4 August 2021
By Julia Evans
Daily Maverick article here
The Gas Amendment Bill, which aims to adjust the outdated Gas Act of 2001, has been criticised by environmental organisations. They believe that the bill conflicts with climate crisis targets, will have financial implications, will negatively affect vulnerable communities and gives disproportionate authority to the minister of mineral resources and energy.
In April 2021, the Gas Amendment Bill — which sought to amend the Gas Act of 2001 (put in place to foster the development of the piped gas industry) — was published and introduced by the Minister of Natural Resources and Energy, Gwede Mantashe, to the National Assembly, where it is now under consideration.
The bill’s stated intentions include a provision for “socio-economic and environmentally sustainable development”.
However, since the bill has been open for comment (25 June), several environmental organisations have contested its claim to be sustainable, arguing that the development of the fossil fuel industry conflicts with necessary climate action and climate targets.
Attorneys from the Centre for Environmental Rights (CER), on behalf of groundWork and CER, and separately the coalition of Oceans Not Oil (ONO) — which has 25 affiliated organisations — both submitted their comments on the bill on 30 July 2021.
Gas is not green
Both comments submitted by the organisations questioned the bill’s claim to be environmentally sustainable, arguing that the gas industry will negatively affect the climate and the environment.
Historically, gas has been seen as a “bridge fuel” and relatively clean energy source as it generates fewer carbon emissions than coal and oil.
However, this thinking has become outdated as it’s clear the process of extracting the gas uses a lot of energy, emits large amounts of methane and puts a strain on already vulnerable water resources.
Co-founder of Oceans not Oil, Janet Solomon, explains that the extraction process of gas burns a lot of energy, “you have to look at your energy return on energy investment. So when you look at that, gas is no longer as sexy as it looks when you just light a match to it.”
Attorneys from CER state in its comment, “[Liquid Natural Gas] is neither clean nor particularly low in emissions. In addition, the massive investments in new infrastructure to support this industry, including pipelines, liquefaction facilities, export terminals, and tankers, creates new fossil fuel dependence, making the transition to actual low-carbon and no-carbon energy even more difficult.”
Additionally, CER attorneys told Our Burning Planet that, with this, “gas is susceptible to fugitive emission of methane during extraction, transport and storage,” explaining, “methane is a potent greenhouse gas, with a global warming potential of 84-86 times greater than that of carbon dioxide over 20 years..”
In the comment submitted by ONO, it looks at environmental and socioeconomic impacts of the gas infrastructure that would be built. For example, the potential for methane leakage along the proposed National Gas Pipeline, “if you’ve got 3,500km of gas pipeline, they’re going to be flaring every 187km,” says Solomon. “You could have a pipe flaring in your own backyard. And then you’ve got respiratory problems for animals and humans from the flaring.”
ONO’s comment states, “studies show that leaks to pipelines are par for the course, affecting communities and global warming, since what escapes is methane, which traps 84 times more heat per mass unit than CO2, over a 20-year period .”
Additionally, groundWork highlights how the production of gas by fracking (hydraulic fracturing) is water intensive, placing huge demands on water resources.
Avena Jacklin, senior campaign manager for climate and energy justice at groundWork, told Our Burning Planet, “each square kilometre can have up to 20 drill wells. And each drill well would require 20 million litres of water to be pumped in along with frack fluid… so where would this water come from?”
Additionally, groundWork says the process can contaminate underground and surface water resources. In the context of the climate crisis where we are experiencing droughts and water shortages, this is a concern.
ONO says that based on this understanding, the word “sustainable” should be removed from the Gas Act entirely.
The bill is in contradiction with necessary climate crisis action, IPCC targets and the Climate Change Bill
These environmental organisations base their view that the gas industry is not environmentally sustainable on Intergovernmental Panel on Climate Change (IPCC) targets and other international reports.
CER said in its comment that the Minister of Natural Resources and Energy has failed to consider the context of the climate crisis, stating, “temperatures in the region are increasing at twice the rate of the global average. It is the government’s constitutional imperative to protect South Africans against the impacts of climate change.”
ONO said in its comment, “the unabated use of natural gas is incompatible with achieving the climate-neutrality objective by 2050. Studies show further development of gas infrastructure is incompatible with the IPPC’s target of keeping global increases in temperature below 2°C.”
Similarly, CER and groundWork said in their comments, “already South Africa is falling behind on its global and constitutional obligations to address climate change. The country’s commitments fall outside the fair share range and are not consistent with the Paris Agreement 2° Celsius target — let alone the 1.5° benchmark set by the IPCC.”
Both organisations cited the recent International Energy Agency (IEA) report that said if the world is to avoid irreversible climate change, there can be no new investments in fossil fuels.
Jacklin said, “while you have the Climate Change Bill and you’re developing this kind of climate legislation, trying to formalise the Gas Bill is kind of in contradiction. We’re just trying to point out how it doesn’t make sense.”
The Climate Change Bill, released in 2018 by former Minister of Environmental Affairs, the late Dr Edna Molewa, states its intention to build a “Just transition to a climate resilient and lower carbon economy.”
Solomon agrees the bill contradicts the Climate Change Bill, but says more needs to be done to ensure these ideals are met. “All of these things that are hanging need to be pegged down. We haven’t even got climate emission targets set in South Africa yet.”
In line with this, lawyers from CER told Our Burning Planet, “We argue that South Africa needs to adopt a strict nationally determined contribution target aligned with SA’s fair share contribution to the global mitigation effort and as required by the Paris Agreement — to which SA is a signatory.
“The DMRE [Department of Mineral Resources and Energy] needs to revise its now outdated and out of touch with demand projects, IRP [Integrated Resource Plan] 2019, to abandon the plans for costly new coal and gas and consider renewable energy sources.
“We argue that despite claims by the government that the draft NDC represents a ‘fair share’ of emissions reduction for South Africa, modelling done by the Climate Equity Reference Project shows that the proposed targets do not meet the need to limit warming to 1.5°C. This is a target many feel is vital to achieve for South Africa, which is forecast to warm at twice the average global rate.”
Vulnerable communities will be most affected
CER’s comment on the bill says that the development of fossil fuels, “will have far-reaching implications for people both nationally and globally, ranging from environmental impacts to the displacement of livelihoods in the affected areas to increasing our carbon emissions which will in turn have an impact on climate change.”
Jacklin from groundWork said that apart from the impact on the climate and the environment, vulnerable communities will be most affected by the development of the gas industry.
“We all know that the poorer communities are more impacted by acts of climate change, as well as women and children.
“Traditionally, we’ve always seen a lot of the poor black communities living alongside fossil fuel. And they are the ones that actually faced the biggest impacts, which is the pollution, the leaks, the fires, the contamination of the soil, etcetera. And is that really what we want to continue to propagate?” asks Jacklin.
Sasolburg and Khayelitsha are examples of vulnerable communities that exist alongside fossil fuel resources.
“And not only that, but gas infrastructure is also associated with the displacement of people and livelihoods,” says Jacklin, explaining that when gas infrastructure is built — such as pipelines or storage facilities — generally landowners are consulted and sometimes compensated.
However, informal landowners — those who rent land, or have a garden in an informal setting or own a small business or smallholding — will not necessarily be consulted when gas infrastructure starts encroaching on where people live.
These critiques demonstrate how the gas industry does not facilitate a just transition, as the Climate Change Bill asked for.
“We need to address these inequalities and the injustice of the past when it comes to our energy solution for now,” says Jacklin, asking, “Why are we going back to these outdated ways of procuring energy, which have all the social and environmental implications?”
The Gas Amendment Bill states, “the Bill will not have any organisational and personnel implications for the Department and does not create further financial liabilities to the State”.
CER, on behalf of groundWork, and ONO contest this statement, arguing that the bill will have financial implications.
In CER’s comment, it stated, “essentially, calculating the external costs of exploiting fossil fuels would in all likelihood show that if the Gas Bill had to absorb the external costs of the resultant GHG [greenhouse gas] emissions, it would not be financially feasible to operate”.
Additionally, it questions whether the development of the gas industry “would even be economically and legally viable in a market where fossil fuels are increasingly constrained and such projects are likely to become stranded assets with high economic costs for the country”.
ONO supports this thinking, similarly criticising the long-term investments needed for gas projects, stating, “Gas projects are 30-year-plus projects, customers are unwilling to commit to contracts longer than 10 years and a retreat of bankers from financing new fossil fuel projects has begun.
Additionally, ONO looked at the risk of stranded assets. “New LNG [Liquified Natural Gas] and gas projects have considerable risks of being stranded assets prior to the operating life being complete.”
Jacklin says the gas industry doesn’t help with job creation as it’s generally highly specialised and works with hazardous materials (such as hydrocarbons).
The South African National Petroleum Company, which is the product of the merger of Central Energy Fund (CEF) subsidiaries iGas, PetroSA and the Strategic Fuel Fund (SFF) (April 2021), will play a major role in the development of the gas industry if this bill were to move forward.
Considering this, ONO critiques the financial history of state-owned enterprises [SOEs] including their losses and the debt they still owe. ONO’s comment says “none of these SOEs finds themselves in a gross-profit-generating situation”.
Solomon tells Our Burning Planet, “None of them [the SOEs] have proven themselves in terms of real profitability at this stage.”
Solomon also points to the financial implications for South Africa’s taxpayers, arguing that the public will bear the cost of Strategic Fuel Fund (SFF) stock which holds an environmental liability.
“SFF has reported a 61% drop in revenue (2019), and faces the potential of over R2-billion in losses from litigatory action,” says ONO.
Bill gives minister of mineral resources and energy ‘disproportionate authority’
In their comment, CER and groundWork say: “The powers and obligations afforded/imposed on the Minister and the Energy Regulator under the bill are problematic.
“Firstly, the Minister is not granted a discretion to award licences and rights contemplated under the bill — if certain criteria are met, the Minister is obligated to grant these permits and rights.”
They believe that based on the Gas Amendment Bill the mineral resources and energy minister seeks to encroach on the work of the environment minister, which goes against the One Environmental System (OES) process.
“The Minister has irregularly sought to violate the One Environmental System (OES) in the bill and encroaches into the sphere of environmental regulation by granting this authority to the Energy Regulator, thereby encroaching into the territory of the minister of forestry, fisheries and environment.”
Lawyers from CER explained that, according to the OES, the minister of mineral resources and energy can issue environmental authorisation and waste management licences for mining operations; however, the minister responsible for legislating on environmental matters is the Minister Of Forestry, Fisheries and Environment Barabara Creecy.
Solomon from ONO agrees. “A lot of the clauses are very broad, and give both the minister of mineral resources and the Energy Regulator far too much influence.”
Why aren’t we focused on renewable energy?
Considering the socioeconomic and environmental implications of gas, (especially in the context of the climate crisis), it doesn’t make sense that the focus is on implementing gas instead of renewable energy alternatives.
Solomon says South Africa has a rich basket of renewable energies such as wind, solar, wave and geothermal energy alternatives. Additionally, it’s been found that this type of renewable energy is more cost-effective than gas and deployable on a large scale.
Jacklin says, “one basic fact is that renewable energy and storage could generate three times more emergency power than [gas] procurement and at a lower cost.”
Solomon believes that energy in SA is down to political will. “Gas has been seen as the saviour; that’s the narrative. And the counter-narrative is not loud enough. It’s not allowed to be loud enough.”