Moneyweb reports on fracking saga in SA

Fracking: heading for a showdown

Kim Cloete | 2013-11-13 14:42:36

Deadline looms for public comment.

This week is a big one for those on either side of the fracking fence. The 30-day period for public comment on the draft regulations on fracking draws to a close this week (on November 14), with people for and against shale gas extraction just as passionate about the issue as ever.

Billionaire conservationist and Richemont chairman, Johann Rupert, the Treasure Karoo Action Group, led by Jonathan Deal, and many other concerned South Africans have led the charge against fracking, but the odds seem increasingly against them.

Several key government ministers have come out clearly in favour of shale gas extraction, a potential money-spinner for the government and an alternative to coal-fired power.

A contentious Econometrix study says if exploration is successful and fracking goes ahead, it could add 0.5% of GDP to the economy every year for 25 years. The Econometrix report and its figures have been challenged by Deal.

Deputy President, Kgalema Motlanthe, Trade and Industry Minister Rob Davies and Mineral Resources Minister, Susan Shabangu, have all recently weighed in on the benefits of fracking.

Davies told a Cabinet briefing in August that the government could authorise shale gas exploration before next year’s elections, while Shabangu has said it’s the government’s responsibility to explore energy sources that would improve the country’s energy mix, grow the economy and create jobs.

The proposed regulations, which were approved by Cabinet on October 9 this year and opened for input and comments, are aimed at augmenting the Mineral and Petroleum Resources Development regulations. The department says they set standards and practices that will ensure safe exploration and exploitation of petroleum.

But Deal believes the regulations as they stand are a ‘cut and paste job’ from the American Petroleum Institute (API), an industry-funded body not focused on environmental concerns.

The Treasure Karoo Action Group is to release an over 400-page report on Thursday in response to the regulations.

The regulations include looking at the terms for the Environmental Impact Assessment. They stipulate that water resources should not be polluted and look at the need to assess conditions below ground. They also raise the importance of putting together a geological map of the area with details that could lead to a better understanding of potential structural problems.

The sensitive Square Kilometre Array (SKA) area in the Karoo will be out of bounds and this is also included in the regulations.

The Treasure Karoo Action Group, environmentalists, NGOs and several scientists say the draft regulations are inadequate and would not protect the constitutional right of South Africans to an environment that is not harmful to their health and well-being.

The group believes fracking technology is water-thirsty, unsustainable and poses a documented environmental risk.

Deal believes the government has not fully investigated the ramifications of fracking. “It’s a very ill-prepared approach at the moment, on such a huge initiative,” he told Moneyweb.

He’s also disappointed about what he says is the ‘virtually non-existent’ public participation with people living in the Karoo, including farmworkers.

Richemont Chairman, Johann Rupert has earlier said that lack of proper consultation with landowners over exploration had violated property rights enshrined in the Constitution. He’s promised to take legal action if exploration licences are granted.

Fracking has led to a massive expansion of natural gas in the US, but has been banned in other countries like France.

The process involves digging wells of up to four kilometres deep, pumping in millions of litres of water mixed with chemicals under intense pressure. This is intended to crack the shale rock and release the gas.

Shell has applied for an exploration licence covering more than 95 000 square metres – a huge section of the Karoo.

Shell in South Africa has been at pains to say that the company would practice responsible fracking and would not compete for water with the people of the arid Karoo.

The company says its environmental, social and health impact assessment would include conducting specialist studies, water tests and seismic testing.

If Shell is granted a licence to explore the area to determine if commercial natural gas resources exist in the area, exploration would involve drilling up to 24 wells in over three years. The licences could be renewed three times for two years each.

Shabangu has said that the government has ‘acted in the best possible way, in the interest of the South African economy and its citizens and would continue to do so as it traversed the journey of hydraulic fracturing for the production of shale gas.’

Exploration activities could end after three years if exploration is not a success.

If all goes well, Shell says production could be up to nine years away, but that doesn’t hold water for many people in the Karoo, who fear the tranquility of their land will be shattered.

With the government showing signs that it is committed to exploration, lobbyists are considering all of their options.

“If fracking goes ahead, we will push hard for public oversight and strict regulation. We’ll insist on it,” says Deal.

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