Fracking could add billions to GDP: report

INLSA

Minister of Mineral resources Susan Shabangu

South Africa stands to make billions and create thousands of jobs should fracking go ahead, with as much as R960 billion to be added to the country’s GDP over 30 years, according to a report commissioned by the government.

At least one economist agrees, saying the government took “a sensible decision” by allowing exploration to proceed and citing “huge” economic benefits. The Department of Mineral Resources says tens of thousands of “long-term” direct employment opportunities would be created over the 30-year period.

On Tuesday, Mineral Resources Minister Susan Shabangu released a technical task team’s report that was approved by the cabinet last week. The government announced on Friday that it had lifted the 14-month moratorium on shale gas exploration.

The report says although the hydraulic fracturing, or fracking, process would be spread over 20 to 30 years, “it clearly has the potential to have a major impact on the national economy”.

The report says there would be “significant implications for the GDP”, with as much as R960bn being added over 20 to 30 years. “The potential long-term direct employment opportunities are likely to number in the tens of thousands, with similar numbers in the industries consuming the gas.”

On time frames, she said it would be hard to say when licence holders would be able to move ahead. “No licence is given to any company without conditions,” said Shabangu. She said there had been a “big debate in cabinet” about it.

Investment Solutions economist Chris Hart said the economic benefits of turning gas to liquid would be “huge”.

“We need to understand this. And the environmental lobby groups need to be more realistic and they need to explain how to generate energy in an environmentally sustainable way.”

Hart said a lot of poor communities in the Karoo could benefit. “We need to use resources we’ve got.”

Environmental lobby groups have threatened to challenge the government’s decision in court, citing dangers posed by fracking to the Karoo.