Karoo fracking may get bogged down in court

  • 28/05/2017

  • Business Day (South Africa)

With fracking in the Karoo having received the green light, environmental groups concerned about water contamination and depletion say they will fight tooth and nail to make sure it does not happen. The Department of Water and Sanitation intends issuing fracking licences by September, but may be stopped by court cases brought by the groups. Royal Dutch Shell, Falcon Oil & Gas and Bundu Gas and Oil Exploration are eyeing the exploration of natural gas trapped in shale rock formations in the Karoo. Matthew Burnell, director of the environmental practice at Herbert Smith Freehills, says the environmentalists have huge support from communities in the Karoo and could take the issue to court in the hope that the companies will be discouraged from going ahead with the project. "Even if an appeal is dismissed, they can still get it back to court on review and that’s where I fear a potential delay … you could slow the process down at least by two years," he says. The process is already lengthy. After licences are issued, there will be exploration for two to three years, then construction for another two to three years. It could take between seven and 10 years before production starts. Burnell says that although the companies must meet government requirements and conduct consultations, environmentalists will still oppose fracking as their mandate is conservation. "It’s not a question of mitigating the environmental impact; they just don’t want it at all." Fracking go-ahead in Karoo basin ‘possible within months’ Five licence applications under review for exploration in the Karoo could succeed under Mineral Resources Minister Mosebenzi Zwane National 13 days ago Although there are economic benefits to fracking, including socioeconomic upliftment, jobs and the lease of land, environmentalists say the risks outweigh them. Herman Neethling, Shell SA GM for upstream and liquefied natural gas, says there are several opportunities for a good energy mix in SA. Although there are no cost estimates yet, shale gas generally sells at low prices and the project will create about 60,000 jobs. He says Shell will have "continuous engagement" with stakeholders about meeting the requirements and standards for safety and responsibility. There are no official estimates on the volume of shale gas in the Karoo, how much it will cost to extract it and for how many years the gas can contribute to the energy mix in the country. Frost & Sullivan energy and environmental analyst Tilden Hellyer says SA has coal reserves that can produce 35,000MW to 70,000MW of electricity and gas will never replace coal — even if huge shale gas reserves are found. He says SA intends to use only about 4,000MW of gas power from the Karoo. If the environmental concerns are addressed, the environmentalists may start seeing the benefits, he says. "It’s about companies overstepping or pushing boundaries — or even corrupt officials and municipalities passing these laws, that is the problem. There are ways to mitigate this if we have the right scientific measures in place and if we mitigate this properly we would be okay," Hellyer says. Neethling says: "Producing gas at commercial scale will positively contribute to changing SA’s energy mix and could potentially be a significant and much needed contributor to the economy." The main concerns flagged by the environmental groups are water contamination and water shortages. Burnell says in 10 years’ time, when fracking comes on stream, there may be better technology and environmental concerns may be obsolete.