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Shell cites history to allay Karoo fears

Shell Oil Company, which has decades of experience in natural gas development in Alberta, Canada and in Texas, US, believes the procedure of drilling wells and using millions of gallons of water to extract shale gas in the karoo can be done without significant environmental damage.

It is also looking at, and piloting, other technology applications, including tight and shale gas fracturing which do not use water. One option is the use of liquefied petroleum gas (LPG). This effectively uses gas to extract gas.

One company that has spearheaded the use of gelled LPG in place of conventional fracturing fluids – water and various chemicals, which environmentalists are up in arms about – is GasFrac Energy Services. It also drills for gas in the US and Canada.

GasFrac believes that this process results in significant savings on material expenses and “fracture clean up”.

Returned from a recent round of public consultations in Graaff Reinet and Beaufort West in the Karoo, Frederick Palmer, a senior communications manager for onshore gas for Shell, said the company had considerable experience in gas fracturing in Sublette County, Wyoming – a desert-like area like the Karoo – and contended that the procedure was done without significant damage to the environment.

It had also created new wealth in the region boosting revenues to Sublette County and boosting business and employment in towns such as Pinedale, Big Piney and Marbleton.

Environmentalist groups argue that gas has come out of water taps in Colorado following “fracking” – as the procedure is dubbed.

Palmer said in three instances of contamination of aquifers in this US state, two were the result of natural contamination by gas due to decomposition of organic material and the third case a combination of gas development and natural decomposition. None were examples of contamination by chemicals.

He backed up his argument with a report from the State of Colorado Oil and Gas Conservation Commission, which found that a documentary – Gasland, which has created much antagonism to fracking at viewings in the Karoo – incorrectly attributed several cases of water well contamination in Colorado to oil and gas development.

Its investigations determined that “the wells in question contained biogenic methane that is not attributable to such development (fracking)”.

Hydraulic fracturing takes place thousands of metres below the earth, below underground aquifers. Well shafts were encased with cement and steel, so damage to the environment was prevented, Palmer said. Shell is interested in building 24 wells – eight each in three regions of the Karoo – should it get exploration rights.

On Friday, Mineral Resources Minister Susan Shabangu halted all applications for licences to prospect for shale gas in the Karoo. She said that given the intensity and scale of the issue “and the fact that this (shale gas exploration) has never been done before… my department will conduct a comprehensive study which will assist us to formulate our approach after which we will go back to the cabinet”.

Until the conclusion of a feasibility study, no new applications will be accepted – nor will existing ones be finalised. This means that existing rights held by companies – including Shell – will be put on ice.

Palmer noted that Shell was planning over the long term. It was known that energy demand would be double that of the present by 2050 and it would require a mixture of fossil fuels – including shale gas – and renewables. He said moratoriums put in place did not constitute “a ban” but provided authorities with more time “to decide” on the appropriateness of hydraulic fracturing. To prevent environmental damage, “the design and execution of the wells is absolutely key”.

There was potential for vast job and wealth creation through shale gas development, he noted. In Louisiana in the US, $10.6 billion (R69.1bn) in new business sales were generated in 2009 – in a recession year – while household income in the state climbed by almost $6bn. - Donwald Pressly

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