projects, has the environmental world in a stir it seems, the shortening process, they say being impossible to manage to and which renders EIAs meaningless.

Environmentalists say that decisions about big projects that will affect the whole nation for generations to come must be made using comprehensive information about social and environmental impacts in compliance with NEMA and this takes time, the minimum possible being 300 days as envisaged by NEMA.

It seems that minster Patel has solved the land expropriation issue but has not satisfied the environmentalists who still complain that in its present form the Infrastructure Development Bill will not achieve its aim as far as fully integrated development in the national interest is concerned.

The Bill is headed for promulgation sometime in the mid year, and was passed before the end of the present session in an extended session of the NCOP.
Earlier articles on this subject:
http://parlyreportsa.co.za//cabinetpresidential/infrastructure-development-bill-legislates-growth-path/
http://parlyreportsa.co.za//cabinetpresidential/gigaba-answers-critics-infrastructure-build/
http://parlyreportsa.co.za//cabinetpresidential/gigaba-answers-critics-infrastructure-build/

Posted in Cabinet,Presidential, Earlier Stories, Enviro,Water, Facebook and Twitter, LinkedIn, Trade & Industry0 Comments

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