LEANNE GOVINDSAMY: The time for investing in SA’s oil and gas sector is over

Anyone who claims the development of a new oil and gas industry in SA will reduce unemployment, inequality and poverty is ignoring decades of evidence about how fossil fuel extraction fails to deliver prosperity and sustainable development on a global scale.

The economy was built on fossil fuel extraction, and yet more than a quarter of the population is unemployed and the gap between rich and poor is a gaping chasm. SA ranks 109 out of 190 countries in the human development index.

At the end of Africa Energy Week in Cape Town last month it was clear that the oil and gas industry public relations machines had worked overtime, with newswires flooded by spokespeople, including some flagrant climate change deniers attempting to hype up a strident oil and gas sector.

Mineral resources & energy minister Gwede Mantashe is at the forefront, saying at the recent Southern Africa Oil & Gas Conference in Cape Town “Africa cannot continue being a beggar of the world and an import destination for refined petroleum products while it is blessed with a plethora of oil and gas reserves”. This statement was echoed by Central Energy Fund chair Ayanda Noah. 

In September, Mantashe made the fantastical claim that exploitation of domestic oil and gas could boost SA’s annual GDP growth to an unbelievable 8%. Just last week, electricity minister Kgosientsho Ramokgopa announced that the government is accelerating plans for 3GW of gas-fired power generation to help plug the energy deficit and reduce the load-shedding that is hurting the economy.

The question they and other oil and gas proponents — most of whom are European giants whose local operations have been shut down due to climate commitments back home — cannot answer is: how could following a business-as-usual approach possibly result in any outcome other than before?

Corruption correlation

The same few corporations, their shareholders and principals, benefit handsomely as they breach emissions standards with impunity while local communities are left with the environmental, health, social, livelihood and governance destruction that has become the norm in the fossil fuel sector in SA and the rest of the continent.

According to a recent report on Gas in Africa, “multiple studies have shown that oil and gas extraction is highly correlated with corruption, militarisation, economic inequality and failed development goals”. Gas in Africa report also said that with more than 60% of oil and gas extraction in Africa owned by corporations headquartered outside Africa, most of the revenue and profit from oil and gas flow, as always, out of the continent. 

Proponents of oil and gas will also have you believe that SA needs gas as a transition fuel while we anxiously wait for more clean energy to be available for our electricity system. This is not correct. While SA needs some peaking support for the transition it need not necessarily be gas — it certainly does not require an entire domestic oil and gas extraction sector. Developing a domestic oil and gas sector will require major infrastructure that will take decades to build. By then these expensive, dirty projects will be expensive, polluting stranded assets. 

Africa’s vast, untapped renewable energy potential can provide a sustainable and job-rich alternative to fossil fuels. Investing in large-scale oil and gas industry will only obstruct opportunities to develop cleaner and cheaper domestic energy sources faster. 

Fossil gas is also far dirtier than the industry claims — it is not a cleaner alternative to coal. Methane — a climate super-pollutant more than 80 times more potent than carbon dioxide — is the main ingredient of fossil gas. Methane is vented and leaked along the entire gas supply chain. Atmospheric concentrations of methane  more than doubled over the past 200 years, and scientists estimate that this increase is responsible for 20%-30% of climate warming. 

Hiding costs

The entire life cycle from extraction to production to transportation and the combustion of gas contributes significantly to climate warming and ecosystem destruction. The International Energy Agency (IEA) determined  repeatedly that if we are to keep to 1.5°C global warming there can be no new oil and gas fields. The IEA has also shown that a business-as-usual trajectory for global fossil gas demand would lead to 2.5°C of heating. This would be catastrophic for life and quality of life in SA. This is why there is intense resistance, including legal action, against proposals and approvals of new oil and gas across the globe — not just in SA. 

However, those who champion the oil and gas industry are not as concerned about the climate as they are with profits and maintaining the status quo. They will say whatever they think is necessary to hold onto a business-as-usual approach instead of recognising and acting on the global threat we all face. This includes hiding the true human and environmental costs of proposed projects.

The cigarette industry once used doctors in adverts to mislead people about the harmful impacts of cigarettes. We should be much more discerning about the information that is presented to us about the oil and gas industry, particularly regarding claims of development.

That SA may have oil and gas reserves does not mean it is in the public interest to exploit them. SA also has asbestos reserves, but because of its known toxicity and health risks we quite rightly leave it in the ground.

At this precarious moment in human history, and indeed in the context of the fragility of the SA economy, it has never been more important to be critical and cautious of narratives from those with direct vested interests promising improbable solutions to the triple challenge of poverty, unemployment and inequality.

The Gas in Africa report illustrated that developing renewable energy can create two to five times more jobs per dollar invested than fossil fuels and there is substantial evidence that renewable energy can provide universal energy access and support stable, sustainable development in developing economies. 

The evidence is piling up that renewable energy is cheaper and cleaner, and can enable more equitable development and protect our precious land and water for future generations. And it is ready and available now.

The truth is already clearly written on the wall: the time for establishing a large-scale oil and gas industry has long since passed.

• Govindsamy is head of the corporate accountability & transparency programme at the Centre for Environmental Rights. The latter is part of the Life After Coal Campaign.