By Jacinta Moran | August 15, 2013 11:35 AM
Oil companies are gearing up to explore the riches of South Africa’s Karoo desert as the government prepares to award shale gas permits toward the beginning of next year, raising the stakes of the debate even further.
Far below the Karoo, a thirsty semi-desert stretching from the western coast of South Africa across a third of the country, lies a potential solution to the country’s energy woes.
It is believed that there are large reserves of natural gas trapped within the shale that could be tapped through fracking.
Figures from the Department of Mineral Resources estimate reserves of 485 trillion cubic feet, and if explored could satisfy the country’s future energy needs. The economic consultancy Econometrix estimates that if just 5% of South Africa’s resources were economically recoverable, this will add more than Rand 80 billion to the economy, or 3.3% to gross domestic product for 25 years. The entire coal mining industry in 2010 grew GDP by about 1.8%.
For a country plagued by recurrent power shortages combined with environmental concerns stemming from an overdependence on coal, shale gas offers a bridge fuel and a time respite needed to shift to a less carbon-intensive economy.
By weaning South Africa off coal, gas could be used as an alternative for power generation with cheaper cost and a relatively smaller carbon footprint to coal, particularly as the country has committed itself to reduce greenhouse gas emissions 34% by 2020.
In April 2011, a shale gas exploration moratorium was imposed by the South African government as a result of environmental groups such as the Treasure of the Karoo Action Group, which believe fracking will destroy the sensitive ecosystem and threaten agriculture in the area.
Though the moratorium was lifted by the government in 2012, the country still weighs the environmental risks against opportunities for economic development.
In the meantime, international oil companies such as Shell, Falcon Gas & Oil and Bundu Gas & Oil are eager to explore. Shell, which applied in 2011 to drill 24 exploratory wells, says it will spend $200 million on the exploration process in the event it gets the go-ahead to explore.
But the debate rages on as to what a fracked Karoo will look like.
Some fear that lure of energy dependence and the prospect of creating jobs in a country where unemployment is running at 25% will prove too tempting no matter how much damage is done in the process.
South Africans need to know how much gas can be extracted, at what cost and the economic and environmental benefit to fracking, as opposed to sourcing renewable energy.
Even when the permits are granted, it will take several years to develop this data, actual production, if positive results are found, is still many years away.
