According to government, Free State farmers might be sitting on a gold mine of a different nature: 23 billion cubic feet of gas.
But Free State farmers are upset about applications for the exploration of oil and gas on their farms, with some farmers already having raised objections at more than one community meeting.
Preliminary reports on the two latest exploration applications, which cover an area of more than 700 000 hectares, are to be released soon.
All affected parties have 30 days to comment on the reports, according to Zizo Siwendu, an environmental consultant at Environmental Impact Management Services, the company appointed by the exploration companies to perform the environmental impact studies.
Farmers are concerned the mining of gas and oil will turn the Free State into a “second Mpumalanga”, where the mining industry has been detrimental to agriculture and the economy.
“If mining [in Mpumalanga] continues at the current rate, about 12% of South Africa’s high-potential farm land will be destroyed,” reads a report by the Centre for Environmental Rights released in May.
By 2014, there had been applications for prospecting and mining rights on about 61.3% of the surface area of Mpumalanga, according to the report.
But according to Mthozami Xiphu, the executive chairperson of the SA Oil & Gas Alliance, oil and gas extraction could boost the economy.
“We need energy security. It will also create jobs. We want to see more jobs in this industry,” he said.
Xiphu said the increase in exploration applications can be attributed to the Mineral and Petroleum Resources Development Act, which was implemented
The Petroleum Agency of SA (Pasa) has been marketing underground gas since 2008 and government is hoping to build several gas power stations across the country in the medium term.
There are various applications for exploration across South Africa, of which at least four are in the Free State.
According to acting Pasa CEO Lindiwe Mekwe, geological data show there are about 23 billion cubic feet of gas in the Free State, but this can only be confirmed through exploration.
This amount of gas is enough to operate a 40MW gas power station for 20 years, according to Craig Morkel, a project director at iKapa Energy.
South Africa’s total capacity is about 40 000MW, according to Bloomberg.
The estimation in the Free State is considerably less than the Pasa estimation of 40 000 billion cubic feet of shale gas in the Karoo.
None of the applications in the Free State is for shale gas, which would make fracking necessary. Regular gas is cheaper and easier to mine.
The two applications open for comment are:
- The mining, oil and gas company Sungu Sungu Gas applied for exploration rights for oil and gas covering an area of about 565 000ha south of Memel, north of Winterton, east of Swinburne and west of Watersmeet.
- Motuane Energy’s application covers an area of about 149 377ha north of Theunissen, east of Virginia and Hennenman, and south of Kroonstad.
According to Siwendu, these applications are at a stage where the broad outlines of the possible effect on water and biodiversity, for instance, are determined.
This will be studied in more detail during the environmental impact study, which is the next phase.
Farmers will then have an opportunity to comment once more, and exploration will only commence if and when Pasa approves the application.
Should enough gas or oil be found that could be easily mined and become economically viable, companies can apply to begin mining.
This process could take up to 10 years, said Jacobus Stroebel, a legal adviser at Free State Agriculture.
According to him, legislation in this regard stipulates that the portion of a farm where gas or oil is found can be expropriated. Farmers may be compensated
for the land, but they won’t necessarily get a good price for it.
Nic Opperman, the director of natural resources at Agri SA, said that when weighing up the contribution of exploration and the contribution of agriculture against each other, it has to be kept in mind that the life span of a mine is limited. Opperman was also concerned that environmental protection legislation was not being enforced properly.
Apart from the applications now open for comments, there are two more exploration applications in the Free State, both by Rhino Oil & Gas, which span areas of 1 314 662ha and 1 500 000ha.
According to Mekwe, farmers shouldn’t raise ghosts when it came to oil and gas.
“The extent and nature of exploration and production of oil and gas cannot be compared to that of mining operations,” he said.