On August 31 and September 1 an event will take place in Port Elizabeth which aims to showcase the outcomes of recent critical national reports on shale gas in South Africa.
The first report on South Africa’s technical readiness to support the shale gas industry was commissioned by the Department of Science and Technology and undertaken by the Academy of Science of South Africa (ASSAf) in collaboration with the South African Academy of Engineering. The second report on shale gas development in the central Karoo: a scientific assessment of the opportunities and risks was commissioned by the Department of Environmental Affairs. The purpose of this two-day event will be to assist the government in framing a Science Action Plan to initiate and co-ordinate research in preparation for and support of an emerging shale gas industry.
The discovery and exploitation of very large shale gas reserves in countries such as the US have transformed the energy market. South Africa may also possess potentially large resources of shale gas, which could have a significant positive impact on the country’s energy balance should it be decided to exploit these resources.The exploitation of these key energy resources might have significant social, economic or environmental impacts and moreover will also present considerable technical challenges.
Given the recent challenges the country has faced in terms of energy supply, the possibility of exploiting shale gas deposits for power generation is of significance. Shale gas also presents other downstream opportunities, such as providing a key resource for the production of liquid fuels and chemicals, or enabling the development of a domestic market for gas as a cleaner energy resource.
Recently, there has been considerable interest from the government and various companies in the possibility of developing a shale gas industry in parts of the Karoo, where significant reserves of shale gas are thought to exist.
There are, however, considerable uncertainties regarding the extent of these reserves and the geology at depths where they are typically found. These and other uncertainties and constraints include the following:
The quantum of shale gas in the Karoo is still unclear, with estimates ranging between 20trillion cubic feet (tcf) and more than 400 tcf. None of these reserves have yet been proven, with the amount of exploitable reserves probably being closer to the former figure.
There are also constraints relating to geographical regions. For example, existing legislation already requires that no fracking may take place in the vicinity of the Square Kilometre Array site.
Ensuring that no hydraulic fracturing takes place at depths less than 1500metres to protect groundwater resources will also reduce the geographical area of interest.
Shale gas exploitation requires the use of relatively large quantities of water. Given that potable groundwater should not be used for any such exploitation, greater clarity is needed on the availability of deep-level saline water, which is acceptable for use in hydraulic fracturing.
For many reasons baseline studies need to be carried out to ascertain with greater certainty the geology at depths greater than 3km underground. Such studies should also ensure that there is a clear understanding of the status of the human and natural environments before any fracking commences.
South Africa has a serious shortage of the high-level skills that would be required to implement such an industry. Strategies thus need to be set in place to develop such skills.
International experience has highlighted the critical need to have all the necessary legislative and regulatory structures in place, as well as a sufficient number of regulators with the required skills, before a shale gas industry is launched.
The implementation of a shale gas industry in an area like the Karoo may have a significant socio-economic impacts on the local population. Therefore it is important to ensure that there is a full understanding of these potential impacts and that plans are developed to manage them.
Most importantly, resolution of these uncertainties requires extensive and ongoing consultation to take place with all relevant parties, and the government has an important role to play as an honest broker of key information.
Risk and challenges
The above uncertainties point to specific risks and challenges associated with the establishment of a shale gas industry in South Africa. The government will need to create an enabling environment to encourage investment in the industry, while ensuring that the state and local communities will benefit from it. It is critical that there is clarity regarding the pricing structures that may prevail. This is crucial when the industry begins to exploit the shale gas reserves, and requires a clearer understanding of the quantum of the known reserves.
In summary, establishing a shale gas industry presents complex technical and economic challenges, and implementation will require a whole-of-government approach. A structure at government level to facilitate and co-ordinate all the activities relating to the industry is recommended.
Professor Cyril O’Connor is a senior researcher at the University of Cape Town, a Member of ASSAf and chaired the ASSAf panel which undertook the study on South Africa’s Technical Readiness to Support the Shale Gas Industry.