By Donwald Pressly
Well over a year since Mineral Resources Minister Susan Shabangu first placed a moratorium on exploration to assess the potential for hydraulic fracturing for gas in the Karoo, there is still a deafening silence on the matter from the government.
There is no doubt that the process of fracking, as it is colloquially known, is controversial, with concerns about the environmental impact of the chemicals used with vast quantities of water to blast at shale rock to release the gas deep underground. But the manner in which the government – in particular the Mineral Resources Department – has dealt with it has left everyone in the industry hanging.
Royal Dutch Shell, in particular, is poised to spend hundreds of millions of rand on exploration, but it is not even sure that the moratorium is still in place. In the absence of the minister saying anything about it, it is assumed the moratorium remains in place, although it was supposed to have expired by the end of February.
The last thing she said about fracking was that the report by a task team would be placed before cabinet imminently. Yesterday cabinet spokesman Jimmy Manyi said the report had not been placed at this week’s meeting of cabinet, but acknowledged that its appearance was overdue. Questions would be put to the Mineral Resources Department, he pledged.
Of course, the exploration companies themselves believe that the process will be done with the minimum of damage to the environment. It is natural that they would believe so. The Treasure the Karoo Action Group, an anti-fracking lobby group led by writer and environmentalist Jonathan Deale, believes the consequences of fracking will be dire. There is a real possibility of water being contaminated in an environment that is semi-desert, it argues. While Deale suggests tapping into alternative forms of energy, an Econometrix study commissioned by Shell argued fracking could contribute up to R90 billion in government revenue and generate 700 000 permanent jobs over 25 years.
The New York Review of Books recently begged the question: “Why not frack?”, in which author Bill McKibben argued that regulators could not keep an accurate count of the number of wells or keep up with the waste products in an environment in which the political power of the industry continued to grow. He pointed to the inauguration of a new governor of Pennsylvania, Republican Tom Corbett, who allegedly had taken more gas industry contributions than all his competitors combined. Corbett claims that regulation of the industry is too rigorous.
Here in South Africa, the DA’s energy spokesman, David Ross, argues that if the moratorium on fracking exploration in the Karoo is lifted, “the ANC could earn a fortune”. He reports that the ANC-linked Batho Batho Trust has a 51 percent stake in Thebe Investments, Shell South Africa’s local empowerment partner. Through Thebe, the trust has a 12 percent stake in Shell SA refining and a 14 percent stake in Shell SA marketing, reports Ross.
A Shell spokeswoman said it was important to understand that Thebe’s shareholding was in the downstream business – from refinery to retail – and not the upstream business of extraction, production up to refinery. “These are entirely separate businesses,” the spokeswoman said. “In other words, any funds generated from the Karoo project would not flow to Thebe or Batho Batho.”
It is not clear why the government processes are so secretive, but surely greater transparency is the way to go?
