18 June 2008
The gas fields off the West Coast must be developed if the country is to solve the energy problems strangling economic growth, says the Cape Town Regional Chamber of Commerce and Industry.
Chamber president Gerald Wolman said the gas, which was discovered nearly a decade ago, could be a primary fuel for industry and be used to generate electricity to ease the current crisis.
"We know the gas is there but five years ago the discovering firm, Forest Oil, stopped all work on the Ibubesi gas field because there was no market for gas and because of uncertainties on mineral royalties and tax issues.
"We now have the market but the oil and gas industry will not return until the royalties and tax issues have been resolved," Wolman said.
He said combined cycle gas power stations were efficient and could be built quickly.
"The big advantage is that the fuel is piped in and one does not need the vast infrastructure of railway lines and trucks to bring in the coal and take away the ash. They are also environmentally acceptable."
Five years ago the economist who did the viability study for Forest Oil told the chamber: "If Eskom can be pushed aside from a position of control to a position of observation, a gas plant on the West Coast can be on line by mid-2006. If not the Western Cape will suffer the consequences."
At the time Eskom admitted that the country's energy capacity could be depleted by 2007 but was looking at more peaking power, alternative energy and nuclear power as the solution, the chamber said. The government had also rejected Eskom's application to build new base-load power stations.
"We now have a situation where a large percentage of the country's supply of diesel is being burned in peaking power stations, by trucks transporting coal for Eskom and in standby generators, all at enormous cost to the economy.
"And while this is happening, the gas field which could produce electricity and provide a primary fuel for industry is unexploited."
Wolman called on the government to urgently look at the development of the gas discoveries and remove all obstacles to exploitation of the resource.
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