Fracking in South Africa

Fracking in South Africa is an energy production strategy at early stages of development using high-pressure drilling techniques to release natural gas trapped in shale rock. After initially imposing a moratorium on fracking in April 2011, the South African government lifted the moratorium in September 2012 after an initial investigation by an interdepartmental task team.Artel, Sabrina “South Africa Lifts Fracking Moratorium; Citizens Alarmed By U.S. Fracking Examples” Alternet. N.p., 24 Sept. 2012. Web. 14 Mar. 2014. Several energy companies were subsequently granted exploration licenses.Economist “Fracking the Karoo” The Economist. The Economist Newspaper, 18 Oct. 2012. Web. 14 Mar. 2014. Fracking in South Africa is a current topic of debate, with proponents pointing to substantial economic and energy benefits and opponents voicing concerns about potentially adverse environmental impacts.

History

Shale in the Karoo

The Karoo is the geographic area that is the focus of future hydraulic fracturing in South Africa, derived from a word in the local language meaning "dry".Jorritsma, Marie. "“Don’t Frack with Our Karoo”: Water, Landscape, and Congregational Song in Kroonvale, South Africa." Safundi: The Journal of South African and American Studies 13.3-4 (2012): 373-91. 27 Sept. 2012. Web. 30 Jan. 2014. Previously a lake 275 million years ago, shale gas began to form in the low-oxygen Karoo as organic mud accumulated.De Wit, Maarten J. "The Great Shale Debate in the Karoo." South African Journal of Science (2011): n. pag. 2011. Web. 30 Jan. 2014. As pressure increased over time, the organic material within the mud gradually turned into oil and gas trapped in shale rock. Estimates on how much gas is in the Karoo vary, with the Energy Information Administration (EIA) estimating reserves of 390 trillion cubic feet, which would make it the eighth largest reserve in the world. These figures, however, were based on desktop research and would only be refined through an extensive exploration programme In the present day, the Karoo is a semi-desert stretching over 400,000 square kilometers and home to a population of around 1 million people.Karoo Space “Karoo by numbers” Karoo Space. N.p., n.d. Web. 3 November. 2014.Pitock, Todd “In Arid South African Lands, Fracking Controversy Emerges.” E360.Yale.edu. Yale Environment 360, 4 Aug. 2011. Web. 30 Jan. 2014. The Karoo is divided into two regions: the Little Karoo, which is wet, and the Great Karoo, which is mainly desert. Because of certain exclusions, including topography and townships, around 28% of the Karoo has been estimated to be accessible to commercial development.Vermeulen, P.D. "A South African Perspective on Shale Gas Hydraulic Fracturing." Ed. McCullough, Lund, and Wyse. International Mine Water Association, 2012. Web. 30 Mar. 2014. Unique to the Karoo shale reserves is the presence of dolerite dykes intruding into targeted shale, which makes accessing the natural gas much more difficult and uncertain.

Government involvement While commercial interest did not come until 2008, oil companies have seen potential in the Karoo since the 1960s, when companies found “gas-bearing geological formations” in the area.Maylie, Devon. "Fracking Debate Racks South Africa." The Wall Street Journal. Dow Jones & Company, 5 Aug. 2012. Web. 30 Mar. 2014. However, because the formations were deep underground and technology was not advanced enough to pursue such interests, commercial interest did not follow until present days. The first application for energy exploration in the Karoo came in 2008 from Bundu Oil and Gas, but was not approved.Cropley, Ed “Insight: Water, Wealth and Whites.” Reuters. Thomson Reuters, 28 Oct. 2013. Web. 14 Mar. 2014. The next application from Royal Dutch Shell came in 2011, requesting 95,000 square kilometers of license rights. Vocal opposition from civil rights and environmental organisations, farmers and landowners in the Karoo lead to a government-placed moratorium on hydraulic fracturing in April 2011. Royal Dutch Shell has abandoned its application in April 2018.Shell retreating from aggressive fracking plans in South Africa After assembling a task team to evaluate the potential costs and benefits of hydraulic fracking in South Africa, Collins Chabane, minister in the president’s office, announced an end to the moratorium in September 2012.Feodoroff, Timothe, Jennifer Franco, and Ana Marie Rey Martinez.“Old Story, New Threat: Fracking and the Global Land Grab.” TNI.org. Transnational Institute, Oct. 2013. Web. 30 Jan. 2014. Amid much debate, draft regulations for hydraulic fracturing in South Africa were published in October 2013 by South Africa’s cabinet.Stoddard, Ed. “South Africa Proposes Rules for Fracking Shale Gas.” Reuters. Thomson Reuters, 10 Oct. 2013. Web. 14 Mar. 2014. Mineral Resources Minister Susan Shabangu proposed a two-year extension of the moratorium in February 2014 for designated areas, not affecting applications submitted prior to the initial moratorium of 2011 and has also banned fracking until the release of final regulations before governmental elections on May 7, 2014.Blaine, Sue. “Shabangu Wants Two-year Delay on Fracking.” Business Day Live. BDFM Publishers, 13 Feb. 2014. Web. 14 Mar. 2014. A news report on March 23, 2014, reported that the final regulations for hydraulic fracturing in South Africa would be released in the middle of April 2014.Forde, Fiona. "SA to Be Fracked within Weeks." IOL News. Independent Online, 23 Mar. 2014. Web. 30 Mar. 2014.

In March 2014, state legislation was passed that allowed for the state to claim 100% of mining ventures, which drastically changed the 20% claim that was initially envisioned in previous negotiations. Such state control has led to concerns about the potential for business improprieties similar to those committed by Enron in the United States.Allix, Mark. "Fracking Remains an Unknown Quantity in SA’s Future Energy Mix." Business Day Live. BDFM Publishers, 24 Mar. 2014. Web. 30 Mar. 2014. Regardless of the controlling party, the exploration process will last for approximately 2 years. If results that come from the exploration process promise worthwhile benefits, environmental impacts will be assessed and commercial fracking will occur, although it could take a decade to produce result.

Hydraulic fracturing process

In order to access the natural gas trapped by shale, vertical drilling is used to puncture deep boreholes to access deeply buried shale deposits.Kotze, Petro. "Hydraulic Fracturing: Adding to the Debate." The Water Wheel Groundwater Special Edition, 2013. Web. 30 Mar. 2014. As the casings are cemented in place, horizontal drilling starts to access the production zone.

Economic impacts One of the major arguments in favor of hydraulic fracturing in South Africa is that it could bring much needed economic benefits to the country. A national unemployment rate of around 25%, with the Karoo representing many of those unemployed, offers a large incentive for allowing hydraulic fracturing in the region. Unfortunately the majority of the unemployed are also unskilled and are unlikely to receive any jobs needed for the technical drilling operations 90% of electricity in South Africa is generated using coal, which many see as unsustainable, and even coal-generated electricity is unable to reach over 10% of the population.Hedden, Steve, Jonathan D. Moyer, and Jessica Rettig. “Fracking for Shale Gas in South Africa: Blessing or Curse?” African Futures Paper 9 (2013): n. pag. ISSAfrica.com. Dec. 2013. Web. 30 Jan. 2014. It is expected that shale gas would serve as an additional fossil fuel and would not replace the domestic use of coal or the extraction thereof. South Africa is largely dependent on foreign imports for crude-oil needs, with 70% being imported.Burkhardt, Paul. “South Africa Seen Facing Legal Battle Over Fracking Rules.” Bloomberg.com. Bloomberg, 16 Oct. 2013. Web. 14 Mar. 2014. Eskom Holdings Ltd. produces nearly all of South Africa’s electricity, but has struggled to meet demands. South Africa has experienced rolling blackouts as a result of energy infrastructure challenges, which disrupts crucial manufacturing and mining capabilities. According to recent research, a power generating capacity of 4,800 megawatts will be needed every five years for twenty years in order to keep up with rising energy demands in South Africa.

While South Africa slowly moves towards fracking, American petroleum company Anadarko made an offshore discovery of a potentially very large natural gas reserve that could drive production in Mozambique, which could make it a potential competitor with South Africa. South Africa is already involved in Mozambique through domestic oil company Sasol, which is developing turbines powered by gas fields in the country.

The economic benefits of fracking are claimed to be potentially immense. In a controversial study commissioned and paid for by Shell, one of the applicants to explore for shale gas in South Africa, developing one tenth of the estimated Karoo for fracking could generate 200 billion rand per year and create 700,000 jobs. Some characterize fracking as a more sustainable energy solution, avoiding the costs of emitting greenhouse gases into the atmosphere, of which South Africa is considered one of the “worst offenders globally.” Proponents are eager to meet the South African promise to reduce harmful gas emissions by 34% by 2020.

Controversy Opposition to hydraulic fracturing in South Africa led to the government-imposed moratorium on fracking in 2011. Since the moratorium has been lifted, opposition has continued. This has led to ongoing debate on what regulations will be imposed, who will enforce them, and how they will be enforced.Wild, Sarah. "Opposition to Fracking Peters out." Mail & Guardian. Mail & Guardian Online, 14 Feb. 2014. Web. 30 Mar. 2014. However, many opponents continue to fight for comprehensively halting shale exploration in the Karoo.

Economic concerns Some opponents of fracking in South Africa are skeptical of the economic benefits it may have. Some analysts have argued that the complicated process of pumping, purifying, and finding necessary materials (such as sand and water) needed for fracking activity imposes too many costs to make the venture profitable. Others are skeptical of the estimates of reserve quantities, economic benefits, and job creation. While estimates by the EIA originally had the Karoo holding 485 trillion cubic feet of shale gas, new estimates from the Petroleum Agency of South Africa now state the number to be closer to 40 trillion cubic feet.Gosling, Melanie. “Fracking Revenue Still Not Clear – Shell.” IOL SciTech. Independent Online, 11 Mar. 2014. Web. 14 Mar. 2014. A Shell-commissioned study still contends that such a number would yield returns of 9.6% of South Africa’s GDP. Farmers in the Karoo are also concerned that development in the area could damage the viability of agricultural work, disrupting the sensitive natural landscape they work in. Lastly, fracking rights are in conflict with a radio telescope planned to be placed where Shell wishes to frack. The telescope represents a $1.87 billion investment, and can only work if placed far away from industrial activity.

Environmental concerns