PAUL WANI LADO: SA cannot justify its sustained investment into fossil fuels

The Upstream Petroleum Resources Development Act (UPRDA) was assented to by President Cyril Ramaphosa and published in the Government Gazette of October 29.  

The new legislation, which seeks to accelerate oil and gas extraction in SA, will form the building block of the country’s legislative framework governing oil and gas exploration and production. But what does this mean for SA’s climate change commitments, both in terms of domestic legislation and our international obligations?

And, given the conflict of laws that has been created, does the act provide the legislative certainty a new law should?  It provides for the creation of a petroleum right, in terms of which applicants for oil and gas rights will be able to explore for and produce gas under a single licence. 

This is a departure from the regime under the Mineral and Petroleum Resources Development Act, which provided for separate application procedures for exploration and production. 

While the creation of the petroleum right accords with the government’s intention to fast track the establishment of an oil and gas industry in the country, petroleum rights are not provided for in the existing environmental legislative framework, particularly the National Environmental Management Act and associated regulations, as well as the “one environmental system” within which extraction licences are awarded.

In essence, the act creates a right that sits outside the realm of the current environmental legal framework. The transitional provisions of the act do state that the petroleum right will not come into effect until regulations are made to align it with existing environmental laws. Whether these anticipated regulations will adequately address the misalignment of laws remains to be seen.  

The Climate Change Act was also signed into law in July this year, and was hailed as crucial legislation intended to define, manage, monitor and implement SA’s response to climate change.   

With both the UPRDA and the Climate Change Act not yet in force pending a proclamation by the president, important questions remain about the interplay between two laws that on the face of it have differing purposes. A law that seeks to accelerate gas extraction, a major source of greenhouse gas emissions, runs counter to a law that incorporates the greenhouse gas reduction commitments that SA is obliged to meet in terms of the Paris Agreement on climate change.   

Climate change

As a signatory to the Paris Agreement, SA is obliged to take measures to reduce its greenhouse gas emissions to assist international efforts to halt global warming. The world is in the throes of a climate emergency, and while it can be argued that it has been largely caused by developed nations, the unjust reality is that developing nations, the most of which are in the Global South, will bear the brunt of the adverse effect of climate change, such as floods, droughts and extreme heat.

The UN Framework Convention on Climate Change confirms that Sub-Saharan Africa is projected to warm at twice the global average rate. Already SA is battling water scarcity, drought and deadly flooding. 

To avert catastrophe, there is a need for rapid and significant reductions of greenhouse gases. Gas extraction is a significant source of greenhouse gas emissions through fugitive methane emissions during the extraction process. Methane is a potent greenhouse gas, with a 28 times higher global warming potential than carbon dioxide. According to the Intergovernmental Panel on Climate Change’s (IPCC) Fifth Assessment Report, commonly referred to as IPCC AR5, methane makes up 25% of the greenhouse gases that cause climate change.  

The International Energy Agency advised in its report, “Net Zero by 2050: a Roadmap for the Global Energy Sector”, that for the world to limit global warming to 1.5°C above pre-industrial levels, there should ideally be no new oil and gas projects authorised. 

An act that openly provides for the acceleration of gas extraction runs counter to the country’s global warming pledges made globally, as well as the best available science. And due to the adverse health, socioeconomic and environmental effects, it can also be argued that it runs counter to government’s obligation to respect, protect, promote and fulfil the rights in the constitution’s bill of rights.  

Economic peril

The fossil fuel lobby will argue that gas should be used as a transition fuel towards clean energy. However, this approach opens the door to gas potentially becoming a stranded asset. With global trends moving away from fossil fuel and carbon taxes being attached to goods and services that are carbon-intensive, there is a real risk that large amounts of money invested into the gas industry may never be fully recovered in future.  

The fossil fuel lobby tries to paint those concerned about climate change and the environment as being anti-development, but the reality is that the “development” they speak of is the enrichment of the few who own and run multinational extraction companies and their local shell companies.

The average citizen is unlikely to benefit much by way of financial gain or community development. The act does not contain any social and labour plan regime, and a brief look at the mining sector reflects that little of the money allocated for community upliftment actually goes towards that purpose.

True development uplifts the most people, not a select few stakeholders — it does not destroy the environment people depend on for their health and wellbeing, their lives and livelihoods.  

In an age where the cost of renewable energy is falling and independent experts call for an increase in clean energy investment globally, the government’s continued significant investment into fossil fuels cannot be reasonably or morally justified.   

• Wani Lado is an attorney at the Centre for Environmental Rights.