Fracking....a close reality

2014-03-24 11:29
Fracking rig. (File, AP)

Fracking rig. (File, AP)

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Cape Town - Fracking is one step closer to becoming a reality, as government moves closer to shale gas exploration in the Karoo.

Seen as a possible game changer for our economy by government, IOL reports that fracking regulations will be published in April.

It is suggested that once the regulations are out the search for this new energy source will be in full swing.

President Jacob Zuma has stated that once the risks and advantages have been evaluated and regulations have been created then licences will be released.

Waiting in the wings is Royal Dutch Shell who hopes to obtain an exploratory fracking licence in the Karoo.  

The company is prepared to spend close to R1bn in the exploration process and it is estimated a few hundred jobs will be created.

In essence Shell will be working for government and any reserves they find will be the property of government. This is according to the Mineral, Petroleum and Resources Development Act.

If Shell finds considerable resources they will then receive a preference in future fracking rights in the Karoo.

The actual amount of shale gas present in the Karoo has yet to be fully quantified but a study done some years ago by Econometrix suggests that there is 485 trillion cubic feet (tcf) of gas.

Majority ownership

The Petroleum Agency of South Africa has since estimated that there may only be 40tcf of shale gas present in the Karoo.

Anthony Leiman who is an economics professor at UCT says that no one knows exactly how much gas is present in the Karoo, that amount will only be available once the exploratory phase begins.

In order to determine the amount of shale gas present in the Karoo fracking has to be done, says Leiman.

Fracking in the Karoo is a contentious issue with various environmental groups and residents’ arguing the negative impact the exploration and mining will do on the environment.

The main fear is the possibility of water contamination to already very scarce water supplies.

According to IOL the initial amount of water used during the fracking exploratory process will be minimal; the water used during the later chemical processes will be substantially high and causes concern.

How the contaminated water will be disposed off is also another issue for groups.

Getting rid of this water has been a topic that Shell has yet to highlight fully.

Various groups and academics argue that oil companies will be the main party, that will eventually benefit from the gas exploration.

New legislation in South Africa states that government may claim 100% of all revenues from new petroleum and mining ventures.

Peter Leon a mining lawyer states that the 80% request of ownership by the portfolio committee on mining was a surprise to various energy companies.

It was believed that the state would require only 30% of gas revenues.
Read more on:    shell  |  cape town  |  environment  |  fracking

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