Total has broadcast an immense gas-condensate discovery at its offshore Brulpadda 1AX prospect rig operation in the Outeniqua Basin, due south of Plettenberg Bay.
The French global oil conglomerate’s announcement came in time for President Cyril Ramaphosa’s State of the Nation address, just before national power cuts, and has diverted interest from the Xolobeni mining case and the rights of people to decide what happens to their land. This announcement came with words like “growth prospects”, “game-changer” and “exploration boon”.
This deep-sea find has taken Total five years since a “chaotic combination of currents, waves and winds” in 2014 wreaked mechanical havoc on its rig, stopping operations. Total has now contracted a rig designed for bad weather and currents, like our Agulhas Current.
They struck high quality gas condensate (fundamentally a “wet gas”, gas that contains a small amount of oil) at a depth of 3.6km and there’s talk of a billion barrel gas yield. This summer was calm but Cape summers aren’t always this tranquil.
Total has warned that extraction in this region will be costly and is conditional on a 3D seismic survey application, plus an extra four exploration wells according to this licence. The well will cost the country a minimum of R42-billion since there is a favourable 100% “uplift” capital expenditure provision for oil corporations that make discoveries in South Africa.
In other words, the taxpayer will pay for this development.
A major benefit for South Africa will be Brulpadda’s fiscal role in generating tax and other revenue for the government. Total and its Brulpadda partners will pay the regular 28% corporate tax on all taxable income from the find and a royalty of about 5% on the “transfer” of all oil/gas, which includes the disposal or consumption thereof.
The most optimistic estimates are a yield of $1-trillion for Total and its partners.
Whether these financial gains are worth the environmental costs of offshore drilling has also been largely omitted from the debate. All South Africans should be asking the essential question: Is it worth it?
The gas may only see production in 2027. What is the logic of “transitioning” to gas after an eight-year delay?
The Intergovernmental Panel on Climate Change has warned that all nations must stop burning fossil fuels by 2030 to avoid catastrophic warming. By 2027 climate change will be a fully fledged reality and Brulpadda will become a stranded asset. Further development of gas infrastructure is incompatible with the Paris agreement target.
So the question remains: Is the Ramaphosa government genuinely committed to cut all carbon emissions within 30 years or are they paying lip service to it?
Ramaphosa described the discovery as a “catalytic find”. Chosen words that beg analysis. A catalyst is an agent that speeds up a reaction between two forces but remains unaffected by the chemistry itself. History shows that oil exploitation facilitates displacement, both physical and economic, of people in the locale.
A 180km undersea pipeline will need to be constructed and laid to link Brulpadda to Mossel Bay. Apparently 80km exists so another 100km will have to be laid in a challenging sea. We will hear about the “dilution of effects in seawater”, of the severity of the effect of the hydrocarbons, drilling wastes and cuttings, their toxicity, radioactivity and contamination in relation to the exploration activities, plus the negative effects of the continuous leaks in pipelines.
These are toxic substances that cannot be broken down by environmental processes, are mostly water-insoluble and can bioaccumulate up the food chain. They create potential harm to the health and environmental well-being that is stipulated in section 24 of the Constitution.
The big question no one is asking is: What is the actual cost of failure, of an oil spill? What material improvement in fundamental living conditions will South Africans experience as a result of the discovery?
This gas could either be converted into petrol at PetroSA’s gas-to-fuel refinery in Mossel Bay or it could be converted into electricity. There’s false hope of reduced petrol prices transforming the economy. The chairperson of the Central Energy Fund, Luvuyo Makasi, believes the find will help “fuel an energy security of the county and it will be a mechanism to help counter the country’s ever-rising fuel price”.
Does anyone really believe Total will sell that gas at a discount to the South African consumer? The gas will be sold at the prevailing price on global markets and there is a single market-clearing price for gas of a given quality, significantly influenced by crude oil pricing.
It’ll be a decade and some radical, gas-centric infrastructural developments before Brulpadda has any effect on our electrical grid.
Regarding job creation, let’s be frank: privatising the ocean commons creates super-profits for the polluters and remediation of that pollution will fall on the poor who rely on ocean resources.
If we want to talk seriously about energy security and significant economic growth, we need to talk about energy diversification. There are fast-developing technologies and South Africa must unlock ingenuity in fields that compete with oil and gas to secure renewable energy resources.
The truth is that venture capital is pouring into alternative energy and can reduce our dependency on fossil fuels with the aim of carbon neutrality by 2050. All it takes is the political will, or the voice of the people.
Janet Solomon is the director of Vanishing Present Productions in Durban. Read about her movie Becoming Visible at becomingvisible.africa and her Oceans Not Oil campaign at oceansnotoil.org