PASA Regulatory Concerns
In December 2021, the Department of Mineral Resources and Energy (DMRE) published the Gas Master Plan Basecase Report for comment (the Basecase Report). It presents as a comprehensive resource of rights and licences that had been issued under the auspices of the Petroleum Agency of South Africa (PASA) for oil and gas exploration and production to date.
The CER attempted to make contact with the 7 companies that hold rights for onshore gas activities, but 5 out of 7 have no public profile, do not respond to correspondence and are simply not contactable based on a desktop search. A request to PASA for their contact details went unanswered, despite multiple follow-ups.
While 2 holders of gas rights do have public profiles, CER was not able to access copies of any of the rights granted on holders’ websites, where such websites exist. That gas rights are not published and accessible is a matter of considerable concern given the important role that transparency and access to environmental information play in a constitutional democracy.
Onshore gas production in South Africa is in its infancy and the regulation thereof is under development, with a range of proposed new law and law reform processes underway. As an industry with significant environmental, water and climate impacts in other jurisdictions, it is imperative that any development of a South African gas industry takes place in a transparent manner, with meaningful consultation with all stakeholders, with significant investment in state capacity to properly assess licence applications and significant investment in state capacity to monitor and enforce compliance with environmental licences and laws.
In light of the potentially severe and pervasive impacts associated with gas production, it is particularly important that any South African gas and petroleum operations are regulated by an appropriate and comprehensive regulatory regime that is implemented, monitored and enforced.
The Minister responsible for mineral resources and energy may designate environmental mineral resource inspectors (EMRIs – recently renamed environmental mineral and petroleum inspectors (EMPIs)). CER is concerned that there must be enough EMPIs designated to ensure that gas companies comply with environmental laws and licences and that enforcement action is taken when they do not. CER is highly concerned that as at 2023, of the 94 EMPIs, all are designated for mining – there are no EMPIs designated for the compliance monitoring and enforcement of oil and gas activities – on or offshore.
It is well-understood that gas exploration and production have the potential both to cause greenhouse gas emissions (primarily methane) and contamination of groundwater as well as intensive water use, depending on the technologies employed. In particular, hydraulic fracturing or fracking can lead to methane leaks, contamination of groundwater and air pollution, and needs close attention.
CER established that Climate Change Impact Assessments (CCIAs) have not been required of applicants who have been awarded rights for onshore exploration and production rights. Accordingly, CCIAs have not been conducted by companies that hold rights to explore for and produce gas.
In light of these, and other concerns, on 29 September 2022 the CER wrote to the Petroleum Agency of South Africa seeking engagement with PASA on its role in relation to the regulation of upstream petroleum and gas activities. PASA replied on 28 April 2023, essentially dismissing the concerns and questions raised by CER. CER wrote to PASA again on 29 June 2023 asking PASA to reconsider its stance and to meaningfully engage with the concerns raised in its letter dated 29 September 2022.
Other than an acknowledgement of receipt from PASA on 29 June 2023, CER has not received a further response from PASA, despite follow-up. This is highly unfortunate from the agency tasked to manage one of the most environmentally egregious industries in an era of ecological threat.