EDITORIAL: Bountiful gas finds off SA raise complex questions
Natural gas burns cleaner than other fossil fuels but major, long-term investments risk becoming stranded assets
The second big gas discovery in SA waters offers a rare reason for South Africans to be positive.
After all, good news is something to be cherished as SA reels from the impact of the Covid-19 pandemic and taxpayers try to make sense of the R10.5bn bailout for SAA.
Total’s find at its Luiperd well follows another big discovery at Brulpadda, announced in early 2019. Together the discoveries indicate an enormous, commercially viable opportunity for SA which, by one calculation, could bring R1.5-trillion in economic benefits over 30 years.
Gas could make a big contribution to SA’s energy security. Gas-to-liquids technology, such as that at Mossgas, could be used to produce fuel, and gas power plants could feed electricity into the grid. Eskom’s open cycle gas turbines, which guzzle 12l of diesel every second that they are used, could at last be converted to enjoy the cheap and plentiful supply of indigenous gas. The gas could also birth a petrochemicals industry in the impoverished Eastern Cape, the economic spin-offs from which would be big. At last it looks like SA’s ambition to become a gas economy could actually be in reach.
The government has already made the critical move to separate oil and gas legislation out from the mining policy framework, and mineral resources & energy minister Gwede Mantashe has said the Upstream Petroleum Resources Development Bill is being finalised with the required speed.
However, as much as South Africans are starved for good news such as this, there is an elephant in the room that won’t be ignored for much longer. Gas — regardless of its quality — remains a fossil fuel. And it’s certainly no secret that those are falling out of vogue fast as the global effort to arrest global warming and climate change intensifies.
Natural gas burns cleaner than other fossil fuels, such as oil or coal, but it is a fossil fuel nonetheless.
Proponents of gas often recognise that it is still a fossil fuel, but tend to argue that it can act as an effective bridge on the global journey away from polluting coal towards zero emissions.
Renewable energy technologies such as wind and solar are taking up more and more space in the energy mix of many countries, and SA is no exception. But their output remains variable — they cannot produce power consistently like a coal-fired power plant can. Until there are commercially viable solutions to store green power for later use, a baseload solution will have to be part of the mix.
It’s here that gas, for example the use of gas-fired peaking plants, can play that transitional role away from coal.
Some argue gas is not much cleaner than coal or oil. As fossil gas is mostly methane — a far more powerful greenhouse gas than carbon dioxide — it has been known to leak out at various points along the gas supply chain, thereby contributing significantly to global warming.
Detractors go as far as to say that the time for developing gas resources has passed and, along with other fossil fuels, any discovery ought to stay in the ground. Some will argue that — given the rapid pace of technological innovation in the energy space, and shrinking carbon budgets globally — going big on gas now is terribly short-sighted and it is even dangerous to make major, long-term investments in what could one day become stranded assets.
Total needs to determine if and how it will develop this gas, weighing up environmental concerns amid growing concerns even as scientists note natural gas produces fewer pollutants that can harm humans and half as much carbon dioxide as coal to produce the same energy.
The last thing Total should be thinking about should be the regulatory environment, which should be conducive if SA wants to attain its gas ambitions and draw investments in an economy trapped in recession.
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