/ 23 November 2018

Gas prospectors to explore three provinces

Rhino Oil & Gas Exploration South Africa
Rhino Oil & Gas Exploration South Africa, a subsidiary of Rhino Resources, which operates out of the British Virgin Islands and has a head office in Texas, is looking to explore 6?060 farms in three provinces for gas. (Behrouz Mehri/AFP)

South Africa is on the cusp of a change in its electricity supply. The country’s new energy plan, the Integrated Resource Plan 2018, announced in August, will shift the grid to a mix of wind, solar and gas as it phases out coal.

Currently, Eskom’s coal-fired plants supply more than 40 000 megawatts of capacity; 90% of all electricity. This means a vast amount of pollution, which people breathe in and which heats the world with carbon emissions.

In the new plan, wind and solar will provide 25 000MW of capacity by 2030. Wind will come from the coastal provinces, and solar will come from the Northern Cape.

As a backup, 8 000MW of gas-fired plants will be built. These can be turned on when needed, much like the diesel plants that fire up when Eskom’s coal plants fail.

But there is a problem with this plan — South Africa doesn’t have proven reserves of natural gas. The gas that is used now comes from Sasol and fields in northern Mozambique. Government’s report on gas, based on possible fracking in the Karoo Basin, concluded that, in the best-case scenario, there would be enough gas there to power two 2 000MW gas plants. Additional gas will have to be imported from abroad in tankers.

Seeing an opportunity, private companies are exploring for gas under farms and fallow land across the country. Nobody knows how much gas there is. All they know is that it is normally found under dolerite-intruded shale fields.

This month, 6 060 farms, across 10  000 hectares of KwaZulu-Natal, Mpumalanga and the Free State, are being given notice that their land is part of an exploration right application for gas. The company doing the prospecting, Rhino Oil & Gas Exploration South Africa, is headquartered in the tax haven of the British Virgin Islands.

Rhino’s application has been accepted by the Petroleum Agency South Africa. This allows for a desktop study and an aerial survey. The notice given to affected farmers reads: “The sole purpose of the work would be to indicate the presence of any possible petroleum resource which could be investigated further.”

The study and survey will look for oil, condensate, coalbed methane, helium, natural and biogenic gases.

Rhino cites the gas conundrum in the 2018 energy plan as their motivation for exploration: “Very few local sources have been identified and most gas will have to be imported.”

The company refuses to talk about what would happen if it finds gas or how that gas would be extracted. In practice, people do not own the mineral rights under their properties. So, if Rhino finds gas, it can apply to extract it.

The company has put in five more applications for other areas in the Free State, Mpumalanga, KwaZulu-Natal and Eastern Cape. Exploration rights have not been issued.

Last year, the high court in the Western Cape set aside a prospecting right application by Rhino for an area covering 15  000 farms. The decision was based on a technicality, because it found that Rhino had not consulted properly.

No court has ruled against fracking. The government has also indicated that it would not oppose fracking for gas if it was done properly.

But this could all be moot, because gas might not be needed at all. The 8 000MW in the 2018 energy plan is there as backup, as coal plants shut down in the late 2020s and renewable plants take over.

Energy planners have told the Mail & Guardian that by this point renewable technology will have advanced even further and will probably not need backup. And, if it does, battery technology will be at a point where it can do the job of gas plants, without needing that constant supply of gas. Eskom is investing in battery technology. The 2018 energy plan also has a line noting that the entire gas component can be replaced with batteries.

As with all things energy, the future is coming so quickly that what is true today may not be true in a decade.