SA to regulate, monitor shale gas exploration

28 August 2014

The government is working on a set of regulations that will ensure that shale gas exploration does not threaten South Africa’s environment or compromise research projects linked to the Square Kilometre Array, says Mineral Resources director-general Thibedi Ramontja.

Ramontja was briefing Parliament’s portfolio committee on mineral resources in Cape Town on Wednesday on his department’s progress on finalising the technical regulations on petroleum exploration and exploitation by means of hydraulic fracturing, or fracking.

The department halted new applications for exploration rights in 2011 in order to investigate the impact that shale gas exploration would have on the environment, and an interdepartmental task team was set up to head this process. This led to the publication of the draft regulations in October.

Speaking at the time, then Mineral Resources Minister Susan Shabangu said the potential of shale gas exploration and exploitation provided an opportunity for South Africa to begin exploring the production of its own fuel, and could provide huge impetus for the industrialisation of the economy.

Ramontja said the regulations would be effective in dealing with the risks that shale gas exploration might pose to the environment.

Among other things, the draft regulations provide mechanisms for the assessment of the potential environmental impact of any proposed activities, for the protection of fresh water resources, and for the co-existence of shale gas exploitation and the Square Kilometre Array (SKA) project.

“The draft regulations, once finalised, will result in a regulatory framework that ensures safe extraction of gas, which will contribute to the diversification of South Africa’s energy mix, significantly boost South Africa’s economy and have positive effects on the country’s gross domestic product (GDP).”

Ramontja said the government would consult interested and affected stakeholders next month before finalising the regulations in order to allow exploration to begin.

While it was too soon to estimate the size of the country’s shale gas reserves, or the amount that shale gas exploration would contribute to the economy, he said that companies – both local and international – would not have shown such interest if they did not anticipate making profits.

Shale gas exploration would not only create a new industry, he said, but would also open up new research opportunities for South Africa’s universities.

Delivering his State of the Nation address to Parliament in February, President Jacob Zuma said the development of shale gas exploration would be “a game changer for the Karoo region and the South African economy … Having evaluated the risks and opportunities, the final regulations will be released soon and will be followed by the processing and granting of licences.”

And in his follow-up State of the Nation address in June, Zuma said the government was preparing the way for a “radical transformation” of South Africa’s energy sector as it moved to address one of the major constraints to faster economic growth in the country.

Hydraulic fracturing involves the extraction of gas trapped underground by using pressurised liquid to fracture rock. Opponents of the process argue that the economic benefits of accessing previously unavailable energy sources are outweighed by the potential environmental impacts, including contamination of ground water.

According to petroleum industry estimates, 2.5-million hydraulic fracturing jobs had been performed on oil and gas wells worldwide by 2012, more than one-million of them in the United States.

South Africa, according to recent estimates by the US Department of Energy, has the eighth-largest shale gas reserves in the world at 390-trillion cubic feet.

SAnews.gov.za and SAinfo reporter