Everyone in the energy (petroleum) industry talks about security of supply. In the case of electricity security of supply, feedstock (mainly coal) for base-load power station is locally available, whereas in the petroleum industry analysts are concerned that almost 100% of crude is imported into SA. This is seen as a major risk to the country, considering that the bulk of crude imports are from Middle East.
So when the Petroleum Agency of SA permits companies to investigate the availability of shale gas plans, this is the opportunity for SA to minimize the risk that experts talk about — of crude processed in South African refineries imported from the Middle East.
One just needs to read the Energy Security Master Plan — Liquid Fuels that was published in August 2007 to see the government’s concerns about security of supply. The energy plan supports the promotion of local production of liquid fuels and recommends a policy of limited imports. In other words, companies search for crude, shale gas, natural gas, and mine more coal, etc.
In the energy plan it is mentioned that in support of energy security and the balance of payments, there is a need for the maintenance of a certain level of production from local sources. The energy plan recommends 30% maintenance of the current production level from local sources (coal and gas). The reason 30% is recommended is because of the known production capabilities of the local industry, but I am pretty much sure if SA was Nigeria, 100% would have been recommended.
The Industrial Policy Action Plan (IPAP2) and the New Growth Path appear to support the Energy Security Master Plan, or vice versa.
SA should be serious about an integrated national plan. Hopefully, the National Planning Commission is addressing this apparent policy paralysis.
SA must carefully choose from various options on energy security supply so that there is a national consensus on what to do.