Battle lines drawn over lifting of moratorium
Publish date: 04 December 2018
Issue Number: 585
Diary: Legalbrief Environmental
With Mining Minister Gwede Mantashe's lifting of an oil and gas exploration moratorium last week, the battle lines between proponents of investment in the energy sector, and those who fear the impact of such investment on the environment became even more clearly defined, writes Legalbrief. SA will relax a moratorium on gas and oil exploration licences implemented earlier in 2018 to allow exploration and production applications already in the system to be granted, Mantashe announced. A BusinessLIVE report quotes Mantashe as telling an oil and gas industry meeting: ‘This amendment will ensure that applications currently in our system are processed and granted.’ In June, Mantashe published a notice in the Government Gazette announcing a restriction on the granting of technical co-operation permits, exploration rights and production rights. ‘We can't delay exploration because we want to accelerate investment,’ he said. Investment in the industry stalled due to regulatory uncertainty and lower crude prices. Companies with offshore acreage and exploration ambitions in SA include Total, Eni, Sasol and ExxonMobil.
Environmental activists are poised to go to court in their battle to prevent exploration for oil and gas off the KZN coast. A Business Day report notes that a study by the CSIR has shown that SA has potential oil and gas reserves of between nine and 11bn barrels off its coast. To realise that potential, and to help the economy reduce carbon dioxide emissions, the government’s Operation Phakisa has set a target of sinking 30 exploration wells offshore over the next 10 years. Drilling for oil exploration is expected to get under way early in 2019 after Mantashe's announcement. Environmentalists hope to halt the process through various means, including petitions, mass mobilisation and court processes. Desmond D'Sa, head of the South Durban Community Environmental Alliance, who is also the leading member of a consortium of environmental organisations opposed to the drilling off the KZN coast, said it was unfortunate the Minister had given the go-ahead for offshore drilling for gas and oil without considering the objections of environmentalists and other stakeholders. He said they would do everything possible, including taking the government to court, to halt the drilling.
Meanwhile, Parliament’s Portfolio Committee on Energy last week adopted its report on the draft Integrated Resource Plan (IRP2018), recommending that this plan be flexible enough to adapt to a rapidly changing energy environment. The plan contains several recommendations, including the expediting of the finalisation of the plan within the current financial year. According to an SA News report, the Department of Energy briefed the committee on the draft IRP in September. The plan serves to guide government’s plan for electricity provision within the energy mix. This follows Cabinet’s 22 August approval of the draft updated IRP 2018. The Committee made several recommendations following public hearings conducted in October. Given the uncertainty in future demand, technologies and innovation, the committee recommends that any IRP should be flexible enough to respond to these uncertainties, including exploring the feasibility of new and agile approaches to energy provision in this rapidly changing energy environment. The committee also suggests that the department be directed to conduct a thorough socio-economic impact assessment of various energy mix scenarios in preparation for the review of the IRP by 2020. The committee also recommended that Energy Minister Jeff Radebe convene an energy summit to comprehensively discuss and map out the energy future for SA. The first IRP for SA was promulgated in March 2011. It was indicated at the time that the IRP should be a ‘living plan’, which would be revised by the department frequently.