Shale gas could end SA's oil dependence

Johannesburg - South Africa’s shale gas reserves in the Karoo represent the world's fourth-largest resource of this valuable form of energy and are sufficient to end the country's dependence on crude oil.

If Shell and Sasol’s controversial exploration work should result in the shale-gas resources being developed, this could have far-reaching consequences.

It would not only create hundreds of thousands of jobs, but also break Eskom's dependence on coal to generate electricity, dramatically reduce South Africa's carbon bisulphide emissions, and even make hundreds of small-scale manufacturing industries sustainable.

That is the view of Professor Philip Lloyd, who heads the Energy Institute at the Cape Peninsula University of Technology, and gives a new perspective to the emotional debate on shale-gas extraction since Shell applied in February for an exploration licence for this valuable energy resource in the environs of Graaff-Reinet.

If the exploration indicates that the gas can be exploited, this will totally alter the structure of our country's economy, said Lloyd during a debate in Midrand. The debate was being held on the temporary prohibition of scale-gas exploration imposed by government in March.

Lloyd believed Shell should be congratulated for its willingness to invest in this expensive process, although he also reckoned that operations needed to be strictly regulated.

If Shell should succeed with its exploration, said Lloyd, jobs would be created on a scale never before seen in South Africa. It would also bring about a large decline in greenhouse gas emissions in this country.

According to the United States Geological Survey (USGS), which maintains global surveys of energy resources, Karoo shale gas is the fourth largest resource in the world. It was originally estimated that there was about 1 000 trillion cubic feet (tcf) of shale gas in the Karoo, but geological data collected over the years have reduced this to about 450 tcf.

The tcf unit is an abbreviation used in oil and exploitation to indicate the size of gas resources. It represents a million, million cubic feet.

This is enormous. Mossgas was built on the supposition that there was at most 1 tcf in the undersea gas resource feeding that plant.

If the Karoo resource is even close to the amount indicated by the USGS, South Africa would be able to erect gas turbines for electricity generation all along the coastline. This would end the country’s dependence on coal to generate electricity.

The exploration work on developing infrastructure to exploit the gas would take about five years. Building gas turbines to generate electricity would take at most two years.

Shale gas is also the best available reducing agent for iron ore. New steel works could be created on the Sishen-Saldanha iron ore route, as “beautiful steel” could be manufactured using it, said Lloyd.

More than 40m tons of iron ore is exported along the Sishen-Saldanha route to Asia and Europe. Lump iron ore from Sishen is some of the most sought-after iron ore globally, but cannot be processed into steel here because of the cost, particularly that of energy for heat for the reduction process.

Lloyd said that he considered the country's shale-gas resource large enough to feed several gas-to-liquid-fuel plants to produce fuel. This could in fact make South Africa totally independent of imported crude oil, he said.

Natural gas is also exceptionally suited as an energy resource for manufacturing in small industries such as those for bricks, tiles, cement, ceramics, bakeries and galvanised sheet metal.

Many years ago Sasol [JSE:SOL] began importing natural gas from Mozambique to Secunda. It was a relatively small quantity, but the demand became so big that Sasol recently decided to increase imports by 50%. By-products of Sasol's sales, according to Lloyd's research, have already stimulated 350 new small companies.

One of the other participants in the debate, Dr Chris Hartnody, a geologist from Umvoto, a non-governmental organisation, warned that the hydrological fracturing (fracking) processes used to exploit shale gas could lead to earthquakes in the Karoo. But Lloyd pointed out that the Karoo was “accustomed” to drilling – there are hundreds of water boreholes in the semi desert region. He also rejected the widespread environmental fears of pollution.

There is little evidence that fracturing has ever polluted underground water. Shale rock is extremely deep and the boreholes used for hydraulic fracturing have to be absolutely impermeable – or the shale rock cannot be fractured, said Lloyd.

Boreholes have up to five layers of steel and cement casings to ensure that they are 100% impermeable.

Lloyd has researched the environmental issues regarding hydraulic fracturing for shale gas in the US and Canada. Most environmental problems arise from the dumping of secondary waste products, but this can be controlled through regulation, he said.

There is little evidence that fracking contaminates underground water sources, he declared. Underground water is almost always shallow, while shale gas is very deep.

The holes are usually 5 000 to 7 000 metres underground, and fracking is done in horizontal stopes at the deepest point.

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