Sep 11, 2012
Shale licensing to proceed, but exploratory fracking prohibited for nowBack
Engineering|Africa|Chesapeake|DST|Eskom|Exploration|Flow|Gas|Karoo Action Group|Mineral Resources|Mining|Petroleum|PROJECT|Resources|Shell|Statoil|Systems|Water|Africa|South Africa|Square Kilometre Array|Coordination Systems|Energy|Energy Supply Considerations|Flow|Potential Shale-gas Investors|Shale Gas Mining|Shale-gas Licence Applications|Systems|Unconventional Gas|Environmental|Drilling|Jonathan Deal|Susan Shabangu|Operations|South Africa|Fracturing
© Reuse this
Mineral Resources Minister Susan Shabangu clarified normal exploration to include “drilling”, as well as geophysical and geochemical mapping. But exploratory fracking would not be allowed during the 6 to 12 months it would take to formulate “appropriate regulations, controls and coordination systems”.
Both drilling and fracking are integral to the shale-gas exploration process, with the drilling used to confirm the existence of the shale formations and fracking to prove whether the gas will indeed flow from the shale.
No timeframes were offered for the issuance of licences, nor for the start of a broad-based consultation process that had been stipulated by Cabinet when it gave the now contextualised “conditional” approval to fracking at its meeting of September 4.
A monitoring committee would be established to oversee the augmentation of the mining regulations, as well as to supervise possible fracking operations, Shabangu said, quoting from Cabinet-endorsed recommendations arising from a task team probe of the potential and appropriateness of allowing fracking in South Africa. This committee had not yet been appointed.
The task team had comprised representatives from the departments of Mineral Resources, Environmental and Water Affairs, Energy and Science and Technology (DST), as well as from Eskom, the Council for Geoscience, the Water Research Commission and the Square Kilometre Array (SKA). It also included academics from the universities of the Free State and Western Cape.
The report also called for collaboration between the DMR and the DST to ensure “co-existence” between the SKA radio astronomy research and any shale gas mining, as well as for further geohydrology investigation.
Shabangu also insisted that a far-reaching consultation process would be pursued on the basis of Cabinet’s cautious endorsement of fracking and the inclusion of unconventional gas into South Africa’s future energy supply considerations.
A number of questions were posed at the briefing, including by the Treasure the Karoo Action Group’s Jonathan Deal, about the fact that the consultation and regulatory strengthening processes had been sequenced in parallel with the licensing process and possible limited exploration.
But Shabangu insisted that government had no previous mandate, or basis, for consultation, which the task team report now provided. Government would consider amending its processes should well-founded suggestions and objections be raised during consultations with affected parties and stakeholders.
The Minister stressed the licensing would proceed in line with the administrative guidelines of South Africa’s Mineral and Petroleum Resources Development Act, which made it incumbent upon the DMR to consider the merits of five applications received to date. Failure to do so could result in court challenges by the applicants.
Shabangu refused to confirm the names of the applicants, stating that the department would need to reconfirm whether all the applicants remained interested. It is known, though, that Shell South Africa has made application to the department, while names such as Anglo American, Bundu, Falcon Energy, Chesapeake and Statoil have also been linked to the process. Sasol also applied in a joint venture with Statoil and Chesapeake, but withdrew following a desktop evaluation of the project's technical feasibility.
Shell South Africa upstream GM Jan Eggink told Engineering News Online that the prohibition of exploratory fracking during the period when the monitoring committee and new regulations were being established and finalised was not a worry for Shell.
The group still needed to secure an exploration licence and complete an environmental-impact assessment (EIA) for the exploration wells, which could take up to two years to finalise. Shell is yet to go out to tender for an independent consultant to conduct the EIA.
“What the Minister has proposed, therefore, makes sense. She wants to set up a monitoring committee and before that monitoring committee is installed you wouldn’t like hydraulic fracturing to start, because it is there to oversee that process,” Eggink added.
But in the longer run, an exploration permit that disallowed fracking activities would “not be a very valuable licence to hold”.
The full task team report, entitled ‘Investigation of Hydraulic Fracturing in the Karoo Basin of South Africa’, would be made available once it had been edited. But the executive summary, which was released, argued that conditional fracking was considered more appropriate than an outright ban or unconditional sanction.
The report highlighted the risks posed to water resources and astronomy research, but said that the socioeconomic and energy benefits could be material.
Edited by: Creamer Media Reporter© Reuse this Comment Guidelines (150 word limit)
Updated 4 hours ago The contraction in the metals and engineering sector is worsening, the Steel and Engineering Industries Federation of Southern Africa (Seifsa) warned on Thursday. Speaking after the release of production numbers by Statistics South Africa, Seifsa chief economist Henk...
Updated 5 hours ago Local innovation will undoubtedly provide solutions to many of the challenges faced by Africa, as it sets the tone for progress and enables businesses to gain a competitive advantage, create additional jobs and change peoples’ lives. Speaking as part of a panellist...
Updated 5 hours ago Zambia and Zimbabwe drew more water than they should have from the Kariba dam to generate electricity, draining the reservoir to 29% of its capacity in September, compared with 70% capacity last year, an engineering body said on Thursday. The Zambezi River Authority...
Recent Research Reports
Liquid Fuels 2015: A review of South Africa's liquid fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2015 Report examines these issues in the context of South Africa’s business environment; oil and gas exploration; fuel pricing; the development of the country’s biofuels industry; the logistics of transporting liquid fuels; and...
Road and Rail 2015: A review of South Africa's road and rail sectors (PDF Report)
Creamer Media’s Road and Rail 2015 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail infrastructure and network, the funding and maintenance of these respective networks, and...
Defence 2015: A review of South Africa's defence sector (PDF Report)
Creamer Media’s Coal 2015 report examines South Africa’s coal industry with regards to the business environment, the key participants in the sector, local demand, export sales and coal logistics, projects being undertaken by the large and smaller participants in the...
Real Economy Year Book 2015 (PDF Report)
There are very few beacons of hope on South Africa’s economic horizon. Economic growth is weak, unemployment is rising, electricity supply is insufficient to meet demand and/or spur growth, with poor prospects for many of the commodities mined and exported. However,...
Real Economy Insight: Automotive 2015 (PDF Report)
Creamer Media’s Real Economy Year Book comprises separate reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, gold, iron-ore and platinum sectors.
Real Economy Insight: Water 2015 (PDF Report)
Creamer Media’s Real Economy Year Book has been divided into individual reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, coal, gold, iron-ore and platinum sectors.
This Week's Magazine
Black-owned investment holding company Sphere Holdings plans to raise a further R1-billion in the coming months in support of its strategy to become a leading black industrial enterprise, which could ultimately seek a listing on the JSE.
Energy analyst and EE Publishers MD Chris Yelland warned recently against excessive optimism regarding timescales for the proposed construction of new nuclear power plants (NPPs) in South Africa. He was speaking at a Nuclear Roundtable in Johannesburg. “I think we...
Malawi’s Lilongwe Water Board (LWB) is inviting eligible bidders to prequalify for the board’s efficiency improvement works, which will be implemented as part of the E24-million Lilongwe Water Resources Efficiency Programme. LWB CEO Alfonso Chikuni explains that...
CROATIA, AN EU MEMBER BUT NOT A TDCA MEMBER On July 1, 2013, Croatia officially became the twenty-eighth member of the European Union (EU). Despite Croatia’s accession into the EU, it is yet to become party to the Trade, Development and Cooperation Agreement (TDCA)...
The Council for Scientific and Industrial Research (CSIR) has announced that its new Inundu airborne electronics testing, evaluation and training pod had made its first test flight on September 10. The successful flight was undertaken from Lanseria International...