Economist: Get cracking on fracking

2012-03-02 13:12

Johannesburg - South Africa needs to get moving on exploring the potential of its suspected shale gas fields in the Karoo, a top economist said on Friday.

Speaking at an event sponsored by Shell - the oil company that is seeking permission to start test fracking for the gas - Econometrix economist Tony Twine said this had to happen soon if the country hoped to meet its future energy needs and boost its coffers.

"This is big stuff in terms of contribution to GDP, in terms of employment potential. Even if the gas finds turn out to be a lot smaller than the estimate... we are talking about a mighty big fish," he said.

Econometrix was commissioned to produce a report on the macroeconomics of the project. First discovered by Soekor in 1967, the Karoo shale gas was currently only a "suspected resource" of about 13.7 trillion cubic metres.

"To get the production rolling by the early part of the 2020s, we have got to start exploring soon," Twine said.

"Even under modest growth of the South African economy, we are going to need this exploration and a decision to move it or not with minimum delay."

Environmental impact

If the amount of shale gas - lying about 4 000m to 5 000m below the Karoo surface - was confirmed, it could provide the equivalent of 400 years' worth of energy consumption in SA.

"This is a big chicken; she is a big puppy," Twine said.

Information was needed to confirm the size of the resource and the distribution of the shale gas.

However, concerns over the environmental impact of fracking - the technique used to remove the gas, also called hydraulic fracturing - had dominated much of the debate around the planned project.

Fracking involves pumping a mixture of water, sand and chemicals at high pressure down a borehole into the rock strata containing the shale gas. The process releases the gas, which flows out up the borehole to the surface, where it is captured and contained.

Twine said the project could lead to the creation of up to 700 000 jobs in a proposed first phase to 2035, after the initial proposed nine-year exploration period.

Speaking at the event, Shell's commercial general manager in South Africa, Bonang Mohale, said his company had been working in the industry for many years, and understood the environmental risks involved with fracking.

It also knew how to mitigate them.

He said that if the project was approved, it could address the "energy poverty" experienced by at least 10 million people in SA.

"I think this will be bigger than the discovery of gold in Gauteng."

Mohale said Shell accepted the government's moratorium on the project.

"Democracy presupposes that the majority view will prevail."

Asked if Shell was worried about possible nationalisation of the resource, Mohale responded: "If we were worried, we would not be pouring so much money into this."

  • ludlowdj - 2012-03-02 13:24

    Internationally fracking is a big no no, Shell as usual will do anything to secure a profit.

      Citizen - 2012-03-02 14:48

      I lost all my respect for Tony Twine after this ;Shell sponsored drivel' that he spouts

  • JudithNkwe - 2012-03-02 13:28

    I note "sponsored by Shell". Fracking is a big no no and will destroy a very fragile part of our country and provide almost no jobs.

  • Andrew - 2012-03-02 13:34

    Aah yes $Hell the""greenest" of all energy companies lets ask the Niger Delta how well they have managed the environment there and if so safe why will they not place guarantees on not polluting the underground aquifers. Twine sounds like a big chicken with his head in the sand but then big oils big money can make some people say anything.

      Ernst - 2012-03-02 13:39

      Well said.

  • Horst - 2012-03-02 13:35

    Yes, yes, let's frack. It may mean that we close down some coal mines, the end result will still be a cleaner environment.

  • Peter - 2012-03-02 13:42

    Economists are trained to measure all things in rands and cents, they do not understand or care about environmental issues. We also need to look after the economics of our environment, we have only one planet to live on. We are busy breaking it, will monetary wealth be able to save us when it is irreverably damaged beyond being able to support the human population? Short sighted creatures, humans.

  • S - 2012-03-02 13:50

    Pardon me if I'm insensitive, but Tony Twine is blind, so he has obviously not seen the environmental carnage brought about by Shell and others in their fracking adventures. No wonder Shell chose him as a stooge in their "sponsored event".

  • Barry - 2012-03-02 13:51

    Frack off, there is far too much environmental damage. Shell has done enough damage world wide we don't want it here, go frack back in the Netherlands

      Gert - 2012-03-02 15:17

      Shell is a persistant cancer that will go on and on and on to influence and lure fools into their oily muddy pool of greed regarding this fracking business. Even Sasol at one stage gave it the nod. They will wait for the public to get tired and give in and then they are in the pounds seat. One morning the papers will have headlines of contracts concluded and the revelations of scandals will follow 4 years later, but the damage would have been done. The people have the power-if Shell is to understand their PR situation is on thin ice or a slippery oily surface here in SA and they may lose customers then maybe they will wake up.

      Adil Smit - 2012-03-02 15:51

      No wait, they can't go and do fracking in the Netherlands as there is a moratorium on it there.

  • Johan - 2012-03-02 13:58

    $hell, julle kan gaan vrek man.

  • vanbaal1 - 2012-03-02 14:13

    Could produce 700,000 jobs, yeh right where have we heard these big promises before. Also I wonder what Shell paid Tony Twine to promote fracking, as they sponsored the event. Every day we hear of back-hands, kick-backs only to further self interest. Situation stinks!

  • Gert - 2012-03-02 14:53

    SA NEEDS TO START CRACKING THE WHIP on uninformed people like Tony to stop advocating the destruction of nature. He as a very intelligent person should realize that the future in tourism will present far more for SA in the long run than a 8 year solution with no real advantage for long term employment. Let the whole world out there Frack up their countries and then SA will be the only place left for back to nature tourism.

  • Karel - 2012-03-02 19:45

    Federal Scientists Warn NY of Fracking Risks. U.S. Geological Survey has warned New York state regulators that their plan to allow drilling and hydraulic fracturing for natural gas in the Marcellus Shale could endanger private water wells, municipal aquifers and New York City’s That is in 2012. Tony Twine is out of touch with reality. Drinking water supply. If New York City’s drinking water supply is contaminated by drilling, cleaning up the water would require a water filtration plant costing at least $8 billion, with a yearly operating expense of $200 million.2 Even then, city officials have said there is no guarantee that the water could be purified

  • Karel - 2012-03-02 19:49

    Does Tony know what the costs of acidifying, ozone and smog precursor air pollutants will be on the biomes in the Karoo. Will the habitat once polluted and fragmented be resilient to global warming and offer the present food security and tourism not to mention future water security and renewable energy. No answers there.

  • Craig - 2012-03-03 08:32

    Sponsored by by Shell.... Says it all!!!! Tony Twine Is an absolute Ass! There are far better and green ways for maximal usage of the Karoo. Solar farms! Give the sheep some shape and get power as well... Win Win :-)

  • thedobrev - 2012-03-03 16:03

    People. Watch GASLAND.

  • selvum.pillay - 2012-03-05 15:54

    Tony Twine needs to look at the current problem in America. It is suspected that the ground water is being contaminated by this so-called fracking that is being done by Shell.I believe these people are just securing a profit and will leave the country to live peacefully somewhere else.

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