Shale gas exploration and production in South Africa was likely to result in a significant contribution to the country’s economy, with one of the most significant impacts coming from the participation of companies in associations federated to Steel and Engineering Industries Federation of South Africa (Seifsa) in the establishment of facilities.

Seifsa, which represents 27 independent associations employing almost 200 000 people, said in a statement on Thursday that shale gas production would also make a major contribution to the country’s energy needs while reducing greenhouse-gas emissions and carbon intensity. Shale gas had the potential to contribute as much as half of South Africa’s current electricity needs.

Seifsa executive director Kaizer Nyatsumba said shale gas production should result in cheaper energy, which should benefit energy-intensive businesses in the metals and engineering industries. “That should enable companies in these industries to regain their international competitiveness lost over the last few years.

“With careful design, the domestic spin-offs can be substantially more than just the construction impact."

He said further that the South African metals and engineering industries had contributed substantially to the building of integrated energy and chemicals company Sasol’s plants, national oil company PetroSA’s gas-to-liquids refinery Mossgas and other refining facilities.

“Similarly, demand from such [shale gas-related] activities will stimulate job creation and add to the continuity of activities related to infrastructure expansion, which is crucial for sustained employment,” Nyatsumba added.

According to the National Development Plan, the overall environmental costs and benefits of hydraulic fracturing outweighed the current costs and benefits associated with South Africa’s dependence on coal and nuclear energy, Seifsa pointed out.

South Africa, Nyatsumba commented, was currently heavily dependent on imported liquid fuels, with the diesel-using open-cycle gas turbines used to augment electricity generation capacity in peak demand periods adding to the import dependency. “Substitution of diesel with liquid gas fuel will make a positive contribution,” he concluded.