DRAFT GAS MASTER PLAN
COMMENTS FOR SUBMISSION
TO
THE DIRECTOR GENERAL OF THE DEPARTMENT OF MINERAL RESOURCES & ENERGY
JUNE 2024
Introduction
The Kromme Enviro-Trust is an environmentalist NGO in the St Francis Bay area, near Humansdorp in the Eastern Cape. This district is a power-production centre, with five existing wind farms, three wind farms under construction, and an identified site for a possible nuclear power station at Thyspunt.
The DMRE published the draft Gas Master Plan (GMP) 2024 on 26 April 2024. Our response to the GMP is that it defies South Africa’s agreed nationally determined contribution (NDC) mitigation targets in terms of the Paris Agreement, fails to plot a way forward that adequately reduces the country’s greenhouse gas emissions, and sacrifices the long-term health of its population for the sake of resource exploitation. It downplays the climate impacts of gas and the potential risks of relying heavily on imported gas. It lacks substantially in detail and makes no reference to up-to-date international scientific information and data in making its predictions. It provides no information on the cost of gas infrastructure, nor present alternative scenarios where the gas demand decreases over the next 25 years.
- Defying South Africa’s Paris Agreement Commitments
The GMP is focused not on achievement of the Paris 1.5° goal but on maximising the use of South Africa’s fossil fuels.
The GMP states that all possible energy sources must be utilised for sustainable economic growth and socio-economic development, referring to fossil fuels such as coal, uranium, liquid fuels and gas which Government is committed to process in “an environmentally responsible manner”. It recommends that South Africa should drive massive additional exploration projects, alluding to unconfirmed large-scale gas resources in the Karoo.
This is completely oppositional to the global accord to move away from fossil fuels and can in no way be environmentally responsible. Mitigating the worst impacts of the climate crisis and meeting global climate goals depends on transitioning to renewables without any new investment in fossil fuel infrastructure.
According to the International Energy Agency’s 1.5°C net-zero pathway, to reach net zero emissions by 2050, unabated gas fired generation must peak by 2030 and be 90% lower by 2040, compared to 2020 levels.[1]
Yet, the GMP models gas demand to significantly increase after 2026 and continue to rise till 2050 and beyond. No consideration is given to an increasing percentage of energy demands met by renewables. As the GMP is intended to provide “a roadmap to guide future strategic, political and institutional decisions” this projected growing demand will serve as motivation to push gas exploration projects in the next 25 years.
- Climate impacts of gas downplayed
Natural gas is heralded as the cleanest burning fossil fuel that can support the reduction of pollution and enable the country’s move to “lower carbon” technologies.
Compared with other fossil fuels, natural gas emits the least amount of CO2 into the air when combusted. However, CO2 emissions do not account for methane leakage in gas production and transportation, which can account for up to 9% of gas produced, according to a recent study.[2] Methane has a 28 times greater global warming potential than CO2 and is 84 times more potent over a 20-year period. Methane leakage of more than 3% makes generating power with gas worse for the climate than using coal.
Despite being the fourth largest emitter of methane in Africa[3], South Africa has, conveniently, not signed the Global Methane Pledge, one of only a handful of African countries not to participate.
These concerning facts are conveniently omitted from the GMP to promote large scale gas developments and disregard the need to model scenarios considering an earlier exit from fossil fuels and building of a green economy.
- Risks of volatile gas prices and gas supply instability downplayed
LNG imports are expected to account for most of the total gas supply (80%+) after 2030. The risks of relying significantly on imported gas and high volatility of LNG prices are mentioned briefly and possible solutions presented are very unconvincing – such as, still to be negotiated, accelerated regional imports (still only 28% of total supply) and the distant goal of indigenous gas production. Block 11B/12B is modelled to supply gas from 2027 although environmental authorisation for production has not been granted and should it go ahead, first gas cannot be expected before 2029/2030. High volatility of LNG prices is addressed by vague suggestions of monitoring prices carefully and enhancing regulatory instruments.
A recent study[4] through The Hague Centre for Strategic Studies stresses the importance of long-term demand reduction strategies to mitigate gas supply security risks in the 2030s. According to the Global Energy Monitor (GEM)[5] the rapidly declining cost of renewables and battery storage, combined with the increased volatility of gas prices, make a coal to clean energy switch more attractive. An accelerated transition to renewables will reinforce energy security by reducing reliance on gas imports. GEM warns that continued investment in fossil fuels will expose regions to economic and geopolitical risks.
Apart from the section on the Role of Gas, no scientific sources are cited in the GMP. It is not presented as a well-researched, meticulous plan underpinned by current reliable scientific sources. Rather it seems to be a long motivation for the DMRE agenda to drive massive exploration projects for fossil fuel resources. Any concerns that would suggest considering a different course of action, are downplayed by presenting vague inadequate solutions.
- No indication of the cost of gas infrastructure, risk of stranded assets
No cost estimations are given for the conversion of OCGT to CCGT power stations, conversion of Eskom coal to gas-fired power stations, building of pipeline and associated infrastructure, LNG receiving and distribution infrastructure, leasing and buying of FSRUs, modifications to infrastructure to later switch to hydrogen.
No cost comparison is made between a coal-to-gas and a coal-to-clean energy switch, which may become increasingly more economical considering the rapidly declining costs of renewables and battery storage.
This document is made available for public comment, yet there is insufficient information for the public, taxpayers, to make an informed decision about the desirability and feasibility of this supposed Master Plan.
Continuing to invest in fossil fuel infrastructure represents a stranded asset risk as the global energy transition unfolds, since these investments will need to be retired early if governments move to reduce gas capacity to meet a net-zero pathway. The pursuit of domestic gas production envisaged in the GMP defies economic logic. World gas demand declines significantly after 2050, according to International Energy Agency predictions. Steve Nicholls of the Presidential Climate Commission[6] cautions that investing in gas infrastructure would require recovering the capital investment before 2050 because in that year it will be necessary to phase gas out of the economy or to switch the infrastructure to hydrogen (significantly more expensive) or to invest in a means of carbon capture and storage (also significantly more expensive). In all likelihood investments in gas infrastructure will be stranded within a 25-year time frame.
Nicholls sees gas as strictly short term, or Horizon One as the IRP defines it, while South Africa works to achieve the ‘greener industrialisation’ that will allow it to be competitive internationally and to achieve economic growth.
Conclusion
The GMP sets out from the first sentence to promote the DMRE agenda to drive massive exploration projects for and commercial development of fossil fuel resources. Any concerns that would suggest it prudent to consider a different course of action, are downplayed by presenting vague incomplete solutions. The GMP is not in line with international research, trends and developments. By no means does it meet the stated objective of ensuring that environmental assets and natural resources are protected.
As environmentalists the Kromme Enviro-Trust rejects this plan and its attempt to prolong the country’s dependence on fossil fuels.
Kromme Enviro-Trust (St Francis)
Contact: [email protected]
[1] International Energy Agency. Net Zero by 2050: A Roadmap for the Global Energy Sector. October 2021(4th Revision)
[2] Alana K Ayasse et al 2022. Methane remote sensing and emission quantification of offshore shallow water oil and gas platforms in the Gulf of Mexico. Environ. Res. Lett. 17 084039
[3] Methane in Africa – A high-level assessment of anthropogenic methane emissions in Africa with case studies on potential evolution and abatement. August 2022
[4] P Geurts. Gas Supply Security in Europe and Asia Beyond 2030. The Hague Centre for Strategic Studies. Nov 2023
[5] Global Energy Monitor. Coal-to-gas switching threatens energy, security, and global climate goals. Oct 2022
[6] The Role of Gas in South Africa’s Energy Transition, March 2024