File photo of a shale gas well in the US. The decision by the cabinet to lift the moratorium on fracking in the Karoo looks set to be challenged in the courts.

The decision by the cabinet to lift the moratorium on the controversial exploration and extraction of shale gas – dubbed “fracking” – in the Karoo, looks set to be challenged in the courts on the grounds that the government has put the cart before the horse.

The Treasure the Karoo Action Group (TKAG) national co-ordinator Jonathan Deal said his organisation, which has been conducting a two-year campaign against hydraulic fracturing, was “not surprised”, but it was disappointed by the lifting of the 18-month moratorium.

His group would appeal first to the Mineral Resources Department to reverse its position on the grounds that it had not followed due process. It would then go to the high court if this was not persuasive enough.

It was announced at last week’s cabinet briefing on Friday by Minister in the Presidency Collins Chabane that the cabinet had approved a report on shale gas exploration submitted by Mineral Resources Minister Susan Shabangu from the technical task team, which had been convened in 2011.

“The cabinet endorsed recommendations of the report on the lifting of the… moratorium,” he said.

Shabangu’s spokeswoman Zingaphi Jakuja said that the minister would brief journalists at Parliament on Tuesday, and would not respond to questions about the licensing procedures or time periods involved before extraction takes place.

Deal said the minister had led environmental lobbyists and the people of the Karoo up the garden path. “In March last year the minister promised that there would be meaningful consultation with the people of the Karoo before the government made any decisions. Quite clearly her promise has been broken.”

The cabinet’s decision to give fracking the green light came in the wake of Deputy President Kgalema Motlanthe and Energy Minister Dipuo Peters comments punting the potential for job and wealth creation related to the industry.

Motlanthe said it could be a useful alternative to nuclear power, while Peters went so far as to describe the estimated 485 trillion cubic feet shale gas reservoir as “a gift of God”.

Fracking had also received backing in the National Development Plan and from Finance Minister Pravin Gordhan.

Pressed at the cabinet briefing on whether the cabinet had not put the cart before the horse – by lifting the moratorium after conducting a secret investigation process into the merits or otherwise of fracking without consulting or informing the public – Chabane said that the consultation process with the public would now proceed in earnest.

Shale gas exploitation would go through the normal environmental, exploration and licensing procedures.

He said the department needed the report in order to understand the implications of shale gas exploitation. The moratorium had been imposed to give the government time to consider the best practices and experiences of shale gas extraction in other countries.

“South Africa is an energy scarce country, we don’t have reliable energy sources,” Chabane said. Shale gas extraction could provide the opportunity for the country to tap into gas, he added.

Royal Dutch Shell, Bundu Oil & Gas, and Falcon Oil & Gas have all applied for exploration licences in the Karoo, but only Shell has conducted a high profile public campaign to woo the Karoo community.

“Quite clearly the minister (Shabangu) has sent out the message to the international community that South Africa is open to business… I suppose her job is to exploit the mineral resources of the country,” Deal said. But he added that the underlying message was that South Africa was making “a hasty and ill-informed decision”, without the benefit of public consultation over a technology “that is vastly unpopular internationally and is growing in unpopularity”.

“We will show the minister that the environmental management plan of the applicants are filled with fatal flaws,” said Deal, noting that the consultation process by the gas companies had “been a joke”.

Shell had sponsored a glowing Markinor report and an Econometrix survey indicating that the economy might be boosted by R200 billion a year, which had “no legal standing”. He believed this would not hold up in court.

Bundu director Peter Price would not comment on the announcement, referring questions to the holding company, Australia’s Challenger Energy.

Shell’s Jan-Willem Eggink had applied for a technical co-operation permit and then an exploration licence before the moratorium had kicked in.

Now that the process was due to restart, the government would have three months to review its environmental management plan.

Eggink hoped that exploration rights would be granted by the end of the year or early in 2013.

He expected that if all went well, gas extraction would occur in 2015.

Eggink emphasised that there would be a thorough consultation process with farmers in the Karoo.

In addition, farmers would receive “a nuisance” servitude payment if gas exploration took place on their farms.

Eggink said he could not be specific about where his company’s rig sites would be as seismic surveys still needed to be carried out.

However, within the 94 000km area of Shell’s focus potential, gas reserves were “thin in the north” – in the area around Carnarvon.

It is understood that closer to Sutherland the underground gas fields were thicker and potentially cheaper to exploit.

It is speculated that one of the key drilling sites could be the areas around Murraysburg, Beaufort West and Graaff Reinet. Shell plans to drill between six and 24 wells over three years.

A spokesperson for Falcon could not be reached for comment.

Business Report