…..article dated 9 September 2021…..

Mantashe puts Gas Amendment Bill before Parliament…. 

An interminably long journey has finally come to an end with the tabling of the Gas Amendment Bill in Parliament, introduced by Minister Mantashe as the current minister of energy. The Department of Mineral Resources and Energy (DMRE) have been working on this Bill for some fifteen years and have now finally got around to the task of introducing it to Parliament as the final part of the energy Integrated Resource Plan (IRP).

Whilst it might seem unbelievable that South Africa is only now in 2021 integrating gas solutions into the economy, the reason for the slow birth of this troubled child is directly in proportion to the amount of time it has taken the country to develop the Integrated Resources Plan (IRP) and turn this into an energy master plan

The bad sister

As a component of the IRP, gas for a long time was seen as an expendable and probably unnecessary item, as was solar and wind, in comparison to coal-based generation which was eventually to be supplanted in the long term by nuclear.

However, the Bill has finally arrived, legislation which “seeks to modernise South Africa’s 20-year-old Gas Act and promote the orderly development of the gas industry”.  However, being 2021, the proposals now face further opposition from environmental organisations, already vocalized in Parliament by the Centre for Environmental Rights (CER) and groundWork.

“It is the government’s constitutional imperative to protect South Africans against the many impacts of climate change,” the organisations both said in their recent submission on the draft law. “This protection must include investing in abandonment of fossil fuels and not putting frameworks in place that facilitate or accelerate new fossil fuel development such as gas infrastructure.”

Speeding up change

The Gas Amendment Bill states that it will “provide for socioeconomic and environmentally sustainable development and will facilitate gas infrastructure development and investment”, the argument being from DMRE that by providing space for gas development in a somewhat limited manner the move from heavy carbon emissions will be faster.

But CER says any support for fossil fuel development will have “far-reaching implications” in South Africa and globally, displacing livelihoods in affected areas and driving an increase in carbon emissions”. Such statements will now become part of parliamentary debate for the months to come, but there is no doubt that if South Africa is going “to do” gas, which it has finally said it will, it will do it in an orderly and planned manner, says DMRE.

Gas uses

In 2019, DMRE allocated 3, 000MW to gas technology when the IRP was finally announced, the allocation being a long journey from the 2014 Gas Utilisation Master Plan (Gump) issued by the old department of energy. This document, based on the Green Paper released by DOE earlier, provided the framework for investment in gas-supporting infrastructure and how gas could slot in with the electricity, transport, the domestic world, and industrial sectors.

During the 2021 national budget vote, Minister Mantashe announced that in December 2021, DMRE will be calling for the bids to supply the 3,000MW of gas, following up on the recent call for 2,600MW from wind and solar energy, so the Gas Amendment Bill is not before time.  He told parliamentarians that an Environmental Impact Assessment study has been undertaken for three Gas to Power Plants of 1000 megawatts each to enable Gas to Power projects in Special Economic Zones.

Union grip

The Minister once again made the breakthrough statement that gas is seen by DMRE as the first major step to transitioning South Africa away from coal power, confirming that renewables such as wind and solar are the best ways to meet SA’s commitment to international clean energy targets.

With gas more recently being considered a “bridge fuel” that is cleaner because of its lower carbon dioxide emissions than coal or oil, he said, power plants will be required that are more flexible and cheaper in order to match renewables and their performance.  He quoted experts in the industry who say gas provides a solution and, in addition, gas sorts out the voltage stability issues that also come with renewables.

The passing of this Bill is, no doubt a mere formality

Exploration for gas

The Upstream Petroleum Resources Bill is tabled at the same time. This latter proposal is the action document that will make gas development possible, bearing in mind gas found in SA terrain or its waters are a state resource.

The legislation proposed lays provisions for “equitable access to and sustainable development of South Africa’s petroleum resources” and the plan is to form a company, the National State Oil company “to receive 20 percent carried interest in any exploration and production rights, and a percentage, yet to be agreed, of any petroleum sales from such resources”.

All about the money

In approving the Bill, Cabinet declared recently that the Upstream Gas Petroleum Resources Bill provided “a legislative and regulatory framework to create a conducive environment for investment, growth and job creation in the upstream of petroleum resources market”, obviously referring to the gas exploration portion and receipts from market entrants.

Some of the objectives stated in the proposed legislation include “recognizing the right of the state to exercise sovereignty over all petroleum resources in South Africa and promoting equitable access to the country’s petroleum resources, facilitating participation by black South Africans in the upstream petroleum sector”.

The draft Bill further states that it will “provide for security of tenure in respect of exploration and production operations, ensuring that holders of production rights contribute to the socio-economic development of the areas in which they are operating and encouraging and promoting national development of petroleum resources by speeding up exploration and production”.

 

 

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