October saw the gazetting by the Department of Mineral Resources of the regulations set to govern exploration for and production of shale gas in the Karoo basin, and the public has been invited to comment on this sensitive issue.
Viewed from the perspective of our country’s sustainable development, shale gas exploitation presents a difficult set of trade-offs that could affect both current and future generations in uneven ways. The major dimensions of sustainability – economic, social and environmental – should each be properly assessed.
The economic impact will depend, first of all, on the amount of gas that is produced. The US Energy Information Administration (EIA) in 2011 estimated South Africa’s technically recoverable resources (TRR) at 485- trillion cubic feet (tcf). This figure is still widely quoted, but, in June this year, the EIA published a revised assessment of 390 tcf. In any event, TRR refers to the quantity of gas that could theoretically be extracted using current technology, but only a fraction of this is likely to be translated into economically viable reserves.
Supposing substantial volumes of shale gas did flow, there would be diverse downstream economic benefits in terms of industries and consumers using the gas. However, a ‘reindustrialisation’, as envisaged by Mineral Resources Minister Susan Shabangu, would require an abundance of cheap gas that would change the competitiveness dynamics. But this remains speculative – until explo- ratory hydraulic fracturing actually takes place. It is quite possible that factors such as geological difficulties or a lack of supporting infrastructure could seriously limit the flow of gas.
One of the chief social issues is job creation potential. Drilling rigs require just a few highly skilled operators who, for the most part, will be brought in from other countries – not an army of local, unskilled workers. Hence, the major contribution to employment would be in the construction of related infrastructure (like roads and pipelines) and downstream gas-consuming activities. But other sectors in the Karoo, such as tourism and farming, could suffer job losses.
Another social aspect is the impact on the lives and culture of local communities. In the US, many small towns have gone through spectacular booms and busts as the drilling rigs have come and gone, leaving a scarred landscape and disrupted communities.
Even more contentious are the potential environmental impacts. Water is arguably South Africa’s scarcest critical resource, and none of the exploration companies has provided a credible analysis of where the prodigious quantities of water required for fracking are going to be sourced, and what the cost to competing sectors would be. The possible contamination of water supplies by toxic fracking fluids and fugitive greenhouse-gas emissions are also serious considerations warranting further study.
The dilemma is that the economic benefits of shale gas production would last a limited time – perhaps a couple of decades – while in the worst case water pollution could potentially render parts of the land unsuit- able for farming and even human habitation for perhaps a couple of centuries or more. In other words, there are uncertain trade- offs between the welfare of current and future generations as well as contestation between potential winners and losers in the present.
Government is clearly very much in favour of shale gas. This is not surprising, as politi- cians are often disposed to back initiatives that might widely be viewed as beneficial to the majority of the population, especially their constituents, more so in the run-up to a national election. Further, government has a growing agenda of resource nationalism, as was made clear recently in the Mineral and Petroleum Resources Development Amendment Bill.
State-owned oil and gas company PetroSA is understandably keen to get in on the shale act, especially considering the rapid depletion of the gasfields feeding its Mossel Bay gas-to-liquids refinery.
As citizens, we should insist that our elected representatives give adequate attention to the numerous implications of shale gas development and inform the public accordingly. Has government learned the lessons of other mineral resource exploitation lega- cies, such as acid mine drainage? Can we trust the Minister’s promises that international regulatory benchmarks will be effectively enforced and fracked areas will be fully rehabilitated? What is the likelihood and impact factor of water contamination?
We need to guard against accepting the promises of abundance made by those with vested interests and acknowledge the extensive uncertainties surrounding the size of viable reserves and the economic, social and environmental consequences of tapping them.
We need an independent, scientific body consisting of sector experts drawn from credible, nonpartisan institutions – not merely a task team of government officials and industry insiders – to undertake a thorough, balanced analysis and risk assessment of all the pros and cons of shale gas development in relation to those of alternative energy sources, such as solar. And shale gas should not distract us from the necessity of energy conservation and efficiency.