SA lawyers ready to block Shell over Wild Coast gas exploration

Right! We have more facts than rhetoric, per kind favour of one of our old-school veteran investigative journalists with a track record of corruption busting and high-end exposés in his now defunct magazine, Noseweek. This detailed, fact-filled report by lawyer/journalist Martin Welz on the activist coalition’s legal argument helps elevate the debate beyond mere pictures of dying dolphins and whales with absolutely no verifiable connection to any seismic survey anywhere and passionate placard-bearing nature lovers fulminating on Wild Coast beaches. BizNews has carried articles by seismic survey supporters, Shell, and its fierce antagonists. Finally, matters are coming to a head. Where else but in our courts? Welz gives us a reprise of the activists’ well-considered legal arguments, which go well beyond the lengthy seismic survey and question the fundamental approach to natural minerals and energy use, plus existing global climate change agreements. Well worth a read. – Chris Bateman

By Martin Welz*

“Interested and affected parties” represented by the Oceans Not Oil coalition are about to serve court papers on the Minister and the Director General of Mineral Resources, the Petroleum Agency South Africa, and the Minister of Forestry, Fisheries and Environment to order the suspension of Shell’s seismic survey of the ocean floor along the Wild Coast.

The controversial seismic survey in search of undersea oil and/or gas is scheduled to commence tomorrow, Wednesday.

This emerges from a statement by the activist coalition published over the weekend on a website promoting a petition against the controversial seismic survey. By Monday midday, 315,000 people had already signed the petition. This was in addition to several protest marches along the coast and a threatened boycott of Shell petrol stations.

Oceans Not Oil is a coalition of 30 civic organisations. Among the better known ones are the African Conservation Trust, Animal Survival International, the Centre for Environmental Rights, Coastwatch, Conservancies KZN, Earth Life Africa, Eastern Cape Environmental Network, FrackFree SA Youth, groundWork, the Legal Resources Centre, Masifundise Development Trust, S A Youth Climate Change Coalition, Sustaining the Wild Coast, Vaal Environmental Justice Alliance, and Wildlands.

The statement contains a summary of the facts and arguments likely to be used to persuade the government – or, if that fails, the courts – that approval of Shell’s application to scan the seabed for oil and gas reserves is not only damaging to marine life and the environment. The continued search for oil and gas as a potential energy source is also contrary to the government’s commitments for meeting climate change targets and deadlines. And, on the now available evidence, from an economic and financial point of view, it is irrational, unsustainable and not in the public interest.

The government’s approval of Shell’s seismic survey and its commitment to gas as a ‘transition’ source of energy for electricity generation, they say, foreshadows just another  – new – Eskom disaster and a mountain of public debt that will likely still be owing decades after the gas plants have become obsolete.

The statement begins with a reference to a recently published article headlined Global Liquified Natural Gas (LNG) industry reeling as its image as a climate solution shifts to Climate Problem”’. See: https://www.desmog.com/2021/06/24/global-lng-natural-gas-industry-reputation-climate-problem-report/

Some of the facts, figures and arguments they list:

The unabated use of fossil gas is incompatible with achieving the climate-neutrality objective by 2050. Its use will have to be reduced by over 70% of current use in 2021. Studies show further development of gas infrastructure is incompatible with the Intergovernmental Panel on Climate Change (IPPC) target of keeping global increases in temperature below 2°C.

South Africa has already warmed at around twice the rate of global warming.

The state’s promises of a 34% greenhouse gas reduction by 2020; to meet a 42% ‘business as usual’ emission reduction trajectory by 2025; and to have transitioned from coal to renewables by 2030 “are hollow and have not materialised”.

The International Energy Agency (IEA) has concluded that if our planet’s systems are to remain within the two-degree limit, no more than one-third of proven reserves of fossil fuels can be consumed prior to 2050.

In a May 2021 report detailing the pathway to net-zero carbon emissions by 2050, the International Energy Agency concluded that expanding fossil fuel exploration and use must end.

“No new natural gas fields are needed beyond those already under development,” the agency stated. “Also not needed are many of the natural gas (LNG) liquefaction facilities currently under construction or at the planning stage.” 

Therefore two-thirds of proven reserves of oil, coal, and natural gas – including reserves that corporations have paid billions of dollars for – must be left in the ground to stay within the global carbon budget.

The coalition’s weekend statement goes on to note: “Neither international law nor domestic law has ever mandated the stranding of assets of that magnitude and needs consideration before the public purse is involved in massive infrastructural build that will take until 2035 to complete (and is only expected to become profitable at best by 2050).”

It adds: “Gas projects are 30-year-plus projects, customers are unwilling to commit to contracts longer than 10 years and a retreat of bankers from financing new fossil fuel projects has begun. [Nedbank has said it will no longer finance such projects; Discovery Life has dissociated itself from Shell.]

New LNG and gas projects have considerable risks of being ‘stranded’ (obsolete) assets prior to the operating life being complete.

The memorandum on the Objects of the Gas Amendment Bill states that the bill “will not have any organisational and personnel implications for the department and does not create further financial liabilities to the state”. 

That, say the authors of the coalition statement, cannot be true.

The newly created National Petroleum Company (a merger from iGas, PetroSA and the Strategic Fuel Fund) will play a central role in the proposed Gas Master Plan, yet none of the component SOEs are, as is, financially viable.

While still in its development stage, iGas’ tax losses are already in the millions and its viability has been brought into question in the May 2021 report of the Parliamentary portfolio committee.

PetroSAs R7.4bn Abandonment Liability (provision) needs to be paid by February 2024 and its year-on-year financial losses (R20+ billion) and current debt trajectory are not sustainable.

The Strategic Fuel Fund (SFF) has reported a 61% drop in revenue (2019) and faces the potential of over R2bn in losses from court action.

What is the logic of developing gas as a transition energy if it has to be locked in until past 2070 for financial reasons?

Finally it concludes: “Facilitating gas infrastructure development and investment is not an insurance policy, but rather an unjust and high-stakes gamble.

To read the full statement and source references, go to chng.it/mSBNN6n6

  • Stellenbosch and Pretoria University educated Martin Welz (76) has dedicated his life to exposing malfeasance and abuse by the rich and powerful, occasionally ending up in court as a result of his disclosures. After decades of producing award-winning exposé‘s for major newspapers, Welz founded Noseweek in June 1993. 

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