While the extent of South Africa’s shale gas reserves remains unproven, the development of a local natural gas market remains impeded by an “old” energy mindset that favours economies of scale through the construction of large power stations, rather than through the development of nationally distributed modular power facilities, the Gas Africa conference heard on Tuesday.
South African Oil & Gas Alliance (Salgoa) CEO Ebrahim Takolia told delegates that the potential of a South African natural gas industry remained further fettered by national policies that favoured the State control of energy assets rather than funding and management structures featuring public–private partnerships (PPPs) and a robust energy equity market.
“South Africa should look at a more distributed gas industry and move away from the old mindset of economies of scale and large power stations… we don’t need [this].
“In terms of energy policy, we need more PPPs and better governance,” he stated.
While the country’s oil and gas potential remained unverified, recent estimates put possible natural gas reserves at 60-trillion cubic feet and potential offshore oil reserves at nine-billion barrels – energy reserves capable of fulfilling South Africa’s oil and gas needs for over 400 years, based on current consumption.
Lobbying for the development of a local gas industry and the exploration of the country’s possible gas assets, Salgoa had long held that the country should first increase the size and distribution network of the gas market – which would initially be supplied by imported gas – before this was replaced with locally sourced gas.
According to Takolia, the best-case scenario for the development of a standalone oil and gas industry outlined a ten-year horizon before offshore oil and gas reserves could be exploited on a commercial scale, while the viable development of an onshore oil and gas industry would likely take even longer.
Natural gas could, thus, be seen as the most favourable intermediate source of energy before challenges around the production and storage of renewable energy were addressed over the longer term.
“Gas is seen as an intermediate carbon product before a lower carbon-reliant energy future [develops]. We can expect a ‘gas age’ of between 30 and 40 years before we resolve the renewable-energy storage issues and enter an even lower-carbon future.
“The role of natural gas is likely to continue to expand and its relative importance is likely to increase even further when greenhouse-gas emissions are constrained. New technologies continue to make it more attractive as a source of energy,” he commented.