Shell raring to go as cabinet looks likely to open up fracking
The Cabinet looks set to approve the removal of the moratorium on fracking in the Karoo at its next meeting in two weeks, and Royal Dutch Shell has already indicated that it may spend $200 million (R1.6 billion) on the exploration phase for shale gas.
Jan Willem Eggink, Shell South Africa general manager upstream, told the Cape Chamber of Commerce and Industry that the company was set to spend this amount in the exploration phase if the cabinet gave the green light.
But Jonathan Deal, the leader of Treasure the Karoo Action Group, said he suspected that Shell had already spent R50m on its marketing and lobbying programme.
Cabinet spokesman Jimmy Manyi said a report by the Department of Mineral Resources had not been discussed by the cabinet on Tuesday. Ministry spokesman Zingaphi Jakuja could not confirm whether it would go to the cabinet at its next scheduled meeting in two weeks. However, she did say it was in the cabinet process.
Energy Minister Dipuo Peters has repeatedly voiced support for fracking and Deal said he would now be “pleasantly surprised” if ministers came to a different conclusion, although this was unlikely.
Mineral Resources Minister Susan Shabangu reported earlier that a decision would be taken by this month.
Deal said the lack of input into the fracking report from “critical ministries” – including transport, health, tourism and agriculture – would undermine “the credibility of the report”. One of the consequences of fracking in the US was that the road system had been hammered by heavy trucks.
Cape Town Chamber of Commerce president Michael Bagraim said he believed the government needed to allow for more time to consider the pros and cons of fracking, which required drilling at great depths for shale gas.
“We don’t want to get into the green versus the big business debate,” Bagraim said.
Eggink said even a conservative shale gas reservoir could have a potential annual economic impact of R80bn over a 25-year period and could boost economic growth by more than 3 percentage points.