S. Africa's synthetic fuels make it envy of the world
Johannesburg — If the energy crisis is over, someone forgot to tell South Africa. While the storage tanks of the major industrialized nations are brimming with oil, South Africa is enhancing its already dominant position as world leader in synthetic fuels production.
Here in the open veld east of Johannesburg, where sunflowers and maize crops once ruled, a mammoth synfuels construction project is under way. It will put further distance between South Africa and the crisis-prone global oil market. Also, the billions of dollars worth of gleaming hardware will lessen the potency of international boycotts against South Africa for political reasons.
South Africa is about 90 percent complete with the construction of Sasol 3 - the third plant utilizing an advanced technology that gobbles up coal at one end and spouts a ''sweet'' (no sulfur) apple-juice-colored oil product at the other end. South African motorists pump the product, once refined, into their automobiles every day.
The production of synthetic fuels is not new in South Africa, which has been squeezing oil from coal since the 1950s. But the payoff for those early endeavors is more evident now than ever before.
Surveying the on-again, off-again interest of many industrial nations in synthetic fuels, Sasol, Ltd., general manager J.A. Stegmann says experience shows the first step is the toughest.
''It always seems it will be more economical (to invest in synfuels) tomorrow. But the trouble is capital costs keep chasing the price of oil,'' he says. He is convinced government assistance in launching a synthetic fuels industry in any country is essential because of the tremendous capital investment required. Even when projects appear profitable over the long term, private investors are reluctant to make such huge capital commitments.
In South Africa, government funds have been used to build all three Sasol plants. The combined price tag is over $6 billion.
However, the South African approach is to sell off the plants as they become profitable. In 1979 the quasi-government Sasol corporation was opened up to private investors, who quickly gobbled up shares because of the sound performance of Sasol 1. As Sasol 2 and Sasol 3 become profitable, they, too, will be open to private-sector investment.
Sasol is going up in what officials here figure is a world record for construction time on a project of this magnitude. One of the main reasons is the carbon copy - Sasol 2 - which sits next door. Sasol 3 was proposed in February 1979, and is expected to begin production in early 1982, about the same time that Sasol 2 should achieve full production.
By being able to construct Sasol 3 in a near identical fashion to Sasol 2, money and time were saved in design and construction.
The speed with which the South African government has moved in synthetic fuels production is, on the surface, rather surprising, given this country's already enviable energy position.
With ample supplies of coal - Sasol 2 and 3 sit on top of the world's largest underground coal field - and no domestic oil production, South Africa has historically looked at oil as the energy source of last resort. South Africa's entire grid of electrical power is generated with coal.
That means South Africa relies on liquid fuels for less than 25 percent of its total energy needs. The United States and other industrial countries would dearly love to make a similar claim. The United States relies on liquids for some 45 percent of its energy needs, while West Germany's dependency is over 50 percent, and Japan's about 69 percent.
Yet this is not good enough for South Africa, which has looked at energy as one of many strategic interests in which it must strive for near self-sufficiency. South Africa's racial policies of enforced segregation have made it a constant target of international boycotts, spurring the government to view foreign trade as a source of vulnerability. The Arab oil-producing nations have an embargo on oil exports to South Africa.
With Sasol 2 and Sasol 3, South Africa will reduce its reliance on imported oil greatly. The government does not disclose Sasol production figures, but reliable estimates indicate Sasol 2 and Sasol 3 will produce at least half of South Africa's liquid fuel requirements. For now, there are no plans for a Sasol 4.
Strategic considerations are the basic motivator behind the huge government investments in Sasol. The other is that South Africa, unlike other developed nations, faces an immediate future of rather brisk growth in energy consumption.
''We cannot sit down and rest because before we know it, we will be slipping again,'' says Mr. Stegmann.
His point is that South Africa will need to continually expand synthetic fuels production if it wants to keep oil imports at bay.
The reason is found in the dual nature of the South African economy. The white-run sector of the economy is modern and relatively mature. Like the economies of other developed countries, it is learning to adjust to higher energy costs with conservation and greater efficiencies.
But the majority of the population in South Africa is black. They are relatively poor, but are gaining rapidly in purchasing power. They are becoming more urban and have a relatively high birth rate.
This all adds up to sizable growth in energy consumption among blacks. Automobile ownership, for example, is growing at a rate nearly four times that among whites.
Mr. Stegmann figures for the population of South Africa as a whole, liquid fuel consumption will grow between 4 and 7 percent annually over the next decade.