Shell’s fracking move ‘may be a ploy’

A gas flare burns at a fracking site in rural Bradford County, Pennsylvania in this January 9, 2012 file photograph. Photo: Reuters/Les Stone

A gas flare burns at a fracking site in rural Bradford County, Pennsylvania in this January 9, 2012 file photograph. Photo: Reuters/Les Stone

Published Mar 19, 2015

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Cape Town - Anti-fracking groups believe Shell’s indication that it was pulling back from fracking plans in the Karoo until the government had put “attractive commercial plans” in place, could be a ploy to put pressure on the government to issue fracking licences faster.

Jonathan Deal, head of the Treasure the Karoo Action Group, said on Wednesday that Shell was still waiting for the government to issue exploration rights to explore for shale gas in the Karoo.

Two other companies, Bundu and Falcon, were also waiting for exploration licences.

“Shell is a seasoned campaigner and what may at first blush appear to be a withdrawal from Karoo shale gas, may just be a Trojan horse. International oil prices, a longer than expected licensing process and community opposition have all played a role in this current situation,” Deal said.

Julius Kleynhans, of the NGO AfriForum, said: “It is clear Royal Dutch Shell wants to put pressure on government to issue these licences. The threats that Shell is using by saying it’s disassembling its executive team on Karoo shale gas is strategic and cannot be taken lightly.”

Apart from the drop in the oil price and the long licencing process, Kleynhans said growing scientific evidence that shale gas was “a game-changer for the worse” was a substantial reason why fracking had not yet been conducted in the Karoo.

“However, I believe that the overriding pressure is to be found in the growing ‘pariah status’ of the technology. Globally, the well-laid and handsomely financed plans of the oil and gas lobby are failing, as the real truth of the unsustainability and risky nature of shale mining emerges,” he said.

Deal said government knew it had to conduct a “scientifically structured and holistic investigation” into shale gas fracking, which he said would show the unsuitability of shale gas being part of the energy mix.

Shell said this week the low oil price had led to its reviewing projects outside the Americas. It was pulling back senior staff involved in fracking exploration work in South Africa, and said it needed clarity on government’s technical regulations and on the Mineral and Petroleum Resources Development Act

The government has said it wants to take a 20 percent stake in Shell's South African fracking projects, before the company had recouped its exploration costs.

Asked to comment, Shell spokeswoman Dineo Pooe said the company had noted the NGOs’ statements.

“Once again, we would like to reiterate that our decision to move to a low cost holding position is driven by the current oil price environment,” she said.

Cape Times Environment Writer

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