SA’s policy and regulatory framework was highlighted as the main obstacle delaying the implementation of solutions to the gas cliff at the recent portfolio committee on energy and electricity sitting.
As the country faces the looming depletion of its primary natural gas supply by mid-2028, key industry players and MPs voiced frustration over the country’s slow and fragmented policy response, which many warn is jeopardising efforts to avert a potentially devastating energy shortfall.
Despite the clear urgency, fragmented and ineffective policies are stalling critical investments and infrastructure development, the industry stakeholders told MPs in a sitting on Wednesday.
Craig Morkel, head of the gas economy leadership team for the SA Oil and Gas Alliance (SAOGA), said there were critical shortcomings in current legislation.
“We do not believe that the present Upstream Petroleum Resources Development Act (UPRDA) is effective to promote bankability because it ignores the very issues raised by investors and other industry players.”
He also pointed to environmental regulations as a significant barrier to investment: “Section 43 of the National Environmental Management Act (NEMA) makes it way too easy for a work stoppage to be issued by someone simply sending an email to object. This undermines investor confidence every time a project is brought to a halt.”
The gas cliff refers to the anticipated sharp decline in gas supply from Mozambique’s Pande and Temane fields, which currently provide more than 85% of SA’s natural gas. Sasol, the country’s largest gas processor, has warned that volumes will decline steeply by 2027, with supply potentially ceasing by mid-2028.
Sasol has announced a short-term solution involving redirecting methane-rich gas (coal-to-gas), produced at its Secunda operations, to maintain gas supplies from mid-2028 to mid-2030. However, industry players acknowledge that this only buys the country time to make a decision about its options.
This impending shortage threatens industries that employ about 75,000 people and contribute about R600bn annually to the SA economy. The consensus among stakeholders is clear — immediate and co-ordinated action is required to avoid severe economic disruption.
Public-private partnerships and clear fiscal and guarantee frameworks were also identified as critical enablers to attract investment, with speakers acknowledging the need to develop an appropriate risk-sharing model for public-private partnerships.
While liquefied natural gas (LNG) imports from Mozambique’s Maputo and Tamane terminals are vital, short-term solutions, domestic and regional gas development, particularly on the West Coast, is crucial for long-term energy security and economic growth.
Despite agreement on the urgency, key areas of divergence highlight the complexity of addressing the gas cliff. The Richards Bay LNG terminal, for instance, was hailed by some as a certainty — a project that “will happen”. Yet others challenged its strategic value, arguing it is merely a regional intervention suited to KwaZulu-Natal and not a comprehensive national response to the impending gas supply crisis.
Another point of concern is the ongoing tension between protecting the environment and promoting economic development. Some stakeholders argued that regulators were being too cautious, which was stopping much-needed domestic gas projects from moving forward.
Mineral and petroleum resources minister Gwede Mantashe said the debate over the gas cliff remained very fragmented and all over the place, without any effort to develop a coherent strategy to deal with the gas cliff.
“That’s my view. I’m expressing a view here. That’s why the emphasis will be on gas imports without looking into our own deposits and exploitation thereof.”
Mantashe referred to the number of years that the courts have been directing environmental authorities to create regulations that would allow lifting the ban on shale gas exploration in the country.
“Those regulations are not coming through, because we have not succeeded in creating a good balance between economics and ecology,” said Mantashe.
“We still work as economics versus ecology or ecology versus economics. We have to overcome that. That's why we depend on imported gas and not touch ours, because our ecology is used as a policeman rather than a balancing act or enforcing balanced development.”
Mantashe speaks on environmental concerns are often treated as roadblocks rather than integrated into a balanced development approach, hindering the country's ability to tap into its own shale gas resources and unlock its long-term energy security.
“There’s no drive for domestic production of gas at all. I have experienced it. I end up in court all the time. I’m still waiting for the outcome of the Total Energies court case now. It’s not out yet.”
Shale gas exploration in the Karoo Basin has been a contentious issue for years. In response to growing environmental concerns — especially about water contamination and ecosystem damage — the government imposed a moratorium on hydraulic fracturing (fracking) in the Karoo, halting new exploration applications until comprehensive environmental regulations could be established.
This pause was reinforced when, in 2017, the courts invalidated existing shale gas regulations following legal challenges from environmental and agricultural groups. Since then, the department of forestry, fisheries and the environment has been tasked with drafting new regulations to lift the moratorium.
However, progress has been slow due to the complex challenge of balancing SA’s urgent need for economic growth and energy security with the imperative to protect fragile ecosystems.
Mantashe and other officials have expressed their commitment to unlocking the country’s shale gas potential, including through international partnerships and the creation of the SA National Petroleum Company (SANPC) to co-ordinate oil and gas development.
Yet, the ongoing delays in finalising the regulatory framework mean that shale gas exploration remains effectively on hold, forcing SA to continue relying heavily on imported gas amid growing energy demands and the looming gas cliff.
“I’m one of the few people who believe that economic growth in SA heavily relies on local trajectory, particularly depending on oil and gas exploitation and use,” said Mantashe. “I hold this view, and I would welcome researchers and economists to challenge my perspective.”
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