Petroleum Pipelines Bill: Department’s Response to submissions

Meeting report

MINERALS AND ENERGY PORTFOLIO COMMITTEE
11 August 2003
PETROLEUM PIPELINES BILL: DEPARTMENT’S RESPONSE TO SUBMISSIONS

Chairperson: Mr M Goniwe (ANC)

Documents handed out:
Petroleum Pipelines Bill (B22-2003)
Petroleum Pipelines Bill [revised Bill with proposed amendments]
Powerpoint presentation on revised Bill
Department’s response to documents
[PMG hopes to have these documents here by late 16 August]

SUMMARY
The Department presented the revised Petroleum Pipelines Bill which incorporated many public submissions, brought the Bill into conformity with the Gas Act and clarified some of the language in the original Bill. The Chair noted the extensive amendments as a result of the public hearings. The Committee will study the revised Bill before commenting on it.

MINUTES
Dr R Crompton (Deputy Director General: Hydrocarbons & Energy Planning, Department of Minerals and Energy) accompanied by Mr Manny Singh (Director: Petroleum Policy), noted that the presentation was on the proposed amendments to the Petroleum Pipelines Bill only and not on any document containing the Department’s response to the public submissions.

Dr Crompton said that the changes in the revised Bill incorporated the submissions. He also noted that the tabled Bill had needed to conform with the Gas Act plus certain language needed to be clarified in some areas of the Bill. Conformity with the Gas Act was needed because previously there had been a debate on a single energy regulator.  He thanked the stakeholders for their useful comments.

In his presentation, Dr Crompton read through sections of the Bill that have been changed either to conform to the Gas Act, to incorporate submissions or to ensure clarity. It was noted that the amendments to the bill are marked with blue, green and purple colours, while those deleted are stretched. It also showed the extent of changes made to produce the revised Bill.

The following are the sections of the revised Bill that were read through:

Definitions,
Objects of the Act,
Powers and duties of the Authority (i.e. The Petroleum and Minerals Regulatory Authority),
Constitution of the Authority,
Disqualification and requirements regarding the appointment of the Authority,
Vacation of office and termination of appointment,
Duties of members of Authority,
Decisions of the Authority,
Personnel of Authority,
Funds of Authority,
Accounting of Authority, Reporting by Authority,
Application for license,
Conditions of license,
Non Recrimination,
Revocation of license on application,
Contraventions,
Health, safety, security and environment, S
Setting and approval of tariffs,
Investigations by Authority,
Rules and regulations,
Transitional provisions

Discussion
Mr Davidson asked for clarification on Clause 20 (1) F (ii).

Dr Crompton said that Clause 20 (1) F (ii) was there to cater for issues of sufficient supply and tariffs. He said the new 20 (1) F entails that a licence must be issued where there is enough capacity in the facility to get the crude oil. He said that this would guarantee supply regardless of other conditions of the licence. Thus it does guarantee a supply of crude oil to an inland refinery so that it can operate at normal operating capacity at the commencement of this Act He said the phrase “commencement of this Act” was there to give room for negotiations in the future.

Mr Davidson asked for clarification of Clause 20 (1)(g) as to what " in proportion to their needs" means. On what grounds do they justify “in proportion to their needs” and what happens if what they need is more than the capacity of the pipeline.

Dr Crompton said that experience had shown that there may exist certain physical constraints or operational constraints, in which case there may be changes to the capacity of the pipeline. He said that, for example, if there were a need to change volumes in pipelines, all users would have to reduce their volumes on a pro-rata basis.

Mr Oliphant (ANC) said that he had no problem with the Bill as amended. He suggested that the Committee needed to have a way forward. It was difficult for the members to have a meaningful discussion because they had not studied the revised Bill.

The Chairperson suggested that members study the Bill. He also remarked that the revised Bill shows that it is incorrect for the public to think that the tabled Bill is a ‘fait accompli’ and that public hearings have no impact.

The Committee agreed that members be given time to study the document and the meeting was adjourned.