Gas Crisis Ahead: Governments Master Plan Offers No Real Solution

The Gas Master Plan that Minister of Mineral Resources and Energy Gwede Mantashe published last week, offers no solution for the impending gas shortage that is expected to hit the country in 2026.

It seems that the department does not think the crisis is serious enough.

The plan considers the complete gas topology ranging from demand, supply, importation, infrastructure and distribution networks.

It recognises the critical role of natural gas in the countrys economy and anticipates the infrastructure required for the delivery of gas at a point of consumption based on a least-cost model.

South Africa currently gets its natural gas flow from Sasol, which produces it from the Pande and Temane fields in southern Mozambique. But these fields have now reached the end of their life and alternative supply of gas will only be available around the second half of 2027.

Busiswe Mavuso, CEO of Business Leadership South Africa (BLSA), says she has warned before about the gas cliff the country will face when the supply of gas to industrial users ceases in 2026.

This is a crisis for businesses that collectively employ 70 000 people and generate R500 billion a year for the economy.

She says it is a crisis that can only be avoided with a coordinated and rapid plan between business and government. Therefore you might have thought that the draft Gas Master Plan would clearly address the looming crisis and table a credible strategy to avoid it.

However, while it contains many laudable principles and objectives, it simply does not address the major issue facing the economy, she points out.

The plan has security of supply as a core objective and models the impending day zero in its analysis of existing gas sources, but then does not set out a clear plan to deal with it.

It notes it is quite urgent to engage with regional gas producers to unlock additional supply, but does not seriously engage with whether there is enough that can be tapped in time to avoid day zero, nor with how it could be accessed and brought to the sites that need it.

Mavuso says this is a major missed opportunity.

A vision for gas supply and development for the country must start with the most urgent needs and then plan out how the system should evolve from there.

Of course, it should not be entirely short-term in focus. It must set out a comprehensive vision.

In some respects, the plans long-term vision is solid, but on the most urgent priorities, it simply sidesteps them.

She says industrial gas users and government have been engaging on what can be done to avoid day zero and the masterplan would have been a good opportunity to set out a clear plan to coordinate the efforts of government and industry.

Mavuso says the fact that it does not, leave one feeling that the department is simply not taking the looming crisis seriously enough.

It is a draft and perhaps it can be amended to address this weakness, but the gas cliff is just 24 months away, leaving barely any time to develop the kind of projects that will be needed to avoid it.

The Gas Master Plan follows the draft Integrated Resources Plan (IRP) published early this year, a key document to plan the future energy system, which was also wide off the mark.

Mavuso says that plan failed to apply the least-cost principle, spuriously elevating the price of renewable energy relative to fossil fuels.

Business commented extensively on that draft by the deadline in March and we are waiting to see how the department will respond in the next version.

She says it is very important that the department takes the public comments received seriously.

Given how significant the Gas Master Plan and the IRP are for the economy, businesss voice is important. Because these two key draft documents seem to ignore considerable input already given, we are naturally all concerned that the next iterations will similarly fail to deliver to the needs of the economy.

Mavuso warns that this lack of responsiveness to input is unfortunately an increasing feature of how government is delivering on the constitutional requirement to consult in the process of policy development.

The department must demonstrate it is committed to getting policy right and willing to engage with those affected and take their input seriously. The Gas Master Plan is an opportunity to do so.

Jaco Human, CEO of the Industrial Gas Users Association of Southern Africa, told EWN that the association relayed the importance of the master plan addressing the critical issues around the Day Zero for gas. But the published draft does not addre