SA could be energy self-sufficient in a decade: Shell

2011-09-01 14:28

South Africa could become “energy self-sufficient” within a decade if commercially producible gas volumes are discovered in the Karoo, the manager responsible for the Karoo fracking project said today.

“If exploration efforts prove that the shale contains commercially producible gas volumes, then South Africa could see production from this source within a decade,” Jan Willem Eggink, the upstream manager for Shell SA told the Cape Town Press Club.

“If the volumes are even half as large as the USA’s Energy Information Administration estimates, then South Africa can even become energy self-sufficient for decades to come.”

Eggink said however, that plans were at an early stage and Shell was “not sure” what it would find.

“We want to work with the people in the Karoo to find out if there is shale gas in commercial quantities,” he said.

Shell would invest around $200 million (about R1.4 billion) during the exploration phase alone, a “fraction” of what would be invested should the company proceed to the development stage.

The exploration programme, which has been criticised by environmental groups who claim it will harm the sensitive Karoo environment and poison underground water supplies, would involve the drilling of “at least” six wells within the first three-year licence period.

The wells would inform of whether the gas could be extracted in sufficient quantities to be commercially viable.

“If these show encouraging results, we will probably want to drill more exploration wells.

“These wells will be spread out across Shell’s licence areas such that we are better able to identify the area or areas with the greatest gas potential, the so-called ‘sweet spots’.”

Eggink said the discovery of shale gas in the Karoo would drive foreign investments, reduce carbon emissions and create thousands of jobs.

“We don’t yet know what we might find but believe a possible development could create thousands of jobs, training opportunities and academia partnerships,”

Eggink said gas could reduce or eradicate South Africa’s energy deficit and significantly reduce its carbon emissions.

The project could also drive much needed foreign investment, generate significant state revenues, and reduce import costs.

Rapid economic growth meant that electricity demand was rising.

A shortfall in generating capacity led to serious power cuts in 2008, and many rural areas still did not have a reliable supply.

Currently around 90% of electricity was generated from coal – more than any other industrialised country.

“In environmental terms, dependence on coal is less desirable – it’s one reason why South Africa’s CO2 emissions are relatively high,” Eggink said.

“Adding natural gas to the energy mix could help South Africa address these problems, as well as creating new jobs.”

By drawing on potential abundant domestic gas supplies, South Africa could meet rising energy demand while maintaining energy security.

“And you can use natural gas to cut carbon emissions too.”

Eggink said modern gas power plants generated up to 70% less CO2 than an “old-style coal-fired plant”.

Should the company receive a licence to explore, the next step would be to prepare and submit an environmental impact assessment, Eggink said.
This would include talking to people from the Karoo.

“We will engage with Karoo landowners regarding access to their land.

“We know that some people of the Karoo farming community are supportive and some are opposing the exploration project.”

The company was “committed” to paying fair compensation to landowners to access their land.

“We also want to ensure that farmers will benefit by having for instance better infrastructure, and possibly gas,” Eggink said.

The surface footprint of a shale gas development would be very small compared to the overall acreage that Shell has applied to explore in.

“Modern technology means we don’t need hundreds of wells over a large area when going into a possible development.

“We would typically need some 40-50 well pads with a maximum of 32 well heads per well pad, confined to just one percent of the total area covered by the licence application.
“Once the wells are drilled and fractured, relatively little on-site activity is necessary to keep the wells producing for 15 years or more.”

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