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Message: Re:Karoo - Shale gas can be a game changer
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THE Karoo already has the electricity infrastructure to take full advantage of energy derived from shale gas.

The US by last year "inadvertently" reached 1997 Kyoto Protocol carbon dioxide emission reduction targets without ratifying the international climate change agreement. This was due to its stagnant economy after the global markets crash, and also because of its shale gas boom.

These are a few of the "facts" that came out of the Shale Gas World Africa conference in Johannesburg this month. The event was part of the Power and Electricity World Africa convention in Sandton, preceded last month by the Africa Energy Indaba conference, and followed by the Nuclear Africa 2014 conference held in Midrand.

There is a tremendous amount of energy going into African energy conferences these days. US deputy secretary of energy Daniel Poneman was in Cape Town last week to deliver the keynote speech at this year’s Power-Gen Africa energy conference. The visit came ahead of US Energy Secretary Ernest Moniz’s co-hosting of the US-Africa Energy Ministerial conference in Ethiopia in June, highlighting US President Barack Obama’s "Power Africa" initiative.

Amid the crosscurrents flowing through Africa, two things stand out. First, South Africa generates nearly 10 times the energy of hugely populated and economically fast-growing Nigeria, yet does not have nearly enough power to meet its needs. Second, the potential of hydraulic fracturing, or "fracking" — the extraction of shale gas and also "tight" oil — may ease South Africa’s excessive energy demands. Since 2003 technological advances in fracking have put Americans on a path to "cheap" energy independence.

Ebrahim Takolia, CEO of the South African Oil & Gas Alliance, says it will take South Africa seven to 10 years to ramp up to commercial-scale shale gas output. The body, a public and private sector industry partnership, says there is limited room for South African industry in upstream exploration. Things get better downstream.

South Africa gets only 2% of its energy from gas. But with through-the-cycle start-up costs — from exploration to refining to production — of up to R140bn, South Africa will be able to produce commercial amounts of shale gas.

Paul Eardley-Taylor, head of oil and gas South Africa at Standard Bank, says development of US shale gas has changed American and global energy markets. But it may be "impossible" to replicate elsewhere because the US had an existing gas pipeline network, private ownership of subsurface minerals, and huge experience of onshore drilling and oil field services.

But the possible job and wealth multipliers of South Africa’s shale gas potential is seen as a "game-changer" for Southern Africa.

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