Saturday, August 15, 2020

Fuel supply shortage triggers immense security questions

Botswana government has always been alive to the challenges confronting the country’s energy sector and in 2012 produced the Energy Policy Brief whose aim was to raise awareness on the status, challenges and opportunities of the sector. The brief came at a time that government took cognizance of the need for a balance between the global demands for cleaner energy in the interest of humankind and those of national energy security from a complex interplay which the policy seeks to articulate for the benefit of appropriate reforms in the energy sector.

Ironically, Botswana’s energy demand outstrips its supply, while her untapped energy sources are also high to meet both local and export volumes. Government has however, through its policy brief acknowledged that “the level of consumption of petroleum products represents a major challenge for Botswana.

“This challenge is more deep-rooted as it touches on the value of exports versus imports and the volatility of oil prices which has huge implications on the country’s import bill. Inter-related factors contributing to the high consumption of petrol and diesel, mainly by the transport sector, include ineffective public transport, lack of non-motorized infrastructure and sprawled human settlements. In addition to the economic volatility, high consumption of petroleum products increases Botswana’s Green House Gas (GHG) emissions with negative implications for wider human race in terms of climate change”, stipulates the policy brief.

The policy brief further posits that Botswana’s domestic energy-related resources present  immense opportunities for addressing her energy insecurities and increasing access to energy services. The abundance of sunlight, coal and cow dung forms the basis of such opportunities. The most significant input is the technology required to leverage the energy latent in these resources.

Another interesting dimension in the policy brief is the acknowledgement of transport being the biggest consumer of petroleum products, especially petrol and diesel. Non-motorized transport and the wider transport policy agenda harbor further opportunities for Botswana’s green economy.

“The statistics on ratio of cars to total number of vehicles and the levels of consumption of petrol are an indication of an unsustainable development path. The scale-up of the public transport systems an alternative to using private cars presents opportunities for an efficient urban transport system in Botswana. This thinking permeates the draft Botswana integrated Transport Policy”, the policy brief articulates.

In a July 2012 conference paper titled “Energy overview of Botswana: Generation and Consumption”, the paper authors, Eng Ofetotse and Emmanuel Assah lamented Botswana’s dependence on imports as in their view “poses threats to the security of its energy supply.

As a result, there is need to understand the bases for a possible generation expansion that would substantiate existing documentation”, hence the needy for the study on energy sources as well as energy consumption and production levels which is further developed by making projections of the energy demand up until the year 2020”.

In conclusion, the paper argues that Botswana’s over-reliance on imports to sustain its economy influences the energy security. “This is rather unfortunate because in the event that Botswana dependent countries face shortages, Botswana would not be able to sustain its economic growth”, it is argued and advised in the same vein that “there is need for Botswana to develop its own economy by meeting its energy challenges”.

In a September 1984 World Bank Report titled: “Botswana: Issues and Options in the Energy Sector”, it is stated in the executive summary that Botswana’s energy problems, although not as severe as facing many developing countries, present three broad challenges: the first is sustaining an ongoing transition from the country’s almost complete dependence on imported petroleum top increased reliance on local resources, particularly coal; the second is to devise and implement a strategy for exploring for and exploiting indigenous energy resources for exports as well as domestic markets; and the third is overcoming institutional fragmentation in energy planning and sector management, and the government is credited for the significant strides she has made in outlining the energy sector problems.  

In clear cut terms, the World Bank observed that Botswana’s ties to South Africa impinge on the energy sector in a number of ways and most concerning is that all petroleum imports are procured through SA under the SACU agreement and the prospects for large export-oriented development of Botswana’s coals reserves depend on transportation either through SA to the port of Richards Bay on the Indian Ocean or through Namibia to Walvis Bay on the Atlantic.

With particular attention to the petroleum products component, it was acknowledged that with the cooperation of the private oil companies, government was successfully implementing a major energy sector objective to construct strategic storage depots to hold both government-owned and industry owned buffer stocks.

The World Bank mission then recommended that government expedite its plans to develop contingency plans by establishing a plan of action for emergency movement of products through alternative routes such as Zimbabwe; and establish contingency product allocation plan based on improved and consistent data criteria.

Botswana is heavily dependent on South Africa for fuel supplies, directly and indirectly. Once SA if affected by production and supply interruptions, Botswana is caught up in the mix. Outlining “Energy security and liquid fuels in South Africa”, Jabavu Clifford Nkomo warned that dependence on outside sources leaves the country vulnerable to factors beyond its control such as oil price shocks and supply disruptions due to political and other external factors.

In his article Nkomo argues that there are various approaches to the problem of energy security. One view is that energy security should focus on the proper functioning of the economy, with uninterrupted availability of the energy resource at an affordable price, as alluded to by the European Union.

In line with this view, the policy objective of security of supply is to reduce risks linked to dependence rather than attempting to maximize energy self-sufficiency or minimizing dependence. Another view accepts dependence on imports, but advocates for diverse sources of supply with no dominant supplier, enabling the economy to produce sufficient goods and services affordably. In yet another approach, the EIA places responsibility on governments to reduce the risk of supply disruptions.

RELATED STORIES

Read this week's paper

SEZA guns for job creation

By removing barriers to trade, restrictive policies and excessive bureaucracy, the Special Economic Zones Authority (SEZA) hopes to attract top shelf investors...