South Africa

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Dear Jay Naidoo, in the real world we cannot wish away petrol, diesel and gas usage

Photographer: Kyle Grillot/Bloomberg

You express the most sanctimonious rage in an attempt to emphasise the depth of your agreement with them but add little substance as to how you believe such a transition can be achieved.

Dear Jay,

Your article, “Dear former comrades, how much power and money is enough?” (Daily Maverick, 17 February), refers.

Dear former comrades, how much power and money is enough?

The difference in our outlook, Jay, is primarily a question of how a “just transition” from coal-fired electricity, and petrol/diesel-powered transport, can be achieved. Environmental groups say this can happen without exploration of fossil fuels in South Africa and without endlessly importing oil and gas for the next few decades. You express the most sanctimonious rage in an attempt to emphasise the depth of your agreement with them but add little substance as to how you believe such a transition can be done.

I would love to believe these environmental groups are right but I have struggled too long dealing with setbacks in newly built businesses to believe it can work out that way. I do not think that South Africa can simultaneously build the several gigawatts of wind and solar power every year for the next 30 years starting last year (which is Gwede Mantashe’s 2019 plan), as well as the technology to store it, but avoid the proposed gas-fired peaking plants for that period. Likewise I do not think a plan to convert all cars and trucks to electric vehicles in a short space of time as well as provide reliable charging facilities to keep them all moving will obviate our dependence on oil in the next decade or two. Worse, I don’t have any confidence we will succeed in developing hydrogen-based solutions to replace fossil jet fuel in a short space of time, let alone replace foreign currency earnings provided by coal exports on which we are currently heavily dependent to balance our foreign trading account.

I am not in any way against calling for everyone to make strenuous efforts to try their best to achieve those goals as a matter of real urgency. Quite the contrary – those efforts are a must-do. HCI will be an active part of that effort. But, Jay, here is the issue: while I brush up on my Milan Kundera you try reading Alice’s Adventures in Wonderland again. It is not going to be like that just because you and Greenpeace say it must be like that.

Realistically we need to acknowledge we cannot wish petrol, diesel and gas usage away in the transitional period. We will be importing oil and gas for a long time if we choose not to explore. You may be resigned to hoping to build South Africa by importing half a million barrels of oil a day instead of developing our own resources, but your rage will not speed up the day we stop needing to import it. It costs about R200-billion a year up to now, but going forward that will be more like R260-billion with oil trading at $90 a barrel. Its effect will inevitably show itself in weakening the rand and increasing inflation rates, which means more poverty. You can cling to the notion often peddled that we have found enough oil and gas in the world to make further exploration unnecessary but I believe South Africa makes itself unbearably vulnerable by committing to rely on imports rather than developing its own resources. Soon it will be importing more refined products rather than crude oil as we leave our refineries to rot. This will make us dependent on even more expensive imports rather than getting any closer to being carbon neutral. The R50-billion a year extra the imports will cost would pay off the entirety of the capital of Eskom’s debt in eight years if we were self-sufficient in oil production.

Jay, have a look at the “UK National Grid Live” site and see what is happening in the UK. The UK has moments where green energy provides an enormous proportion of its electricity needs, and gas is hardly more than 10% of its supply. But when you look at the average for the year you get its real dependence on gas. Gas provides about 45% of their average power. Look at a socially and economically advanced country like Norway which has a really achievable plan to be carbon neutral by 2050. Its plan after 2050 is still to export oil. It regards emissions from such exports as being the responsibility of India and China or whoever else buys it. Look at Germany and the development of the new Nord Stream gas pipeline from Russia to solve its problems moving from nuclear to gas. Look at the EU rediscussing whether gas is not perhaps “green”. South Africa is not going to overtake them in a rush to carbon neutrality any time soon.

The above said, I feel it unavoidable to respond to some of the more personal points made. Firstly, Jay, you raise a key concern over issues around consultation. We have absolutely no objection to consulting further with people affected by development irrespective of any issues playing out in court. Lambasting us without asking a single question as to what we have done to promote such a process is a little unfair but it doesn’t detract from the merits of the underlying point. Nevertheless, pretending to be the last human being watching the horror movie is a little lacking in self-reflection. I wonder, Jay, if you remember how much consulting you did before abandoning the RDP and taking up your next post as Minister of Communications less than two years after leading Cosatu through elections in 1994, promising every structure within it that the RDP was the hard-won commitment of “the Alliance” to workers that would take everyone out of their misery?

Secondly, while your idea of being “in business” may well have been limited to making “enough money” for yourself before moving up the food chain, HCI’s business is differently motivated. It doesn’t just stop when its CEO makes enough money for himself. It employs tens of thousands of people in businesses, most of which it either saved from serious trouble or took the risk of participating in from scratch. It has operated for decades in constant consultation with Sactwu structures. It is controlled by a board drawn, in the main, from people who led the union through its 40-year history. It has absolutely no connection with state capture, violence, or corruption of any kind. We make money by building businesses and running them honestly and efficiently. We reinvest money into them constantly and grow them as best we are able to do.

Lastly, my infamous reference to “poppycock” was not in any way a comment “decrying community and civic society opposition”. It was an unfortunate response to a WhatsApp read to me in a radio interview saying its author believed that a single impulse from a seismic airgun reverberated around the ocean for thousands of square kilometres for months, causing harm to whales, and asking for my comment thereon. Irrespective of the fact that I think it to be wholly untrue, I accept I should have offered a more dignified response if there is to be a debate around oil and gas exploration rather than the current series of personal attacks on individuals and corporations.

I suppose our point of view will fall on deaf ears, but I do wonder if we would not make more progress by having a discussion with each other on the merits of exploring for hydrocarbons rather than you ranting from your pulpit and trying to rebrand us as vulgar, money-obsessed deviants. DM

Johnny Copelyn is the former general secretary of the Southern African Clothing and Textile Workers’ Union (Sactwu) and is the chief executive officer of Hosken Consolidated Investments, HCI.

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All Comments 15

    • PhD in macro economics?
      Marginal personal rates to 90% above R500K per year also a good idea.
      Let’s finish the job of stuffing up the economy that the ANC has done so well ……

  • Yes Johnny, but what if oil and gas usage is destroying the real world. Have you not read about fires, floods, weather pattern changes causing famine and starvation. You can’t have it both ways. Have your oil and starve to death or find other ways. The problem is if you added the cost of environmental damage to oil, nobody could afford it

    • Exactly. We don’t need more oil and gas along with endless navel gazing (God knows there’s enough of that). We need a transition before changing climate, storms, droughts become unbearable.

      • You do realise he is actually advocating a transition right? If they don’t do it this way then stage 8 Loadshedding will become a daily thing. You need constant power, not just power when the sun is out. And also who does the price of petrol affect the most? THE POOR.

        So yeah transition, we all have to for our own survival, but that’s a long plan, in the meantime we can make small steps towards that and improve our people’s quality of living.

  • Dear Johnny,
    You need to take it on the chin. All HCI expertise and business building efforts were ploughed into further developing an industry under severe global pressure for its part in global climate destruction. Where was the risk analysis/mitigation in all of this. The resistance experienced could not have been unexpected. No one is suggesting for a minute that a switch to renewables and a less carbon intense future will be an easy road. Rather its the necessary road. Why not take HCI in the other direction? Is it possibly because the short term benefits of gas and oil outweigh the short term benefits of oil & gas? Do the right thing and develop long term growth and sustainability.

  • OK Mr Copelyn, what if we allow the oil and gas rigs but require that the investors not shield behind the corporate limited liability and lodge unlimited liability for environmental damage?

    Look at Shell’s track record in the relatively shallow and easy west African waters. Now figure deep water operations off the Wild Coast in waters that break bulk carriers in two.

    Please do not say you will comply with regulations when we all know the regulations only go so far and certainly not to what a professional engineer would conclude on a risk and impact assessment. Regulatory compliance is vastly easier than what a risk & impact assessment would recommend.

    After you ask you bankers and insurers what their risk premiums will be for unlimited liability, let us know how that feasibility study’s numbers look like.

    And then for the second part : we hte poublic own those oild and gas resources. We’d pay a handling fee for extraction and capture the profits in a soveriegn wealth fund in the Norwegian fashion. Still want to do the project?

  • Right, this is about a transition. And South Africa will, over the next few decades, still burn far too much coal, oil and gas than is good for the planet. Our coal exports will wane, but others will burn that coal to meet their energy needs. Our oil imports must wane as we move to much more energy-efficient electrical vehicles. I disagree with the argument that we must look for our own oil and gas in that transition. We do not have any easy and thus cheap to extract fossil fuels. Others still do. Our competitive advantage in this transition are our superb renewable resources. The race to supply hydrogen into the big oil importing nations is on. That’s where all our efforts should point – easy, on land renewables, not difficult last century fossil fuels in stormy seas!

  • So, Johnny, what is implicit in your argument is that your selfless public-spirited partners such as Royal Dutch Shell will be creating a new oil market in South Africa that trades below the global oil market prices to stop the worst ravages of inflation on poor South Africans? Do I understand you correctly? Can we get some that stuff that you’re smoking? What’s the strain called? Poppycock?

  • “HCI’s business is differently motivated. It doesn’t just stop when its CEO makes enough money for himself.” – this is laughable when the CEO is paying himself nearly R14m per year as reflected in HCI’s 2021 financial statements. Suppose it’s no surprise you’d be prepared to conjure up a piece of garbage like this to protect that kind of income.

  • Quite right. As much energy independence as possible must come first. Look at the problems Europe now has. . Coal must be used and gas persued until alternatives can replace them.

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