The development of shale gas exploration in the Karoo was set to be a game changer for the South African economy, President Jacob Zuma told Parliament on Thursday.
Delivering his State of the Nation address in Cape Town, Zuma said: “The development of petroleum, especially shale gas, will be a game changer for the Karoo region and the South African economy.
“Having evaluated the risks and opportunities, the final regulations will be released soon and will be followed by the processing and granting of licences.”
In October, the government gazetted draft technical regulations on petroleum exploration and exploitation by means of hydraulic fracturing, or fracking.
Speaking at the time, Mineral Resources Minister Susan Shabangu said that the potential of shale gas exploration and exploitation provided an opportunity for South Africa to begin exploring the production of its own fuel, and could provide huge impetus for the industrialisation of the economy.
She added that the draft regulations prescribed international industry practices and standards to enhance safe exploration and production of shale gas, and would ensure that fracking was conducted “in a socially and environmentally balanced manner”.
Hydraulic fracturing involves the extraction of gas trapped underground by using pressurised liquid to fracture rock. Opponents of the process argue that the economic benefits of accessing previously unavailable energy sources are outweighed by the potential environmental impacts, including contamination of ground water.
According to petroleum industry estimates, 2.5-million hydraulic fracturing jobs had been performed on oil and gas wells worldwide by 2012, more than one-million of them in the United States.
South Africa, according to recent estimates by the US Department of Energy, has the eighth-largest shale gas reserves in the world at 390-trillion cubic feet.
Shabangu said the government was satisfied that the regulations had sufficiently addressed the recommendations contained in a report on an investigation into the social and environmental impacts of hydraulic fracturing that was conducted by a technical task team in 2012.
The report had recommended measures to mitigate the environmental impact of fracking, the main recommendation being to ensure that the country’s regulatory framework was robust enough to ensure that any negative impacts would be mitigated.
An interdepartmental committee had been set up to strengthen the regulations, and a comprehensive international benchmarking exercise of well-developed jurisdictions that had begun shale gas exploitation had been undertaken.
“We believe, as government, that we have acted in the best possible way, in the interests of the South African economy and its citizens, and we will continue to do so as we traverse this journey of hydraulic fracturing for the production of shale gas.”
Among other things, the draft regulations provide mechanisms for the assessment of the potential environmental impact of any proposed activities, for the protection of fresh water resources, and for the co-existence of shale gas exploitation and the Square Kilometer Array (SKA) project.
“We have a responsibility as government to ensure security of energy supply for the country, and to explore energy sources that will improve the country’s energy mix, grow the economy and contribute to job creation,” Shabangu said.