Local "oil giants" are mainly pigmies

EVERY time Spigot sees local subsidiaries of international oil companies described in the media as "Giants" ( Oil giant Shell this week ....Oil giant BP .. etc) he despairs at the blind ignorance and lazyness of local scribes. The fact is that the only fuel company operating in South Africa that deserves this cliche is Sasol. The rest are simply local subsidiaries of their, admittedly large, parent companies. Does this sloppiness matter? Well, yes it does, because by persisting in describing Shell SA, BPSA, Total SA and the rest as "Giants," journalists are perpetuating a myth. The local subsidiaries of international oil companies are just that -- subsidiaries. In most cases they are limited liability companies which, as the word "limited" implies, sink or swim on their own. Shell Zimbabwe Limited can hardly be described as a giant. The same applies to local oil companies like Shell and BP. The trouble is -- and it is worse outside South Africa in sub Saharan Africa -- the giant myth poisons perceptions of oil company staff, the public and the governments who continue to think that all oil companies, regardless of the local realities, have more money than God. One obvious result is the self-defeating wage demands of unionised workers of these companies which can only result in loss of jobs through outsourcing and mechanisation.

Bouquets and brickbats for BP

THOSE brave souls at BP have reportedly invested some R20-million to launch a new portable payment terminal at 450 of its petrol stations. Called "Swipa" (not eSwipa?) the terminals, accept any debit cards, and -- because this is South Africa -- drivers don't even have to get out of their cars to pay. No doubt the system has been introduced to reduce the risk of cash-in-transit robberies that are fast becoming a national sport. Not a great reduction, it must be said, since the convenience stores attached to service stations often make more money than the pumps, but even so, every little helps. Spigot does wonder why there has been a howl of protest from the Fuel Retailers' Association. Didn't BP first check with them how it would go down? Allegations are that the BP Swipa system is illegal in terms of the Department of Minerals and Energy (DME) regulations . Didn't they talk to the DME before the launch? Not that Spigot is complaining. BP deserves a big bouquet for Swipa. It is just a pity that only salesmen seem to have been in on the deal. Isn't this precisely why there are corporate affairs departments?

Greenies form new pressure group

HAVING SCREAMED for years about the dangers of green house gases (mainly water vapour) specifically carbon dioxide, the Greenies have been hoist with their own petard by the uncomfortable (for them) fact that only nuclear energy has a hope in hell of producing power without having a " carbon footprint" the size of a Yeti's size fourteen clodhoppers. No matter. A local bunch have now formed an anti-nuclear group comprising 14 non-governmental organisation and community groups ( plus several individuals). Wittily calling themselves CANE ( Coalition against nuclear energy) these enthusiasts plan to oppose the expansion of the local nuclear energy industry. No doubt they are busily insinuating themselves into the good books of the local media , adding to the dial-a-quote sources so beloved of lazy scribes. Spigot wonders if anyone else has noticed that these people, while claiming to be "progressive and left wing" if not revolutionary, are actually the most conservative of reactionaries. After all, they do not want change. Far from it, they want everything to stay the same and preferably march backwards. Backwards for everyone else, that is. They will still be able to fly everywhere to conferences. They will be able to stay in leafy suburbs with all mod cons. The rest of us, according to them, will have to change our lifestyles. All aspirations to a better standard of living are condemned by these latter-day Puritans.

Sasol expands its gas lines

ANY chance that Sasol might, in the national interest, relax its stranglehold on the former petroleum products line between Durban and the Reef and allow it to revert to its original purpose, appear slimmer than ever. Grown fat over the years on its original huge injection of taxpayers' money, the Sasol juggernaut has announced expansions to its gas line in the industrial suburb of Clairwood in Durban, having snaffled another client in the area. It also has plans to extend its piped gas supply infrastructure on the Reef. It has to apply to the National Energy Regulator (Nersa) for permissions, of course, never mind that the local Durban municipality is the only real interested party. Layers of bureaucracy are the curse of the modern age. Spigot almost feels sorry for Sasol. It's a fleeting feeling. It's gone now.

Nersa -v- Cabinet, round 2?

THE National Energy Regulator (Nersa) seems set on another collision course with Government -- this time over electricity prices. Having only just covered up the cracks that opened during the iPayipi affair, when Cabinet bluntly overrode Nersa's encouragement of a private pipeline proposal in favour of Transnet's, Nersa has now been rapped over the knuckles by Minister Alec Erwin over its insistence that it alone has the right to determine Eskom's electricity prices. Eskom wants to bump up prices to cover the costs of the massive new power generation the country desperately needs. Erwin says Eskom is right, regardless of what Nersa may determine as a fair increase. All goes to show that economics trumps pseudo-Marxist reasoning, every time. Not bad Alec, you old communist! Still a member of the party, are you?

New pipeline insights

Now here is something Spigot did not think of. Courtesy of a reader: " Who do you think really backs the Petroline consortium? Don't be suprised if it is Sasol. Let the Maputo line be built and it is a natural outlet for Sasol's excess production from any new plant. The fact that they export fuel north when the inland market is short beggars belief! Gautengers will continue to pay too much for their fuel based on the current pricing mechanism. If I was (Premier) Shilowa I would be hopping bloody mad."

The other Y2K - Climate Change

FUTURE HISTORIANS will recall with amusement the millenarian panic of Y2K (year 2000). Remember, all the computer Geeks of the early computer revolution came out of retirement crying, "Woe! Woe! The world will come to an end at the stroke of midnight on December 2000." The idea was that all computers not adequately reprogrammed would crash, airplanes would fall out of the sky, bank balances would disappear into the void etc etc. Unless (and here the boondoggle) businesses immediately hired all the aforementioned Geeks. Only they had the knowledge to fix things. And so it came to pass that nothing whatever happened. Geeks got richer, of course, but that was about it. Now, the new boondoggle is Climate Change. Again the cries of "Woe!" are echoing in the rafters. Again, thousands have climbed on the bandwagon. Latest passengers are non other than Business Unity South Africa (BUSA). (If ever there was an oxymoron, this is it). BUSA has issued a circular calling desperately to its members for interest in the Government's National Committee on Climate Change (NCCC). Apparently, the terms of reference for the NCCC are under review and BUSA needs to comment. "It should be noted that BUSA is entitled to five representatives of which only one seems to be attending", the BUSA circular wails. What an opportunity! Visit the UN in New York -- all expenses paid! Come on chaps, why the lack of interest? Don't you know that humans are warming the planet by their selfish attempts to improve their lot? Don't you want to sit on the side of the angels? Come on now! What's this got to do with the oil industry? Well, who are the main targeted bad guys in all this human-induced climate change? Why, the oil industry, of course!

Musings on Sasol and Transnet pipelines

ONE of Spigot's readers has made the assertion that if Transnet Pipelines ( formerly Petronet) had not made a deal to reverse the flow of one of their Durban-to-Johannesburg pipelines so that instead of carrying finished products ( diesel, jetfuel and petrol) from Durban to the Reef, it now carries only gas from Sasol to various industries in Natal, then we wouldn't be in the shtuck we are in now, ie unable next year to supply our main industrial area without huge effort using road tankers. Of course, nothing here is exactly "news". But it does raise some interesting " what ifs". For example, what if the new Transnet pipeline runs into difficulties and cannot come on stream in time for the World Cup? What if there are not enough road tankers and road tanker drivers to take up the slack? What if the Railways cannot get their act together fast enough to supply an alternative (and safer) method of transport? And here's the real question; Will Sasol then, in the national interest, release its stranglehold and allow the existing gas line to revert once more to its original purpose of transporting fuels? Will Sasol gas customers in Durban scream blue murder? Just wondering. I mean, Sasol has lotsamoney and it is always claiming to be a national asset. How about it acting like one.

Sasol threatens the Waterberg

SO, Sasol is going to build a new coal to liquids fuel plant, either in the Waterberg or in the Free State somewhere. Stand by for the usual screech of horror from the Greenies. The new plant will produce some 80 000 barrels a day, upping Sasol's contribution to national liquid fuels energy needs from around 40% to what? 60%? I only ask because that might make it difficult, in the short run, to find a market for Sapref's entire production. It is also not good news for the other oil company's inland fuel retailers in Gauteng, especially if Sasol service stations continue to spring up. Surpluses in Sapref production will probably go up the East African coast somewhere. If it does, watch out for the usual "they are exporting our fuel!" headlines written by ignorant journalists. But wouldn't it be nice if it all meant cheaper fuel in South Africa? Perhaps, even a price war on petrol? That would be something to see. Spigot is not holding his breath, though. Sasol probably predicates its expansion on the existing, tightly-controlled pump price system. The ANC Government certainly doesn't want to change the slickest-ever tax-gathering system. Oh, how quickly the pigs turn into farmers, as George Orwell would have said.

Biofuels switch a mistake, say researchers

SPIGOT is not a natural Guardian reader, but is indebted to that esteemed British newspaper for the following. Shock, horror! Increasing production of bio-fuels to combat climate change will release between two and nine times more carbon gases over the next 30 years than fossil fuels. Researchers at the University of Leeds have calculated the impact of bio-fuel carbon emissions across the whole cycle of planting, extraction and conversion into fuel. Bio-fuels look good in climate change terms from a Western perspective but globally they actually lead to higher carbon emissions, they conclude. "Brazil, Paraguay, Indonesia among others (Mocambique, South Africa) have huge deforestation programmes to supply the world bio-fuel market", he said. Does the Law of Unintended Consequence loom over the horizon? Spigot wonders.

Pipleline poser (2)

FOR those who do not read the comments from readers, this recent contribution to the pipeline saga is very interesting. " 1. Dear Trevor (Manuel) promises Sasol there will be no windfall tax. In fact Government 'encourages' Sasol's investment in new plant inland. (From tax to subsidy via one short commission)2. A few days later ...the Department and Minerals and Energy (Gumede) says that iPayipi played and lost - bad luck....3. This means that Petronet are preferred and of course you understand how tight Sasol and Petronet are. Just check the deal they have with the gas line inland to Durban. Again blocking use for inland movement from the coast.4. Coastal refiners will be held hostage as to how much fuel they can move inland - Sasol's product gets put to bed and Petronet control the line for their mates in Secunda.5. Who do you think really backs the Petroline consortium? Don't be suprised if it is Sasol. Let the Maputo line be built and it is a natural outlet for Sasol's excess production from any new plant. The fact that they currently export fuel north when the inland market is short beggars belief!6. So the merger (Sasol/Engen) was kicked out. Sasol don't lie down that easily. And Gautengers will continue to pay too much for their fuel based on the current pricing mechanism. If I was (Premier) Shilowa I would be hopping bloody mad. " Any comments from Sasol?