SA Public Investment Corporation set to gamble with state pensions





SA’s Public Investment Corporation set to gamble with State Employee Pensions

27 February 2014


The senior investment officer for the PIC, Dan Matjila told Reuters “Shale will be a game changer here and we will be the biggest investor.”

The PIC manages 1.4 trillion rand of South African public employee retirement funds.

Treasure Karoo Action Group CEO, Jonathan Deal, said “We challenge the PIC to defend its choice of shale gas in South Africa as an investment for the pension funds of South Africa’s state employees. We are prepared to state categorically that the PIC has not done their homework on this issue. They see it as an opportunity to make money, but we see it as an opportunity for them to lose the hard-earned savings of the people that they are supposed to protect.”

“Shale gas losses in the United States between 2011 and 2013 ($6.8 billion) have cost just 3 multinational corporations including Royal Dutch Shell the dollar equivalent of R68 billion rands. Moreover, unless there is some secret document from which the PIC has developed its bullish appetite for shale gas, we have strong cause to believe that the PIC has relied on the infamous Econometrix report paid for by Shell and released in March 2012. If indeed the PIC has another, and more credible source of information, they must make it public – as they are working with public funds. We suspect moreover, that Challenger Energy, one of the applicants to mine shale gas in South Africa which has been making a noise about looking for partners and which is represented by a highly placed local BEE businessman, could become part of this investment.”

According to Head of Environmental Affairs at AfriForum, Julius Kleynhans, the proposed high risk investment may pose an even bigger risk on water resources. “Political pressure ‘similar to the case of e-tolls’ may pose detrimental risks to valuable natural water resources. The Karoo is a semi-arid area and it is evident that water resource management is not nearly up to standard throughout South Africa – with substantial negative economic consequences. One cannot risk this critical resource ‎for short-term economic gain.  Having regard for the status quo around water issues in South Africa – including what it is presently costing the country to deal with water pollution and shortages, we are not confident that the Departments of Minerals and Water Affairs have the necessary infrastructure to manage responsible utilization and development in the country,” argued Kleynhans.

TKAG concluded that “To gamble with the pensions of teachers, policemen and policewomen, nurses and other state employees smacks to us of the same attitude that lead to the investment in the Etolls. In 2013 the biggest bank in the Netherlands made a principal decision not to finance shale gas or lend any money to any company involved in fracking. TKAG is not a financial organisation, but our research on shale gas is solid, and we believe that the PIC is taking a very big gamble, and that the holders of those pensions need to stand up and put a stop to it – if our government can’t do their sums.”

CONTACT JONATHAN DEAL 023-358-9903/076-838-5150

JEANIE LE ROUX 072-959-1818


1000 US Doctors must be wrong – Shell and Mr. Zuma say fracking is just what we need

What have pro-fracking organisations and people to say about this? are ALL of these people, stupid, or drunk, or do they all perhaps have vested interests in solar energy? What possible reason could these 1000 people (most of them degreed) have for writing to their president about Fracking.


While SA’s leaders spread ‘feel good’ job figures from FRACKING

State inflates fracking-related jobs numbers

Report shows decline in gas-drilling jobs and overstates the number of workers supporting natural gas industry.

New York State Mulls Limited Fracking In Southern TierHydraulic fracturing, or fracking, of shale for natural gas has boosted local economies in South Montrose, Susquehanna County, (pictured here) and across the state. (SPENCER PLATT, GETTY IMAGES / June 19, 2012)
By Steve Esack, Call Harrisburg Bureau9:24 p.m. EST, February 23, 2014

HARRISBURG — As executive director of the Wellsboro Area Chamber of Commerce, Julie VanNess was front and center when energy companies descended on Tioga County to secure drilling leases on pristine land around Routes 6 and 660 through Pennsylvania’s Grand Canyon.

“I don’t have a negative feeling for the industry,” VanNess said.

The industry was accommodating and respectful of the community’s needs and understood the importance of its tourism industry, VanNess said. It fixed long-neglected back roads to handle rigs, rerouted drivers away from Wellsboro’s tony downtown and kept trucks away from schools during class time, she said.

“You can’t tell they were even here,” VanNess said. “If you drive through the countryside you will not know something happened. Once the wells are drilled, capped and the pipelines in, you don’t notice them.”


That was about two years ago.

With leases signed and wells operating, the companies have pulled back resources amid what had been until recently a downturn in natural gas prices. Many of the out-of-town workers who filled hotels and restaurants in and around Wellsboro have left, too.

“Right now it’s on kind of a hiatus,” VanNess said. “It’s slowed down significantly here. I expect that will pick back up again. Right now you see very little activity.”

It’s the same story in many of the 32 other counties where drilling began in 2004 to extract natural gas trapped in the underground Marcellus and Utica Shale formations: Fewer jobs and less overall economic activity, despite a record amount of gas — 3.1 trillion cubic feet — produced in 2013.

The industry has declined, Williamsport Mayor Gabe Campana said, but it’s still alive. Without it, the unemployment rate in his third-class city of 35,000 would be 10 percent and he wouldn’t have four new hotels downtown.

“It’s made a difference in the overall economy,” Campana said. “But it has receded. Talk to the guys in the field and they’ll tell you there’s ebbs and flows. It has picked up in the past two, three months and we are encouraged by that.”

Gov. Tom Corbett praises the natural gas industry as a key cornerstone of the state’s economy.

“It’s lifting up entire communities, creating and supporting many thousands of jobs well beyond gas production,” Corbett said in his Feb. 4 budget address.

But state records show the gas industry has not created as many jobs as state officials have claimed. In addition, the state’s estimates of ancillary job growth have been inflated to include employment in places drilling isn’t even taking place, further skewing the impact the natural gas industry has had on employment.

The number of jobs directly associated with Marcellus Shale’s six “core industries,” including drilling, extraction and pipeline construction, declined by 29 percent to 29,926 between the fourth quarters of 2010 and 2013, according to the state Department of Labor and Industry’s January labor report. The report is based on employer surveys collected for federal unemployment data and has been produced using the same analysis since Gov. Ed Rendell‘s administration.

The number of core gas jobs accounts for less than 1 percent of the state’s nearly 5.8 million jobs.

Corbett spokesman Jay Pagni defended the administration’s record on jobs in the shale industry and its training efforts. He said the state and governor support all forms of industry equally, and has numerous programs to help train workers in the event of a downturn in the local economy or job sector.

“The commonwealth and the governor support local communities in not only the Marcellus industry but in all industry,” Pagni said in an email. “Activities abound in attracting new business to the state, ensuring that services are available to companies while they manufacture, produce, create, etc. and support the workforce through job training and retraining efforts should a company choose to leave.”

All industries go through a natural cycle, Pagni said. The workforce and activities associated change and adapt, he said.

“If a well is not being drilled, jobs continue to flourish in the trucking and transport because it is still producing,” Pagni said. “These activities will continue to provide economic benefit to communities as the industry moves from flow to ebb.”

While the core Marcellus Shale jobs are declining, the Labor Department claims the number of ancillary jobs indirectly tied to the natural gas industry has increased 8 percent to 212,000.

But that increase is not based solely on employment trends in the counties where more than 7,000 wells are permitted to be drilled.

The report includes statewide employment trends in trucking, engineering, highway construction and about two dozen other career sectors. So jobs in the Lehigh Valley, Philadelphia and other areas where there are no wells have been counted as ancillary gas jobs.

Labor Department spokeswoman Sara Goulet defended the report, saying the data on core jobs show a concentration of drilling, extraction and construction jobs has increased in the state’s northern tier and southwest corner, where drilling is being done.

But trying to quantify the ancillary jobs data is hard, Goulet said, because the number of ancillary jobs has increased in the drilling regions, too. But since there is no way to determine if the jobs are tied to the gas industry, she said, it makes sense to list statewide employment numbers.

“Employers don’t state, ‘That’s a Marcellus Shale construction job’ in the employer survey that counts jobs,” Goulet said. “It is not a perfect science, but it does give a fair picture of those ancillary industries’ growth as it pertains to [Marcellus Shale] and the time period when those industries started to experience significant growth.”

The shale industry is creating support jobs statewide even if they are in Delaware County, said Kravis Windle, a spokesman for the Marcellus Shale Coalition, a trade group in Pittsburgh.

“As President Obama‘s energy secretary stated last week, responsible shale development is creating ‘economic prosperity’ across Pennsylvania and beyond,” Windle said in an email. “Not only are tens of thousands of good-paying jobs being created at well sites and pipeline construction projects across the commonwealth, but with Pennsylvania now the nation’s second largest shale-producing state — accounting for nearly 20 percent of all U.S. natural gas production — many other support industries are realizing these benefits.”

There is no question the drilling industry has had a positive impact in communities, said Mark Price, a labor economist with Keystone Research Center, an economic policy group with ties to several labor unions. The Labor Department report on core drilling jobs does a good job of capturing that impact through its employment report of the gas industry, he said.

But the ancillary report is bloated and useless, Price said. The shale industry has led to more engineering and trucking jobs, he said. But it’s hard to believe every engineer or trucker in the state is working in the gas industry as the Labor Department reports, he said.

“The ancillary is gobbledygoop,” he said.

The Labor Department cannot publish a county-level jobs report because of privacy issues, Price said. The report would be so narrow it would be easy to identify companies by name, which would violate private unemployment rights, he said. With that legal difficulty, Price said, the state should not publish a statewide ancillary report because it cannot accurately track which jobs support the shale industry.


Copyright © 2014, The Morning Call

Read more:–marcellus-shale-jobs-20140223,0,7323897.story#ixzz2uDatva8o
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Accusations fly against Ohio Governor in fracking coverup

If it’s happening in America, how simple for it to happen here? – (

Ohio Governor Accused of Covering Up Role in Promoting Fracking in State Parks

Sunday, February 23, 2014
Ohio Gov. John Kasich (AP photo)

The administration of Ohio Gov. John Kasich has been accused of covering up its role in a controversial plan to promote hydraulic fracturing, or fracking, in state parks and marginalize organizations opposed to the drilling.

The Sierra Club obtained internal government documents showing several state agencies were involved in a public relations strategy to help gas companies seeking rights to drill on public lands.

A communications plan drawn up by the Ohio Department of Natural Resources (ODNR) in October 2012 called for a coordinated effort between the state and private industry to push for more fracking, as well as publicly attack environmentalists who objected to the drilling.

The Republican governor’s office has denied that Kasich knew of the plan. But the Sierra Club says an internal email obtained by them shows that a key staffer in Kasich’s office, Director of Policy Wayne Struble, was involved in the PR strategy, which was not put into effect.

“First came the plans to make life tough for those that disagree with him and now the endless staff cover-ups,” Brian Rothenberg, head ofProgressOhio, said in a statement.

Rothenberg insisted the email “casts serious doubts” on Kasich’s denial of not being aware of the strategy.

In the draft communication plan, the ODNR characterized environmental opponents as being “skilled propagandists” who would resort to “zealous resistance” to stop fracking in state parks.

To “marginalize” these opponents, the department planned to enlist help from Kasich’s office and other state agencies, including Ohio EPA and the Ohio Department of Health. Other allies included Halliburton and the local and U.S. Chambers of Commerce.

“This is an unprecedented collusion between oil and gas companies and the agencies that regulate them,” Brian Kunkemoeller, conservation program coordinator for the Ohio chapter of the Sierra Club, said in a press release. “This isn’t just bad news for our parks and forests, it’s bad news for our democracy.”

The ODNR responded to the controversy by saying it was prudent for the agency to prepare for public opposition, particularly those viewed as being extreme in their views or tactics.

“Any responsible organization plans in advance what it is going to do especially when it knows it is going to face fierce opposition to progress,” ODNR spokeswoman Bethany McCorkle told the Columbus Dispatch. “The fact that these secretly funded extremist groups are attacking us today validates the wisdom of anticipating the attack and planning for it.”

-Noel Brinkerhoff

To Learn More:

Ohio Governor’s Office Linked to Fracking PR Conspiracy (by Lauren McCauley, Common Dreams)

Kasich Administration Caught Up in Fracking Conspiracy Cover-Up (Sierra Club)

After 234 Years without an Earthquake, Youngstown had 109 in One Year Once Fracking Began (by Noel Brinkerhoff, AllGov)

Another case of water-contamination from fracking that pro-frackers will probably deny

Bradford County woman wins arbitration case with Chesapeake over well contamination

Published: February 19, 2014

Jacqueline Place signed a lease in June 2008 that included an arbitration clause specifying American Arbitration Association as the forum for resolution of any claims resulting from damages caused by the Chesapeake’s operations.

Read the award HERE

In December 2008, Ms. Place hired a consultant to conduct baseline tests of the water from her well, according to legal documents provided by her attorney, John Barry Beemer. That test showed the well had methane levels of 0.01 parts per million.

The baseline test became the foundation of her arbitration case, Mr. Beemer said.

“If you don’t have that baseline testing, you don’t have a case, basically,” he said.

In August 2009, Chesapeake finished drilling a well, Barrett 2H in Asylum Twp., underneath Ms. Place’s property to extract gas from her land. The bottom of that well’s bore is within 80 yards of Ms. Place’s water well, according to Ms. Place’s arbitration brief.

On March 22, 2010, Ms. Place noticed her water had become “reddish brown” and “oily.” She told Chesapeake and the Pennsylvania Department of Environmental Protection. Both came to test her water that April. Both found dissolved methane levels 1,300 to 2,000 times higher than the baseline tests, the brief states.

The DEP determined the well water should not be used. Chesapeake brought in at least one water buffalo as a temporary water supply and installed methane monitoring equipment.

Chesapeake, the DEP and Ms. Place’s consultant continued to test the well over the next several months, finding “levels of methane hundreds of times higher than the pre-drilling ‘baseline’ results from 2008, as well as increased iron and turbidity.”

In December 2010, the DEP gave Chesapeake permission to reconnect Ms. Place’s well, which the company did in January 2011. In February 2011, the department issued a Section 208 determination letter saying Chesapeake’s operations caused a “temporary impact” to the well and recommended ongoing testing.

The DEP, the U.S. Environmental Protection Agency and Ms. Place’s consultant continued testing the well over the following 16 months, finding methane at levels higher than the baseline but below the DEP’s action level.

In May 2013, a trial expert Ms. Place hired found a methane level of 0.042 parts per million. Ms. Place and her son still drink bottled water, the brief states.

“In short, Jacqueline Place lived for 10 months deprived totally of the use of her well, and even after its ‘restoration,’ has been burdened with a water supply with chronic contamination, requiring constant vigilance and ongoing monitoring,” according to the brief.

Mr. Beemer and his co-counsel, Gerald Williams of Philadelphia, represented Ms. Place in an arbitration hearing at Mr. Beemer’s law office in Clarks Green that lasted from Jan. 6 through Jan. 8.

Ross F. Schmucki, the arbitrator for American Arbitration Association, ordered Chesapeake to pay $59,381.42.

Contact the writer:, @bgibbonsTT on Twitter


Mail and Guardian’s Science Editor feeling the heat of shale gas debate

“It would appear that Miss Wild has been misled in her investigation into the death of the South African anti-fracking lobby” responded Treasure Karoo Action Group. “We are mystified as to how Miss Wild can make such, well, wild claims.”

Mail & Guardian
Comment and Analysis

Opposition to fracking peters out

14 FEB 2014 00:00 SARAH WILD

The fight is no longer about fracking but how it is going to be carried out, writes Sarah Wild.
Gas flaring inevitably accompanies fracking.

The anti-fracking lobby in South Africa is dead. The vociferous opposition to a controversial technique known as hydraulic fracturing – used to free and capture natural gas stored in shale rock formations – has faded into sporadic yelps.

It has been drowned out by the government’s push to find out whether the country’s estimated 390-trillion cubic feet of natural gas reserves actually exist. A generous reading of the government’s intentions shows a state that is presiding over flagging economic growth and unemployment figures that loiter around 25%, at a minimum. Others say it is self-enrichment: the draft amendments to the Minerals and Petroleum Resources Development Act of 2002 will see the state owning more than 20% of mining projects.

But after legal challenges and public outcries, natural gas exploration is going ahead. The lobby did manage to delay the go-ahead for several years: In 2011, there was a moratorium on shale exploration, which lasted a year, and in 2013 the department of mineral resources published technical specifications for natural gas extraction. Last week, Mineral Resources Minister Susan Shabangu reiterated the government’s commitment to shale-gas exploration.

But some lobbyists said: “But there is still a chance – they shouldn’t be doing it. We will stop it.”

And that’s all it is: a chance – and an increasingly unlikely one. So what we need is a mitigation strategy.

Pros and cons
Natural gas could be a very good thing for South Africa – an unexpected revenue stream that could reduce our reliance on filthy coal, increase our energy supply and create a new industry. But it could also be an unmitigated disaster, destroying one of the country’s most biologically diverse regions. And the more time we spend shouting at thunder and stomping our feet because we don’t want fracking, the more likely this will be the ultimate outcome.

A mining specialist said earlier this year: “Energy generation can be clean but that costs money and depends on the regulations.”

Energy companies will not regulate themselves. They are concerned about their bottom lines and will only pay attention to environmental concerns when it costs them money.

Professor Hilary Inyang, an energy expert and part of the International Council for Science, said last year: “From my experience, the companies are there to make money, not [to] be responsible for environmental stewardship. Their behaviour is dependent on regulations and enforcement of them. They cannot be trusted to do things in an environmentally compatible way. The regulatee cannot be the regulator.”

However, the question of who is in charge of compliance appears to be muddled. The department of mineral resources referred the Mail & Guardian to the department of environmental affairs, whose Environmental Management Inspectorate, known as the Green Scorpions and with a staff of 330, is in charge of compliance. Mining is only one of many areas they oversee.

Conflicting responsibilities
The environmental affairs department, in turn, said it worked with the mineral resources department on environmental compliance. But even if the Green Scorpions were better staffed, they cannot enforce legislation – they hand cases over to the National Prosecuting Authority.

But, if the current amendments to the Act go through, the mineral resources minister would be responsible for overseeing environmental matters that relate to prospecting, mining, exploration and production.

This would be a catastrophe – not only with respect to fracking but for all mining. Environmental compliance cannot be the responsibility of the department of mineral resources alone. The department is tasked with overseeing mining: its mandate is to “promote and regulate the minerals and mining sector for transformation, growth, development and ensure that all South Africans derive sustainable benefits from the country’s mineral wealth”. It does not mention the environment.

Instead of adding to the sound and fury surrounding fracking, we need to look at the greater problem, such as coal mining in Mpumalanga, discarded uranium in gold mining tailings and derelict mines that are allegedly no one’s responsibility.

We cannot see the wood for the trees. Hydraulic fracking will be as dirty and as catastrophic as it is allowed to be. But, considering the lack of environmental legislation enforcement in many mining activities, and the possibility that this responsibility will ultimately be vested in the department of mineral resources, it could be the disaster many fear – unless we pick our battles and push for the regulation and enforcement that is needed.

Sarah Wild is the Mail & Guardian’s science editor.

Sarah Wild is a multiaward-winning science journalist.

Confusion ‘rains’ on SA Department of Minerals

The government approach to shale gas mining is anything but dull – with conflicting statements at Ministerial level vying for space with notices in the government gazette in a month that has left the oil & gas industry reeling. And just to add a bit more confusion, South Africa’s own agencies ( have reduced the estimates of shale gas by a factor of more than 12 from 485tcf (commonly touted) to 40tcf.


Controversial minerals Bill stalls abruptly


Parliament’s committee on mineral resources says gas and oil should be treated differently to mining.

Untapped: Susan Shabangu has in effect extended the moratorium on fracking until draft technical ­regulations have been promulgated. (Mike Hutchings/Reuters)

Parliament’s portfolio committee on mineral resources delayed its deliberations on controversial changes to the country’s mining and petroleum law this week.

Although it will bring some relief to the mining industry, which has publicly locked horns with the government over the changes envisaged in the Mineral and Petroleum Resources Development Amendment (MPRDA) Bill, it prolongs policy uncertainty for other players such as those in the nascent oil and gas sector.

The portfolio committee decided on Tuesday to delay deliberations on the Bill. This followed the introduction of new amendments that required alignment with environmental legislation and as such the speaker of Parliament and the National Assembly had to be notified in writing.

The committee’s chair, Faith Bikani, also said a thorough investigation of the separation of the oil and gas sector from the jurisdiction of the country’s mining laws was needed.

“We need to acknowledge that there is a difference in level of the progress we have made in the mining industry as compared to the progress we have made in the oil and gas industry,” Bikani said.

The oil and gas industry has long advocated this. The hiatus in legislative wrangling came hot on the heels of two notices published in the Government Gazette by Mineral Resources Minister Susan Shabangu that had oil and gas industry players scratching their heads.

A regard “for the national interest”
The first in effect extended the moratorium on hydraulic fracturing, or “fracking”, until draft technical regulations for it are finalised and promulgated.

The second invited comments from interested parties on the minister’s much broader intention to “restrict the granting of all new onshore and offshore applications for reconnaissance permits, technical co-operation permits, exploration rights and production rights” for two years.

The official reasons given for the notices were a regard “for the national interest and the need to promote the sustainable development of the nation’s petroleum resources”.

Luke Havemann, an oil and gas expert at law firm ENSafrica, said it could be surmised that the government is seeking to get its “regulatory and legislative house in order”.

Recent developments in the sector, notably the MPRDA Bill and the draft regulations on hydraulic fracturing, both of which have been sharply criticised by stakeholders, pointed to the need for the sector to be governed by is own regulatory and legislative framework.

“Regulation of two distinct industries under the MPRDA has never been the best approach,” Havemann said.

Renewed interest in SA’s oil sector
There is a renewed interest in South Africa’s oil and gas sector, he said, and three “super majors” are active in local waters.

There has also been a high number of applications for exploration licences and the like over the past three years.

Hitting the pause button may dampen the appetite of international oil and gas companies to operate in a country that is not going to be granting licences for the next two years, he said.

But, if the government took the opportunity to improve the regulatory and legislative regime, it could have important positive consequences in future, he said.

“Then the industry would be operating in an … environment that is not dissimilar to other jurisdictions in which these operators work. We are out of step with international best practice when it comes to the way in which we regulate our oil and gas industry.”

But the debate about a division goes against the position publicly taken by Shabangu. At the 2014 Mining Indaba two weeks ago, she said that the two sectors should be governed by one Act to ensure centralisation and regulatory harmony.

Less concerned about the deadline
She was confident that the Bill would be finalised before Parliament’s term expired before the elections.

But the portfolio committee appears less concerned about the deadline. Bikani said, given the stage of development of the local oil and gas sector, it has to be “nurtured” and special attention must be given to aspects of the industry, such as operations in a “sea environment”.

“Right now I am not worried about timelines of the Bill being passed. Instead, let’s wait for the ruling party and get a clear understanding of what route we take to nurture the oil and gas industry,” Bikani said.

The Democratic Alliance’s spokesperson on mineral resources, James Lorimer, said the “more time spent in processing the Bill, the more chance that those driving the Bill will see sense”.

He said the department had ignored the input of industry stakeholders, which had contributed to the current pressure to make so many changes to the legislation now.

Although delays may aggravate the uncertainty for the oil and gas industry, a “harsh choice” has to be made, he said.

Critical issues to be addressed
“It’s not first prize but its better than unacceptable, damaging legislation being passed now.”

Other critical issues still have to be addressed. These include clarity on a proposed 20% free carried interest for the state in all new oil and gas ventures, with an option to purchase a further 30%.

According to critics this proposal, and potential requirements for a 26% black economic empowerment stake, leaves little equity available to investors in new projects, even though they would provide most of the initial capital and bear most of the risk.

The department did not respond to emailed questions by deadline.