South Africa Lifts Fracking Moratorium

It is being reported that South Africa has decided to lift a moratorium on shale gas exploration in the Karoo region that was in place since April 2011.  The U.S. Energy Information Agency issued a report last year estimating that South Africa has 485 trillion cubic feet of technically recoverable shale gas resources, most of which are located in the Karoo Basin.  Such reserves would place South Africa fifth on the list of countries that possess significant volumes of gas that have become recoverable through the use of hydraulic fracturing, which involves pumping water, chemicals and sand underground to release gas trapped in rock formations.

Shell, Falcon Oil & Gas, and Bundu Gas & Oil Exploration Have Exploration Applications Pending

There are five pending applications for exploration in the Karoo, three belonging to Shell and one each to Falcon Oil & Gas and Bundu Gas & Oil Exploration, according to state-owned Petroleum Agency of South Africa.  Shell said last year it hoped to invest $200 million to explore for shale gas in the region, and Shell and Falcon immediately welcomed the government's decision to lift the moratorium.

Environmental Concerns

The decision was based on a study that indicated the gas could be safely extracted.  As is typically the case where fracking takes place or is proposed, environmentalists were skeptical that the development of vast amounts of natural gas through fracking could be accomplished without negative repercussions for the land, animals, and water resources of the area.  Jonathan Deal, chairman of anti-fracking Treasure the Karoo Action Group, said the revocation was hasty and ill-informed.  "If any exploration licenses are issued in future, we will appeal and naturally resort to litigation should our appeals fail," he told Reuters.  "The only way to defeat this technology permanently is to get a ruling in the country's highest court against fracking on environmental grounds."

South Africa currently relies heavily on domestic coal and imported oil, and Shell has pointed out that a stable natural gas supply for power generation would reduce the country's dependence on energy imports and coal, which generates more carbon dioxide than natural gas.

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