Tag Archive | energy

Marine Spatial Bill targets ocean resources…

Bill to bring order to marine economy…

In the light of President Zuma’s emphasis in his recent speeches on oil and gas issues, it is important to couple this in terms of government policy with the tabling of the section 76 Marine Spatial Planning Bill (MSP Bill).  The proposals are targeted at business and industry  to establish “a marine spatial planning system” offshore over South African waters.

The Bill  also says it is aimed at “facilitating good ocean governance, giving effect to South Africa’s international obligations.”

A briefing by the Department of Environmental Affairs (DEA) on their proposals is now awaited in Parliament. The Bill until recently was undergoing controversial hearings in the provinces as is demanded by its section 76 nature.

Water kingdom

The MSP Bill applies to activities within South Africa’s territorial waters known as Exclusive Economic Zones, which are mapped out areas with co-ordinates within South Africa’s continental shelf claim and inclusive of all territorial waters extending the Prince Edward Islands.

The Bill flows, government says, from its Operation Phakisa plan to develop South Africa’s sea resources, notably oil and gas.   The subject has recently been subject to hearings in SA provinces that have coastal activities. This importantly applies to South African and international marine interests operating from ports in Kwa-Zulu Natal and the Eastern and Western Cape but also  involves coastal communities and their activities.

International liaison

Equally as important as maritime governance, is the wish to assist in job creation by letting in work creators.  Accounted for also are international oceanic environmental obligations to preserve nature and life supporting conditions which DEA state can in no way can be ignored if maritime operations and industrial seabed development are to be considered.

South Africa is listed as a UNESCO participant, together with a lengthy list of other oceanic countries, agreements which, whilst not demanding total compliance on who does what, are in place to establish a common approach to be respected by oceanic activity, all to be agreed in the 2016/7 year.  South Africa is running late.

Invasion protection

Whilst the UNESCO discipline covers environmental aspects and commercial exploitation of maritime resources, the MSP Bill now before Parliament states that in acknowledging these international obligations, such must be balanced with the specific needs of communities, many of whom have no voice in an organised sense.

As Operation Phakisa has its sights set on the creation of more jobs from oceanic resources therefore, the MSP Bill becomes a balancing act for the Department of Environmental Affairs (DEA) and the Bill is attracting considerable interest as a result.

The hearings in the Eastern Cape have already exposed the obvious conundrum that exists between protecting small-time fishing interests and community income in the preservation of fishing waters and development of undersea resources.  What has already emerged that the whole question of the creation of future job creation possibilities from seabed-mining, oil and gas exploration and coastal sand mining is not necessarily understood, as has been heard from small communities.

The ever present dwindling supply of fish stocks is not also accepted in many quarters, with fishing quotas accordingly reduced.

Tug of war

All views must be considered nevertheless but from statements made at the political top in Parliament it becomes evident that the potential of developing geological resources far outweigh the needs of a shrinking fishing industry.  At the same time, politicians usually wish to consider votes and at parliamentary committee level, the feedback protestfrom the many localised hearings is being heard quite loudly.

As one traditional fishing person said at the hearings in the Eastern Cape, “The sea is our land but we can only fish in our area to sustain life. The law is stopping us fishing for profit.”

Local calls

The attendees at many hearings have said that the MSP Bill and similar regulations in force restrict families from earning from small local operations such as mining sand; allow only limited fishing licences and call for homes to be far from the sea denying communities the right to benefit from the sea and coastal strips for a living.

Hearings last went to the West Coast and were held with Saldanha Bay communities.

Big opportunities

Conversely, insofar as Operation Phakisa is concerned, President Zuma, as has been stated, said clearly in his latest State of Nation AddressZuma that government has an eye for much more investment into oil and gas exploration.   He has since announced that there are plans afoot to drill at least 30 deep-water oil and gas exploration wells within the next 10 years as part of Operation Phakisa.

Coupled to this is the more recent comment in Parliament that once viable oil and gas reserves are found, the country could possibly extract up to 370 000 barrels of fossil fuels each day within 20 years – the equivalent of 80% of current oil and gas imports.

According to the deadline set by the Operation Phakisa framework, the MSP Bill should have been taken to Parliament at the beginning of December 2016 for promulgation as an Act by the end of June 2017, making it appear that things are running late.

Environmental focus

As the legislation is environmentally driven, with commercial interests coming to the surface in a limited manner at this stage, the matter is being handled by the Portfolio Committee on Environmental Affairs.    It is understood that later joint meetings will be held with the Trade and Industry Committee and with Energy Committee members.

Adding to the picture that is now beginning to emerge, is the fact that Minister of Science and Technology, Naledi Pandor, has signed a MOU with the Offshore Petroleum Association of South Africa.

Minister Pandor said at the time of signing, “The South African coastal and marine environment is one of our most important assets.   Currently South Africa is not really deriving much from the ocean’s economy. This is therefore why we want to build a viable gas industry and unlock the country’s vast marine resources.”

Moves afoot

OPASA is now to make more input with offshore oil and gas exploration facts and figures.   Energy publications are now bandying figures around that developments in this sphere will contribute “about R20bn to South Africa’s GDP over a five-year period.”   If this is the case, the Energy Minister might be compromised once again, as she was with renewables, on the future makeup of the planned energy mix.

Amongst the particularly worrying issues raised by opposition parliamentarians and various groupings in agricultural and fishing areas is that there is a proposal in the MSP Bill on circuit states that the Act will trump all other legislation when matters relate to marine spatial planning. DEA will have to answer this claim.

Opposition

Earthlife Africa have also stated at hearings in Richards Bay that in their opinion “Operation Phakisa has very little to do with poverty alleviation and everything to do with profits for corporates, most likely with the familiar kickbacks for well-connected ‘tenderpreneurs’ and their political allies.”

This is obviously no reasoned argument and just a statement but gives an indication of what is to be faced by DEA in the coming months.

Giants enter

With such diverse views being expressed on the Bill, President Zuma and past Minister  of Energy, Mmamaloko Kubayi cannot have missed the announcement that Italy’s Eni and US oil and gas giant, Anadarko, have signed agreements with the Mozambique government to develop gas fields and build two liquefied natural gas terminals on the coast to serve Southern African countries.

Eni says it is spending $8bn to develop the gas fields in Mozambique territorial waters and Anadarko is developing Mozambique’s first onshore LNG plant consisting of two initial LNG trains with a total capacity of 12-million tonnes per annum.  More than $30bn, it has been stated in a joint release by those companies, is expected to be invested in Mozambique’s natural gas sector in the near future.

Impetus gaining

In general, therefore, the importance of a MSP Bill is far greater than most have realized. The vast number of countries called upon to have their MSP legislation in place also indicates international pressure for the Portfolio Committee on Environmental Affairs to move at speed.

This follows a worldwide shift to exploiting maritime resources, an issue not supported by most enviro NGOs and green movements without serious restrictions.  Most parliamentary comments indicate that the trail for oil and gas revenues needs following up and the need to create jobs in this sector is even greater.

Ground rules

Whilst the oil and gas industry and the proponents of Operation Phakisa also recognize that any form of MSP Bill should be approved to provide gateway rules for their operations and framework planning, the weight would seem to be behind the need for clarity in legislation and urgency in implementation of not only eco-friendly but labour creating legislation.

Operation Phakisa, as presented to Parliament particularly specified that the development of MSP legislation was necessary and Sean Lunn, chairperson of OPASA has said that the Bill will “add tangible value to South Africa’s marine infrastructure, protection services and ocean governance.”  He said it will go a long way in mitigating differences between the environmentalists and developers.

Not so nice

On seabed mining, the position with the MSP Bill is not so clear, it seems.    Saul Roux for the Centre for Environmental Rights (CER) says that the Department of Mineral Resources granted a few years ago three rights to prospect for marine phosphates.

He also stated that the marine process “involves an extremely destructive form of mining where the top three metres of the seabed is dredged up and consequently destroys critical, delicate and insufficiently understood sea life in its wake.”   Phosphates are predominantly used for agricultural fertiliser.

“These three rights”, he said “extend over 150,000 km2 or 10% of South Africa’s exclusive economic zone.”

Something happening

One of CER’s objectives, Roux says, is to have in place a moratorium on bulk marine sediment mining in South Africa.   He complains that despite the three mining rights having been gazetted, he cannot get any response from Minister of Mineral Resources, Mosebenzi Zwane, or any access to any documents on the subject.

He stated there were two South African companies involved in mining sea phosphates and one international group, these being Green Flash Trading 251, Green Flash Trading 257 and Diamond Fields International, a Canadian mining company. All appeared to be interested in seabed exploration for phosphates although not necessarily mining itself.

Roux called for the implementation of an MSP Bill which specifically disallowed this activity as is the case in New Zealand, he said.

Coming your way

The MSP Bill was tabled in April 2017 and once provincial hearings are complete it will come to Parliament. The results of these hearings will be debated and briefings commenced when announced shortly.

Previous articles on category subject

Operation Phakisa to develop merchant shipping – ParlyReportSA

Hide and seek over R14.5bn Ikhwezi loss – ParlyReportSA

Green Paper on nautical limits to make SA oceanic nation – ParlyReportSA

Gas undoubtedly on energy back burner – ParlyReportSA

 

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MPRDA Bill returned to National House of Leaders

Some sort of movement on MPRDA at last……..

sent to clients 18 March…..In a parliamentary document recently published it is shown that the Mineral and Petroleumcoal mining Resources Development Amendment (MPRDA) Bill has been sent on a token trip through the National House of Traditional Leaders for comment in thirty days and then to be returned to the Portfolio Committee on Mineral Resources.

This is probably for some temporary major changes to be made to the Bill after debate until such time as two new Bills, one for the mining industry and one for the oil and gas industry, are drafted in time to come.     No doubt this movement was initiated as the result of the recent meeting between President Zuma and business leaders.

The extraordinary affair of the MPRDA has been going on since the first draft of the Bill was published for comment in December 2012 regulating extensively the exploitation of minerals and resources and the legal movement and transfer of resource rights.    Both industries have their own and very different BEE charters and the single Bill deals with both and many empowerment factors.

Core issues


Two issues
of note were that in the new Bill as originally proposed the Minister was to form a new “entity” which will “promote onshore and offshore exploration for and production of petroleum” and which will also “receive, store, maintain, interpret, add value to, evaluate, disseminate or deal in all geological or geophysical information” relating to petroleum and gas exploration matters.

Secondly, sections 80 and 84 of the anchor Act were to be amended to provide for State participation in any successful minerals and gas/oil development exercises carried out by the private sector, the Bill providing for a State right to free carried interest in all such exploration and production rights.
Specific details regarding the extent of the “free carry” were to be published in a government gazette, a figure of 20%susan shabangu being bandied about at the time.   “We are on the path of changing the mining and petroleum industry in South Africa, whether you like it or not,” said Mineral Resources Minister Susan Shabangu earlier in 2014.

Strong views

Accompanied by a public outcry and strongly worded objections from private industry, foreign companies and other institutions, the Bill reached Parliament virtually unchanged.    Again, brought up before the Portfolio Committee on Mineral Resources in public hearings, were strong objections from Opposition MPs and institutionalised industry, neither of whom minced their words, describing the Bill, in one case, as a “self-destruction tool of South Africa’s investment climate.”

Nevertheless, the ANC Alliance continued on their course and the Bill was hammered through in a rush at the end of the parliamentary term, the ANC summonsing through its whip sufficient numbers.

In the background, as the Bill went through Parliament, was the fact that the Department of Mineral Resources and the Department of Energy were only just completing their split apart. Crossed wires were the order of the day.

Nothing happened

Since that date the Bill has sat in limbo; a new Mineral Resources Minister Ngoako Ramatlhodi Ngoako Ramatlhodiagreeing shortly after with the with mining companies and the Chamber of Mines that the best and fastest way forward to bring certainty to the mining and oil drilling industry would be to pass the Bill subject to amendments based on a new approach to the mining beneficiation issue.

Secondly, the matter of state “free carry” could be dropped.

At the time it was guessed that at least a year and a half would be the delay if two replacement Bills were to be drafted, separating mineral resources from oil and gas in the light of the fact that both have separate and very different BEE charters. The quicker alternative to bring some certainty was that temporary amendments to the existing Bill should be made.

Despite this, the Bill has just stuck right there, in the President’s office, until recently, now moving back togas exploration sea Parliament because, as is suspected, business leaders in their recent discussions with President Zuma must have drawn his attention to the continuing lack of lack of certainty in both industries because of unknown legislative changes about to occur and an apparent inability by Cabinet to give clear policy leads.

So where are we?

So as far as the MPRDA Bill is concerned, there is movement in the goods sidings but whether any train is about to start on a journey can only be known when a meeting is scheduled by the Portfolio Committee on Mineral Resources. Yet another minister is the train driver.

Previous articles on category subject

 

 

 

 

 

 

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Overall energy strategy still not there

Feature article………….

DOE energy strategy in need of lead 

From closing parliamentary meeting….sent clients dec 15….   South Africa’s energy strategy problem is as much about connection as it is about the integration of supply resources, said Dr WolseyDr Wolsey Barnard Barnard, acting DG of the Department of Energy (DOE), when briefing the parliamentary select committee on DOE’s annual performance before Parliament closed in 2015

Of all the problems facing South Africa on the energy front, probably the most critical is the lack of engineering resources facing South Africa at municipal and local level, negatively affecting economic development and consumer supply, he told parliamentarians.

He particularly referred in his address to the fact that the main problem being encountered in the energy supply domain was the quality of proposals submitted by municipalities for supply development in their areas.     In many cases, he said, the entities involved totally lacked the technical skills and capacity to execute and manage projects and there was also, in many cases, a lack of accountability with reports not being signed off correctly and in some cases technical issues not resolved before the project started.

Doing the simple things first

Despite all the queries from Opposition members on major issues such as fuel regulation matters; nuclear development and the tendering processes; the independent power producer situation with clean energy connection problems and issues surrounding strategic fuel stocks; again and again (DOE) emphasised that nothing was possible until South Africa developed its skills in the area of energy (electricity) connections.

electricity townshipsThe quality of delivery in this area was “extremely poor”, Dr Barnard said, inferring that without satisfactory delivery of energy the burning issues of supply became somewhat academic. Localised development at the “small end” of the energy chain had to be developed, he said. This lack of skills was exacerbated by the “slow delivery of projects by municipalities and by Eskom in particular”, he said.

Eskom  in areas not covered by local government.

Dr Barnard said that there was a lack of accountability on reports provided; poor expenditure by most municipalities evident from the amount of times roll overs were called for and high vacancy rates in municipalities. Consequently, he said, the overall Integrated National Electrification Programme (INEP) was producing slow delivery of electrification projects requested of both local government and Eskom against the targets shown to MPs.

In probably the last meeting of the present Parliament before its recess, DOE spoke more frankly than has been heard for some time on the subject of its short, medium and long term energy solutions, including a few answers on the problems faced.

Frank answers

DOE explained it had six programmes focus which were outlined as the various areas of nuclear energy; energy efficiency programmes; solar, wind and hydro energy supply; petroleum and fuel energy issues, regulations and development electrification with its supply and demand issues.

DOE specifically mentioned that the Inga Treaty on hydro-power had come into force in the light of theinga fact that conditions to ratify the long term agreement between SA and DRC were satisfied and commercial regulations could begin in order to procure power. This would change the future of energy of solutions. This was a long terms issue but targets for the year on negotiations had been met.

Opposition members were particularly angry that a debate could not take place of nuclear issues and whether South Africa was to procure reactors or not. It was suggested by the Chair that maybe the outcome of COP21 might have given more clarity but MPs maintained that to make a decision DOE, as well as the Cabinet, “must know the numbers involved”.

DOE maintained silence on the issue saying as before that enumerating bid details would destroy the process. It was assumed by the committee at that stage that the then Minister of Finance must be grappling with the issue but MPs wanted an explanation to back up President Zuma’s State of the Nation address on nuclear issues, complaining that nobody in Parliament had seen sight of Energy Minister Joemat-Pettersson nor heard a thing on the issue.

Full team minus nuclear

Present from DOE, in addition to Dr Wolsey Barnard, Deputy DG and Projects and Programmes were Ms Yvonne Chetty, Chief Financial Officer; DG Maqubela, DG of Petroleum Regulations and DG Lloyd Ganta, Governance and Compliance.

On solar energy, DOE said some 92 contracts had been signed in terms of the IPP programmes. Forty of them were now operating producing some 2.2 megawatts of energy at a “cheap rate” when on line and solar germanythe grid being supplied but it became more expensive when not being taken up. Dr Barnard explained that South Africa was not like Germany which was connected to a larger EU “mega” grid in Europe where it both received and supplied electricity.

SA’s system, he said was rather a “one-way supplier”, solar energy being made available only when needed by the grid. But as SA grew economically, things would change.

He commented that the new solar energy station in Upington had not yet been completed but shortly it would not only be supplying energy “when the sun was shining” but, importantly, be able to stored energy for later use. This made sense with the purpose of the IPP programme, he said.

The big failure

On the issue of the PetroSA impairment of R14.5bn, subject raising again the temperature in the meeting, DG Lloyd Ganta of DOE explained that the PetroSA impairment had happened mainly for two reasons.
The first was that PetroSA had made a loss in Ghana to the value of R2.7bn, primarily, he said, due to the fluctuations in the price of oil, the price falling from $110 per barrel to $50 at the time shortly after their entry and at the point of the end of the first quarter.

Project IkwheziThe second reason was due to losses at Project Ikwhezi (offsea to Mossgas) where volumes of gas extracted were far lower than expectation, the venture having started in 2011. At the end of the 2014/5 financial year, only 10% of the expected gas had been realised. When parliamentarians asked what the new direction was therefore to be, the answer received was that engineers were looking at the possibility of fracking at sea to increase the disappointing inputs.

The financial reports from Ms Chetty of DOE confirmed the numbers in financial terms making up the loss,

Dependent on oil price

Acting DG Tseliso Maqubela then stressed that nothing could not change the fact that South Africa was an oil importing country but the country was attempting to follow the direction of and promises made on cleaner fuels and it had been decided to continue with the East coast extraction.

In terms of the NDP, DOE said that South Africa clearly needed another refinery for liquid fuels but

refinery

engen durban refinery

whilst an estimated figure of R53bn had been attached to the issue some time ago for the financing of such, the issue of upgrading existing plant had not been resolved with stakeholders.

Oil companies, he commented, had said that if the government were not to pay for this in part, especially in the light of fuel specification requirements also required to meet cleaner fuel targets set by international agreements signed by SA, the motorist would have to foot the bill as the country could not import clean fuel as such to meet all demand.

More refining capacity

“A balance has to be found with industry and a deal struck”, he said, the problem being that the motorist was at the end of the fuel chain and such a call would affect the economy. He said that possibly the refinery issue could be approached in a phased manner and at perhaps a lower cost.

In the meanwhile, cleaner fuels were a reality and already some traders had applied to the DoE for licenses to construct import facilities, one in Durban and one in Cape Town.

If traders were to bring in large quantities of clean fuels, he said, this would represent a complete change in the petroleum sector and an energy task team, made up of government and main stakeholders was at present putting together a full report on cleaner fuels and a strategy for the future.

LPG a problem

lpgThe Liquid Petroleum Gas (LPG) situation was different, he said, since in this area there was not enough production and import storage facilities and it was a question of short supply therefore to the market – a problem especially in winter.

Both propane and butane, the main constituents of LPG are used in the refining process in the far more complicated process of straight petroleum fuel production and with the economies of scale that have to apply to South Africa, this resulted in a high market gate price and insufficient quantities, he said.

Unfortunately, LPG was becoming very much the energy source of preference with householders,especially poorer homes, hence the pressure on government to find some way of introducing LPG on an a far larger scale and at a lesser price. The impression was given that LPG “got the short straw” in terms of production output numbers.

Nuclear non-starter

Again when the subject came round to nuclear matters, no officials present from DOE were in a position to answer MPs questions on why eight nuclear power stations should be necessary, if nuclear was indeed a necessity at all, and whether the affordability had been looked at properly – the chairman again suggesting that the matter be put off until reappearance of the Minister of Energy in the New Year.

Gas on back-burner, as usual

Finally, on questions of gas and fracking, DG Tseliso Maqubela said that government “was takingmozambique pipeline a conservative approach” inasmuch that any pipeline from Northern Mozambique to South Africa was not under consideration but that plans were afoot to expand existing pipelines from that territory in the South.

On fracking, as most knew he said, a strategic environmental assessment had been commissioned, basic regulations published and also the question of waterless fracking was a possibility, now being investigated.
Previous articles on category subject
MPs attack DPE on energy communications – ParlyReportSA
Eskom goes to the brink with energy – ParlyReportSA
South Africa at energy crossroads: DOE speaks out – ParlyReport
Gas undoubtedly on energy back burner – ParlyReportSA
SA aware of over-dependence on Middle East, says DOE – ParlyReportSA

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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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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/
 

 

Posted in Enviro,Water, Facebook and Twitter, LinkedIn0 Comments

Eskom goes to the brink with energy

Editorial…..

What war room?….

black bulbFor those who have been associated with a war, they will know that a war room is a pretty busy place. However, one gets the impression that the South African war room, mandated to sort out Eskom and energy planning, has no red telephone and little understanding of working overtime in a time of crisis.

Spokesperson, Mac Maharaj or his  replacement, has certainly issued no statements headed with such a title, the President being busy visiting Egypt, Algeria and Angola with the deputy president calling in on the Kingdom of Lesotho.  President Mugabe has come and gone, more presidential visits are planned…… and the World Bank report on South Africa has been published.

Teetering on the edge

Meanwhile, the Eskom issue is still boiling over, the question of the fourth round of IPP tenders and more to come has been announced by the minister of energy but little evidence exists that a war room exists, let alone a high powered advisory council to advise the war room.  Parliament was, of course, on Easter recess which added to the uncanny political silence on urgent matters, particularly the energy issue, although the story at Medupi with a return to work and the appointment of a new CEO at Eskom seems  calming.

At last public servants are re-appearing from extended Easter holidays but the so-called war room gives the impression of having bunkered down. Hopefully the report in the coming weeks on Eskom, as South Africa tackles some of the other serious matters facing the country, will not only show with what went wrong but what the war room intends to do about it.

Perhaps a picture of the war room sitting and debating might actually help us believe there is one.

Posted in cabinet, earlier editorials, Electricity, Energy, Facebook and Twitter, Finance, economic, Fuel,oil,renewables, LinkedIn0 Comments

MPRDA Bill to be amended urgently

Some form of compromise….

coal miningIn referring back to Parliament the Mineral and Petroleum Resources Development Amendment Bill (MPRDA) and acknowledging in his State of Nation Address (SONA) that in its present form it could be damaging to South Africa’s investment climate, President Zuma and his cabinet have introduced more certainty to both the mining and oil and gas industries.

At least a year and a half delay was a guess if the suggestion that two replacement Bills were to be drafted separating mineral resources from oil and gas in the light of the fact that both have separate BEE charters.

Certainty needed

However, mineral resources minister Ngoako Ramatlhodi has agreed with mining companies and also the point put forward by Chamber of Mines that the best and fastest way forward to bring certainty to theRoughnecks wrestle pipe on a True Company oil drilling rig outside Watford industry would be to pass the Bill subject to amendments based on a new approach to the mining beneficiation issue and the matter of state “free carry” in any successful gas exploration.

Originally, on an issue raised both in submissions and by opposition parties and, even a couple of ANC MPs, the presidency has also agreed to doubts expressed whether, once signed, the MPRD Act after amendment would pass constitutional muster on the basis of the amending Bill’s passage through Parliament and the process adopted.

Section 79(1) of the Constitution empowers the President to return a Bill to Parliament for reconsideration if reservations about the constitutionality of the Bill prevail.

Mining land

Subsequently pointed out as a further reason for the Bill not beingtrad leaders signed, raised in a presidency statment issued by spokeperson Mac Maharaj, was a concern of cabinet that the Bill had to be processed through the Council of Traditional Leaders.

Parliament passed the Bill all in a rush at the end of March 2014 after much lobbying by ANC whips and despite warnings and constitutional challenges from many parties.  Nearly a year has passed since sending the proposals off for presidential assent.

The subject of the regulatory environment has not even been touched upon or has come up in the debate at this stage.

During the parliamentary recess both the Chamber of Mines and others have complained of sustained uncertainty in their industries and in the investment world.

Two issues emerged almost immediately when the President announced he was delaying his signature. The first issue was a hefty warning from mineral resources minister Ngoako Ramatlhodi who said “the implications for companies that did not meet BEE targets set out in the mining charter would be severe”, inferring that this might eventually affect the granting of mining licences. He raised, once again, the issue of employee shareholding.

“Developmental” metals pricing

Consequently, it still remains somewhat foggy what government policy was in instituting such clauses other than an overall ambition for the state to have more ownership of strategic resources in both industries and the drive by minister of trade and industry, Dr Rob Davies, to assist smaller manufacturing metals industries becoming more viable at the cost of larger industries, therefore creating more jobs, he said.

On the subject of BEE and the two different charters affected, all that has been said officially was a remark by minister Ramatlhodi “We have to satisfy ourselves that the Act meets our broader socio-economic development activities.”

The second issue to emerge after the announcement of the return of the MPRDA to Parliament was further mention by the department of energy of“Operation Phakisa”, the speed-up process as part of a co-ordination exercise with the oil and gas industry to reduce reliance on oil imports.

Fracking and renewables

On a separate issue, further statements by ministers with regard to fracking and speeding of delays in the IPP world with renewables has also emerged, overshadowed by the urgent need of an energy plan from the newly formed energy “war room”.

Whatever happens, both industries should be prepared for another round of public comment, hopefully in the first parliamentary period after the Budget…… minister of finance Nene notably mentioning nothing of nuclear interest in his budget speech.
Other articles in this category or as background
Energy War Room formed to meet crisis – Parly ReportSA
Mineral and Petroleum Resources Bill halted perhaps – ParlyReportSA
Medupi is the key to short term energy crisis – ParlyReportSA

Posted in Energy, Facebook and Twitter, Finance, economic, Land,Agriculture, LinkedIn, Mining, beneficiation, Trade & Industry0 Comments


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