Hon Chair, hon Minister, Deputy Minister, ladies and gentlemen, before I get into the technicalities of my speech, I would like to state, for the record, that the single most important challenge South Africa faces is energy security. Without sustained energy supply all the goals encapsulated in the National Development Plan will fail. Without energy security, we can forget about quality health services, education, economic growth and job creation.
At the post-Cabinet briefing on 2 May 2013, South Africans were assured that there would be no load shedding taking place across the country this winter. South Africans were left in the dark on exactly how this would be avoided. Just two weeks ago, parts of the West Rand experienced electricity blackouts. This does not inspire confidence.
Eskom claimed that it wouldn't be able to keep the lights on should it not be able to secure a 16% year-on-year electricity tariff increase from the National Energy Regulator of South Africa, Nersa. It is here that I would like to commend the DA for its submissions to Nersa which ultimately resulted in approval of only 8%. Once again it is the DA that placed the poor first.
The Medupi project is severely delayed. The only reason for this continuous and disastrous delay is the inability of Hitachi South Africa - of which the ANC, through its investment arm Chancellor House, is a major shareholder - to deliver on its contractual obligations.
But it is becoming increasingly obvious that the Department of Energy and its entities are more concerned with the laundering of taxpayers' money through vanity projects. We would not be surprised if the money intended to ensure energy security ends up in the coffers of the ANC and its interconnected patronage network of loyal and money-hungry cadres.
Hon Minister, the reason why I am making such accusations is entirely your fault. I have asked you many parliamentary questions about projects that PetroSA are pursuing. Your replies were just returning the obfuscating answers that this information is commercially sensitive. I have written to you on two occasions requesting a meeting to discuss these issues. You completely ignored these requests. Is it then a surprise that we read in the media of the billions of rands wasted through corrupt PetroSA activities?
In one instance, we are aware that PetroSA purchased crude oil for Eskom from India. We know that the tanker transporting this crude drifted off our coast for three months before offloading, incurring an additional daily fee of US$25 000 per day. That is US$2,250 000 of wasted taxpayers' money. But your reply was that this information is commercially sensitive. It is extremely embarrassing that PetroSA can waste money like this. How can information on the expenditure of taxpayers' money in a severely regulated and government-created and supported energy monopoly be commercially sensitive?
The DA welcomes the investigation into PetroSA by the Hawks and the Public Protector. The Department of Energy and its entities have for too long evaded accountability. The lame excuse that Mr Kaizer Nyatsumba, the head of corporate affairs and shared services, gave following the Oilgate 2 scandal was:
In this business swift decision-making is required in order to prevent the loss of profitable opportunities.
I have two questions: Profitable opportunities for whom, and when last did PetroSA secure a profitable opportunity for South Africa?
It is vital that we review South Africa's 20-year energy plan. The DA does not believe that South Africa needs a nuclear build to complement its energy mix. In fact, the programme could cost the taxpayers up to R1 trillion. A project of this magnitude is completely unaffordable. We are certain that corruption through the nuclear build would dwarf that of the arms deal.
Anton Eberhard of the National Planning Commission, NPC, argued against the nuclear build programme, only for the Deputy Director-General of the Department of Energy to come out strongly here in Parliament, stating that the nuclear build programme is non-negotiable.
Instead of pursuing a nuclear build programme, what we should do in order to secure energy security in South Africa is to increase our gas footprint. We must increase our capacity to import liquefied natural gas, LNG. We need an LNG import terminal that would cater for the offload and storage of gas. We must be more proactive in negotiating access to gas deposits in Mozambique and Tanzania.
The total gas reserves, as audited in March 2012, stood at about 770 billion standard cubic feet. The total contingent gas resources are at 1 020 billion standard cubic feet. These gas basins are on our own doorstep. Block 9 of the Bredasdorp and the Mozambique basins are estimated at 50 trillion cubic feet, not to mention that Namibia has an estimated crude oil reserve of 11 billion barrels. Where is PetroSA in accessing these deposits? Instead, PetroSA is wasting billions in places like Egypt, Equatorial Guinea, Ghana and Nigeria.
We have, however, made great progress in building up our emerging renewable energy sector. It is encouraging to see the Pew Charitable Trust recognising us as a world leader within the green energy sector. We still have a long way to go, though, Minister. If this programme is to be financially sustainable in the long term, we have to draw on the commitments of developed countries to help finance the costs of renewable energy in line with their international climate change commitments.
In this regard, the DA is alarmed that the department has still not made any progress on implementing the South Asia Regional Initiative, SARI, despite signing the memorandum of understanding, MOU, to great fanfare at Cop 17. We need to urgently access the billions of rands set aside by those progressive European countries, otherwise they will simply be shifted to countries that show a greater willingness to utilise these funds effectively.
The role of the state should be to create an environment that will allow the private sector to play a greater role within the energy sector. Government cannot be the referee and the player at the same time. On the one hand, government controls the application of licences and the regulation of the sector, and on the other it wants to compete within the same sector. Do you at present have the expertise to manage such a portfolio?
We cannot even think of building the state refinery, Mtombo, when other refineries are running at capacities of around 70%. South Africa uses 500 000 barrels of crude oil per day and 195 000 barrels of coal to liquid synthetic fuel per day. As long as South Africa is importing refined product, the marginal cost of liquid fuels will be set by what it costs to import it. We must create a situation where local demand is greater than the refining capacity or create new markets outside the borders of South Africa.
PetroSA's inability to be transparent before the portfolio committee on their downstream attentions, about trying to acquire Engen's downstream portfolio, raises questions about their intentions and the functions of government and its capacities.
There is a need to commission and license all 39 tanks at Milnerton to come online and once again become economically viable. We have to operate our storage capacities to their full potential as well as repositioning the SFF for the next three decades. Free up the tanks that store the strategic stock at Saldanha Bay and transfer the function of storing to Milnerton to increase the balance of the SFF. Start hedging our strategic stockpiles with strategic partners of course, with certain guarantees in place. By doing so, we will increase the economic viability of the SFF. Diversify the Milnerton tanks to hold not only crude oil, but also refined products. Change some of the volume tanks to store bitumen.
Hon Minister, with specific attention to bitumen, you said in a parliamentary reply that bitumen does not fall within your mandate. But bitumen is a direct product from this industry. We will, once again, face a shortfall of bitumen of 20%. South African refineries produce nearly 79 million kg of bitumen annually. With a 20% shortfall, we need to import bitumen and this carries a R1 500 per ton premium on imported bitumen, placing an additional burden on the state and companies by inflating construction costs unnecessarily. Bitumen storage is a problem and, hon Minister, it is your problem. [Laughter.] [Interjections.]
In conclusion, hon Minister, your department and the entities that you are politically responsible for do not inspire confidence. Within your department and its entities there is widespread corruption, there is no transparency and accountability, and wasteful expenditure is rampant.
Hon Minister, you have no idea how to manage your portfolio, not to mention that you do not understand, or refuse to understand, how the energy sector works. I thank you. [Interjections.] [Applause.]