Karoo Fracking Update – August 2013

Words by Julienne du Toit

Photographs by Chris Marais

The South African Government has now made it clear that it is in favour of shale gas exploration and possible fracking in the Karoo.

On Thursday 22 August, Minister of Trade and Industry Rob Davies said Government wanted to open the way for shale gas exploration in the Karoo before elections in 2014.

“We want to move before the end of this administration,” he said.

Government has been largely silent on the issue of hydraulic fracturing (fracking) since the moratorium on shale gas exploration was lifted in September 2012. The silence was broken by ANC secretary-general Gwede Mantashe in July, after the party’s National Executive Committee lekgotla (gathering).

He cited fracking as an example of controversies that Government will no longer debate.

“At one point we are going to take a decision and say ‘Listen, go ahead’,” Mantashe was quoted as saying. “Those who are against it can take us to court and that’s it. That’s what should happen if we want the economy moving.”

On 21 August, Deputy President Kgalema Motlanthe told the National Assembly that scientific advice to the government was that the mining of shale gas through the controversial hydraulic fracturing or fracking method would be a “game changer” for the country’s economy.

Frack the country out of trouble?

There is clearly a perception among some Ministers that fracking can help save South Africa from the current economic downturn.

Moneyweb reported Davies saying that fracking was part of a range of steps to stimulate investment and job creation because of fears that a downturn in commodity prices would slow  economic growth.

South Africa could not rely on a tentative upturn in the United States and Europe to help local growth and jobs, said Davies. Also, there were worries that South Africa’s outlook was clouded by a slowing of large economies like those of China and India.

No quick fix, no cheap electricity

Yet even if commercially viable quantities of shale gas be found, this is no quick fix for growth and jobs. Shell has made it clear that production will probably only happen in ten years time. During the exploration period of between three and nine years, during which Shell will drill between six and 24 wells, there will be very few jobs, and these will be for only three months at a time in any particular area. Falcon and Chevron have said they will not drill but use seismic testing. The position of Bundu (owned by Challenger Energy) is still unclear.

As South Africa does not have inland gas facilities, all infrastructure will have to be constructed from scratch. Expertise will have to be imported, along with equipment.

These were some of the reasons why Sasol declined going ahead with their large Karoo shale gas concession in November 2011.

At the time, Sasol Petroleum International MD Ebbie Haan was quoted as saying:  “The Karoo on a world scale is not the best rock. Economic and operational viability of large-scale shale gas developments in SA is 20 years away.”

Sasol also calculated that drilling for shale gas in South Africa would cost six times what it would in North America.

Bob Govender of Shell admitted in April this year that shale gas extraction was likely to be expensive in South Africa and since it would be used for electricity generation, gas-fired power would not come cheap.

Treasure the Karoo’s response

In response to Rob Davies’ statements, Jonathan Deal of Treasure the Karoo Action Group (TKAG) has said that rushing to open shale gas exploration before the next election will be completely irresponsible.

“Firstly, we believe that such a decision will have an impact which will endure far beyond the election cycle of the Government. This decision cannot be rushed through before next year’s election. It will be completely irresponsible,” said Deal.

“Secondly, Minister Shabangu has promised on various occasions to consult with the public of this country prior to making any decision on shale gas mining. This has not happened, and the people of South Africa – at all levels – are entitled to be heard on an issue of this magnitude.”

“We are informed that Government has thus far relied largely on research commissioned by the Department of Minerals – which, in our considered view is singularly inadequate, considering the multidisciplinary nature of mining activity.”