At the Frack Free Fest held in Matatiele in October, Cheryllyn Dudley, MP for the ACDP, representing ten political parties accepted the Matatiele Manifesto, promising to raise our concerns in Parliament. She kept her word. A debate took place in the National Assembly on Thursday 1 December.
Many political parties spoke and we were very pleasantly surprised at how many were concerned about the possibility of fracking. The transcript we received from Parliament follows. Emphasis by FFSA editor.
FRACKING AND OTHER MEANS OF GAS EXTRACTION WITH REFERENCE TO APPLICATION FOR EXPLORATION LICENCES.
Mrs C DUDLEY – ACDP
Growing numbers of people in affected communities are asking government to permanently ban hydraulic fracturing throughout South Africa. They are facing the looming threat of an expanding suite of extractive fossil-fuel mining processes, one of which is unconventional gas extraction, which makes use of hydraulic fracturing, aka fracking, and coal bed methane extraction.
There are fracking bans in many parts of the world, including Scotland, Wales, Germany, Spain, France, Poland, Bulgaria, Romania, Argentina, Switzerland, Austria, the Czech Republic, Italy, Ireland – both north and south, and the Netherlands.
Since October 2015, 11 new applications to Petroleum Agency South Africa, Pasa, have been submitted for shale gas exploration in the eastern watershed of South Africa – from Matatiele in the northern Eastern Cape, across KwaZulu-Natal, to the Free State and Mpumalanga.
The ACDP also has serious concerns with a situation in South Africa where ‘state capture’ conspiracy theories abound and no-one seems to know anything about US-based and owned Rhino Oil & Gas Exploration South Africa, or other applicants such as Sungu Sungu Gas and Motuane Energy. Now more than ever, we need to know exactly who is capturing our water resources and land, and exactly who will benefit.
Many of the areas targeted for exploration are located in primarily rural landscapes, which function either as agricultural production nodes, both commercial and communal, as well as strategic water catchment areas. The primarily rural Matatiele population in the former Transkei area of the Eastern Cape is highly reliant on rural resources, grants and remittances. The area is the source of the uMzimvubu River which contributes almost 40% of the water for the wider uMzimvubu-Tsitsikama Water Catchment Area.
Wide spread shale-gas-well development across this landscape would destroy the grasslands and water sources – which underpin livestock and agricultural production systems which are groundwater dependent – through high risk contamination of the surface and underground water sources upon which Matatiele and downstream users of the uMzimvubu River system are dependent.
The Matatiele Local Municipality, provincial environmental and water officials and local traditional leaders have said ‘no’ to the extraction of unconventional gas and ‘yes’ to agriculture, tourism and nature, as described in their integrated development planning, IDP.
The Harrismith-Dannhauser-Wakkerstroom area is the watershed for the Vaal, Thukela and Phongola Rivers, supporting the economic hubs of the country. We cannot afford to further deplete and pollute our precious water supplies, already under threat.
Despite consultants and applicants admitting that the number of jobs created is minimal and few available for locals, they continue to promise jobs and poverty alleviation as the benefit from extraction of unconventional gas, and no mention is made of the impacts and legacy left for communities once they leave with the profits. Short term menial jobs at the cost of human health, dignity, water security and long term household and food security are a bad deal to say the least!
There are alternative and more sustainable energy sources such as wind, wave and solar which could and should be developed by Eskom for the benefit of us all. Recent Council for Scientific and Industrial Research, CSIR, studies indicate that job creation through renewable development way exceeds those related through fossil fuel extraction and processing.
As exploration will lead to extraction, the impacts of this mining have to be identified and mitigated at the outset, not afterwards, and according to the CSIR Strategic Environmental Assessment report, Sea report, health impacts have not been addressed. This is a significant failing!
The ACDP calls on government to ensure that the National Environmental Management Act is not contravened and that at the very least a moratorium is placed on exploration until the impacts have been adequately mitigated.
Mr I A PIKININI – ANC
Sihlalo, ndicela ukuzibulisela apha kule Ndlu, ndizibulisele naphaya kwiindwendwe kakhulu.
The debate on this critical topic today will go down in the annals of our history as one of the critical milestones in the policy intervention for radical economic transformation in South Africa by the ANC-led government.
It is not neutral, neither a coincidence of history but our unwavering commitment for radical economic transformation in line with a clarion call of the Freedom Charter, 60 years back, and successful policy decisions of the ANC. As the Freedom Charter proclaims, “The people shall share in the country’s wealth.”
We once more declare to South Africans and the world to know that this is the mission we will never fail. No surrender in our lifetime, as successful generations of our forbearers have done. The long history of mining in South Africa has never ventured into the new frontiers of extraction by the state as a custodian of mineral wealth on behalf of our people, of oil and gas.
In this courageous effort, we derive our pride, confidence and aspiration from the gas extractions of one trillion cubic feet feasibility project which for well over 20 years employed in excess of 1 400 and generated revenues of R1 billion per annum on average. This is a success story, not from the text book of university libraries, but a living experience borne out of the courage to test our policies in the arena of development as the ANC.
The prospects of shale gas in Karoo rock formations is a game changer that spans mainly the provinces of Northern Cape, Western Cape, Eastern Cape, Free State and part of KwaZulu-Natal brings about a huge potential for South Africa’s development story. Scientific studies estimate the capacity of 485 Trillion Cubic Feet of shale gas resources beneath the Karoo formations.
This means our country has a potential to attain costs competitive energy security that can significantly boost its energy independent status with immense potential to improve balance of payments and advance radical socioeconomic transformation.
With the current deepening global contradictions of capitalist productions and accumulation with its attendant widening levels of poverty, unemployment and inequalities, no democratic state can take comfort in market fundamentalism which is anchored on profiteering at the expense of development and economic transformation in favour of the poor and the working class.
It is no secret that most of the developed countries today have achieved with rampant disregard for sustainable development, especially with regard to environmental conservation and protection.
The ANC cannot be reminded about environmental conservation and protection in pursuance of these developmental objectives as the environment is at the core of its policy trajectory. It is in this context that, as the ANC, we support government effort to put on abeyance further processing of applications for exploration of shale gas until such time that sustainable measures are put in place to safeguard the environment and water.
Hon members, allow me to indicate that the current estimates are preliminary, which means that continued scientific research and exploration has the potential to unravel more potential of shale gas exploration than we have currently. The technicality associated with the exploration phase is also a case in point that needs consideration before we can quantify the actual estimates going forward.
For instance, this phase involves a number of activities that narrow down to collection of more information on the field to ascertain the possibilities of existence of shale gas. This involves seismic surveys, geological sampling techniques as well as other techniques that can span anything between 3 to 5 years on average.
Over and above these scientific techniques, we salute the department for engaging communities on preliminary dialogue about the cost benefits of this initiative for socioeconomic upliftment, especially in affected areas like the one held in Cradock in the Eastern Cape. It is through these community dialogue and public participation to ensure that communities are sufficiently empowered to make meaningful contribution in the ensuing development efforts arising from shale gas exploration.
According to Reuters reports, a study commissioned by Shell estimates 50 trillion cubic feet of potential reserves which would add $20 billion to the GOP of South African economy every year for 25 years and create 700 000 jobs. The same report abounds with evidence of number of multinational corporations that have interests to invest in the shale gas sector in South Africa to the great benefits of our domestic socioeconomic development.
As it is demonstrated in the statistics above, the estimates by the corporate research about the potential of South Africa’s shale gas exploration by far exceed official estimates. It is common course that corporate sector invest more in development research both in terms of technical know-how and financial resources which should give us hope to trust their forecasts. As the ANC, we derive pleasure in that their estimates which also driven by their desire to invest provide a better future than we could think.
IN conclusion, the eyes of all patriots should be on what is good for the nation. Therefore, fracking and other means of gas extraction as a game changer is what is good for our country at this point in time.
Mr T Z HADEBE – DA
Extracting shale gas via hydraulic fracturing generally poses great environmental challenges. Therefore it is crucial to have a robust regulatory regime to mitigate risks and to improve general public confidence in what is presently a highly controversial process.
The spheres of government and departments should actively promote informed understanding amongst stakeholders using a clear scientific evidence, transparency and consistent messages across range of media and forums.
During the recent dialogue held in Matatiele on 3rd and 4th October 2016. The participants from the dialogue issued an anti-fracking manifesto. In that Matatiele Manifesto with a theme some for all, forever. It was noted that the absence of the government departments as well as the elected politicians. The non-attendance by government departments and elected politicians had muddied the waters of communities throughout the proposed fracking areas.
The importance of a clear open stakeholder engagements from all parties cannot be overstated with an issue that is subject to high passionate debate. It is important that the public is reassured that the regulations will be fit for purpose and that transparency will be displayed at all levels.
Government Ministers, MECs and Councillors should ensure that their messages are consistent with those of the departments. To quote one classical example of the inconsistency in messaging like in the Matatiele Manifesto it was noted and I quote:
“The local municipality told us that Agriculture, Tourism and nature come first in the Matatiele Integrated Development Plan (IDP), so we find it difficult to understand how the Rhino Oil and Gas application to frack in the uMzimvubu Catchment could be considered, let alone to allow proceedings by Petroleum Agency of South Africa (PASA)”.
The DA is conscious of the central goal at the heart of the Paris agreement, of creating a net zero carbon economy by the second half of this century. In order to do that, we need an orderly, managed transition that minimises the risks and allows us to seize opportunities created by the new jobs and investment in the clean industries that will increasingly drive our economies.
The party is supportive of efforts to maximise the uptake of renewable energy sources. The party does not however believe that pursuing one source of energy generation has to be done at the exclusion of others. We need to take a long-term approach to energy planning. This should include gas.
The exploitation of gas in South Africa, if is still have to be pursued, is a long-term project. It cannot be rushed and needs to be informed by best practice, stringent regulations, and continuous opportunities for public consultation.
Hydraulic fracturing should only proceed if stringent control measures are imposed to govern and regulate all actions and decisions regarding fracking. These measures should:
- Promote Transparency about the use of chemicals in the process.
- Clearly outline the rules applying to companies participating in exploration and production.
- Specify how transgressions of the rules will be dealt with.
There must also be sufficient consideration of the protection of environmental resources in all decisions with regard to fracturing. An appropriate balance must be found between doing what is right for the environment and what is right for the unemployed people who could benefit from fracking.
Adequate measures must be put in place to ensure that:
- Corruption is avoided and tracking does not become characterised by rent—seeking by the politically connected.
- Fracking is done in accordance with land use planning by local and provincial authorities.
- Water exiting drill shafts is collected and cleaned so as not to pollute surface or ground water resources.
- Public infrastructure damaged by prospecting or extraction operations be repaired and be paid for by the companies.
Ms M O MOKAUSE – EFF
The July 26 movement, the EFF which is inspired and agitated by the Cuban July 26 movement affirms here and now, that it pursues progressive internationalism and radical Pan Africanism. For this it shall lead protest against fracking. We condemn the ANC government for forcing fracking as they seem to be forcing the new clear deal with Russia.
In May 2016, the ANC government indicated that shale gas exploration will begin in twelve month. Effectively meaning fracking will commence in May 2017. This is informed mainly by the government believe that South Africa semi-desert Karoo region holds at least 485 trillion cubic feed of shale gas and that this could be the solution to energy problems.
The government announced that fracking will go on even before the completion of the environmental assessment which is meant to be completed early 2017. This clearly shows that the ANC is help bent on going ahead with hydraulic fracking in the Karoo regardless of what scientific assessment its potential impacts maybe, but what is hydraulic fracking and why is the ANC so committed in violating every available regulation to see its happening in South Africa?
Fracking involves digging well up to 4 kilometres deep than pumping in large amount of water mixed with chemical under high pressure to crack the shale rock and release the gas. Anglo-Dutch energy firm Shell is one of the companies that have shown interest in the gas exploration and have expressed concern that the lack of progress in this project is a serious concern.
A Shell commission study by Cape Town based consultancy suggested that extracting 50 trillion cubic feet or 12,8% of potential reserves would add 20 billion or 0,5% of Gross Domestic Product, GDP, to the economy every year for 25 years and create 700 000 jobs, but at what cost to the country and its natural environment? That method with which fracking is done and resources needed to do, it should immediately set the alarm bells ringing in South Africa.
The Karoo is one of the driest places you can ever find in South Africa with chronic water shortage at any given stage. Just north of the Kalahari Desert, a natural wonder with some of rarest species you can ever find, so our argument is that fracking will demonish livelihoods and cause irreparable damage to the environment.
There credible scientific argument that contamination from fracking or drilling fluids might travel upwards into the current drinking water supplies along dolerite water courses. This will endanger the already poor supply of water in some of the regions.
Secondly, there is no consensus amongst scientist of the validity of the study and many argue that deeply fractured shale basis of the Karoo has with unpredictable properties. The amount of shale gas available in the Karoo therefore is thumb sucking from people whose desire is to destroy the environment of our country. We don’t support fracking and we will lead protests.
Mr J A ESTERHUIZEN – IFP
Cheaper energy is good for South Africa. It translates into more jobs, more prosperity and a greater economic growth. Shale gas can be cheap or very expensive. Shale gas wells are short lived wells, because the gas reservoir depletes itself very quickly due to the very fast flow rates of gas, so gas companies have to constantly frack more wells in order to cover expenses.
Fracking costs about R98 million per well, and probably much more considering the scarcity of water in this country.
It takes approximately 19 million litres of water to frack a well, and up to five times that to keep their production revenues up in additional wells together with the long list of chemicals that are required for in the process.
And currently, there is no real control through regulatory frameworks which makes it mandatory for contractors drilling the wells to disclose their chemicals and that’s the first red flag and potential for contamination, as a failure of the well hole casing would allow for a release of those chemicals into our drinking water.
In the course of the initial production of the well only 15% to about 48 % of the 19 million litres of contaminated fracturing fluid is recovered and disposed of, as it is too expensive to recycle for other fracturing operations.
And when these companies say dispose of they mean pumping into a disposal well and back into the earth, thus continuing with the contamination of our groundwater supply. We have a climate that lends itself to solar and wind clean energy generation.
South Africa committed itself recently at the United Nations Framework Convention on Climate Change (UNFCCC) to phase out its reliance on fossil fuels, so, why then this contradictory position by allowing fracking?
The IFP calls for far greater investment into renewable, clean energy sources and in no uncertain way opposes all calls to allow the conducting fracking in South Africa.
Mr S C MNCWABE – NFP
Contamination of groundwater reserves is the biggest risk associated with fracking. Up to 700 different chemicals are used in the mixture that is forced into the ground and there is no foolproof way of containing those chemicals. Chemical spills and cracked well casings can lead to surface and ground water contamination. Moreover, the waste water that flows back to the surface is toxic from all the chemicals which cannot be recycled safely. How will this vast volume of contaminated water be disposed of? Fracking also uses a lot of energy and a lot of water.
South Africa is a water-scarce country and we have to ask ourselves where the water will come from to drive the fracking process. Will water be diverted from other industries or will it be diverted from agriculture? South Africa has made no meaningful efforts over the past 22 years of democracy to increase our water storage capacity and our water resources for human consumption are already under severe strain. So, where is the water for fracking going to come from?
Hon Chairperson, what fracking does is simply distracting energy firms and governments from investing in renewable sources of energy, and encouraging continued reliance on fossil fuels rather than embark on a road that will benefit a few in the short to medium term. Let us invest our resources in renewable sources of energy. South Africa has an abundance of sunlight and wind, which is grossly underutilised as sources of affordable and renewable energy.
We do not have sufficient information on the long-term environmental implications of fracking and the NFP would urge government to adhere to the precautionary principle applicable to international environmental law. South Africa is a signatory of international treaties which embody the principles laid down in the Kyoto Protocol and the Rio Conference, and accordingly, we have an obligation to ensure that environmental harm does not arise from practices which we do not have sufficient knowledge about.
The NFP believes that, until it has been proven that shale gas is in the best interests of all South Africans, and in line with section 24 of the Constitution which guarantees the right to an environment that is not harmful to health or wellbeing, fracking should not be allowed in South Africa.
Mk H V NYAMBI – ANC
Ngiyabonga Sihlalo, ngibingelela neNdlu futsi. Sitabe solomane sendlulisa emavi endvudvuto emndenini wakaFidel, nebangani, netihlobo kanye nemphakatsi wonkhe waseCuba. Sitsi akukalahlekelwa nine nodvwa sive saseCuba.
In the state of the nation address 2016, the hon President said “when the economy grows fast it delivers jobs, work and wages and businesses make profit.” Indeed hon Chair, this would be an enormous boost to the economy of South Africa. The national unemployment rate will be decreased as the fracking industry could potentially create +-700 O00 new permanent jobs.
South Africa will reduce its dependency on oil because it is largely dependent on foreign imports for crude oil needs, of which 70% of oil is being imported from developed countries. Hon Chair, fracking will also create or generate R200 billion per annum. It is characterised as a more sustainable energy solution that will enable the country to avoid the greenhouse gas emission into the atmosphere, of which South Africa is considered one of the worst offenders globally. Proponents are eager to meet the South African promise to reduce harmful gas emissions by 34% by 2020. If the country has its own fracked gas, it will be better used than importing gas that has been compressed at great energy cost somewhere else. As it grows, the natural gas prices are dropping drastically and the rand will be strengthened compared to the dollar.
The environmental concerns brought to the attention of government cannot and should not be ignored. It is for this reason that the ANC government holds further processing of applications for exploration of shale gas in abeyance until such time that measures are introduced to safeguard the environment and water pollution. Although environmentalists have a reputation of being opposed to all development, but the truth of the matter is that the evidence to date indicates that the risk is very small. This would ensure learners are effectively prepared to contribute and benefit from the developed state, especially our own young hydrogeologist to go and work and gain experience in the industry and in particular in the governmental agencies that regulate the industry.
It will be a great opportunity for the ANC-led government to continuously find solutions to advance our country as a developing nation. The lowering of carbon-fuel source would allow the economy to make the transition from its dependence on coal. Fracking as an economic booster will yield returns of 9,6% of the South Africa, gross domestic product, GDP. With the increase in production of natural gas, the number of people employed in production and delivery activities also increases. As there are a lot of oil and natural gas deposits, there is still a need to tap into the number of people employed in oil and natural gas industry. The increase in the use of fracking technology has seen a 67% rise in employment.
No more relying on foreign countries, Chair, because, now we have more access to gas deposits. However, we no longer have to rely on other countries around the world for some of our fossil fuels. Instead, we can rely on ourselves to provide energy for our own residents.
Coal releases dangerous compounds into the air such as sulphur which is poisonous, but burning gas does not release as much carbon dioxide into the air, that means the more the gas we burn the better the air quality will be. This can help to reduce the amount of greenhouse gas in the air and therefore slow down global warming.
In 2014, His Excellency President Zuma during the state of the nation address 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.”
Sengephetsa nje, Sihlalo, ngifuna kusho kahle kuze bonkhe bantfu beve kutsi sikhuluma ngani nasikhuluma ngalendzaba lesiyiphetse. I-Shell Gas, yimboni lensha-sha, leyehlukile kuletimayini, laba betimondzawo abatimisele; laba labatimisele ngekutfukisa live. Kufanele bakusekele ngalokuphelele lokuphehlwa nome kubholwa kwelidvwala. Kuphehlwa kwemadvwala kwentelwa kukhipha gezi wemvelo nekusita letinselele letintsatfu lesibhekene nato. Sikhuluma ngekunciphisa indlala, nekungalingani ngekwemisebenti, nangekwesimo sebulili kanye nekweswelakala kwemisebenti.
Ekugcineni, ngifuna kusho kutsi njengobe lamuhla kuLilanga Lemhlaba Lengculaza nje mphakatsi wakitsi e-Afrika, asitinakekeleni tsine. Phephani! Loko akusho kutsi nase utibonile kutsi simo sakho sinjani bese uyatiyekelela utitjele kutsi sengiyawubona khona. Njengobe sisaya emaholidayini nje sibophepha bekunene. INkhosi inibusise nonkhe.
Ms C N MAJEKE – UDM
Natural gas extraction is a good innovation for South Africa given our socio economic challenges that are immediate. And, the urgent need for industrialisation as a response to the fundamentals of our economic transformation trajectory. It can add to the various revenue streams and reduce reliance on coal whilst increasing our supply of energy and creating new industry.
Our devastated economy requires a deliberate investment into sustainable, clean and trusted energy generating innovations. The more we spend time discussing about the need for this innovation, the more we make the agenda to alter our economic landscape as a nation, a distant dream.
As part of our nation’s movement towards sustainable development, as envisaged in the National Development Plan, we should move with great speed in resolving differences on this matter in this regard. And with more than R100 million already invested by government towards research and regulation as a legislative body, we should be able to find each other on these matters of national interest.
Urgently, we must call on the affected departments, in particular the Department of Environmental Affairs, Energy and Mineral Resources to complete the processes related to the finalisation of the regulatory framework. A comprehensive Environmental Impact Assessment and the Strategic Environmental Assessment for the Karoo, must be completed and presented to parliament within a specified timeframe, and this is notwithstanding the legal process underway initiated by some opponents of fracking. This is one developmental issue that must not be locked in legal battles.
As part of the Cop 17 community whose 17th conference was hosted by South Africa just two months ago, we should make sure that social mobilisation is maintained, wide buy in is secured, and that licensing is not turned to extracting without accounting. Finally, social mobilisation and facilitation processes both in terms of form and content, must have a more unifying objective than it currently is.
Mr W M MADISHA:
Fracking seems to be the modern Gold Rush with 11 applications to fract for unconventional gas over the last three years. The undemocratic and divisive tactics used by corporations and government in our communities to push their version of a development agenda, has been experienced by all communities.
There are false promises of economic development and job creation but what government and these corporations seem to forget to tell communities are that, it will create very, I emphasize very, few low paying jobs as it is a highly skilled field. It is the communities living on the edge of mines that will experience that impact first hand. For example, the community of Matatiele solely depends on underground water sources for their survival. As it stands now, some areas in Matatiele only have water for two to three hours a day and at times they don’t have water for up to a week.
Twenty million litres of water is required for each well. What will the effect be on the already disastrous water situation in Matatiele? It is not only about fracking, it is the unsustainable and unsafe extractive activities such as nuclear and coal which will directly impact negatively on our communities, their health and food security. Profits are sent overseas by using global financial systems and it is not benefitting South African communities.
One thing we have learned over the last three years is that, although it is a disaster for the affected communities, it galvanized them. We hope that this debate will be one which puts everyone on the same page that the extractive industry for unconventional gas is not the way forward for our country. Instead, we should learn from Rwanda’s solar power project. The plant supplying half of Rwanda’s population with electricity was erected and fully operated within a year.
Mr J R B LORIMER – DA
Some technologies are transformational. The process of hydraulic fracturing underground has been around for decades. Combined with horizontal drilling, as it was in the last two decades, and it has changed the world. The United States is the country which has pioneered the rollout of fracking and has seen some three hundred thousand wells drilled and fracked, most of them in the last 15 years. It has found large quantities of oil and gas, to the point where it is now exporting gas and will soon be energy independent. That has changed its attitude to the world.
Fracking could hold great benefit for South Africa too.
Consider that the Mossgas field which employed thousands of people for 25 years was started on less than a trillion cubic feet of gas. Estimates of what may be under the Karoo range from nothing to almost 400 times that. The truth is we don’t know and we won’t know until exploratory wells have been sunk and fracked. The process is not without risk.
As you’ve heard from my colleagues this afternoon, many people in South Africa think it is too risky to even try. The risks include fracking fluids getting into water supplies, competition for water and waste water spills.
The United States Environmental Protection Agency, EPA, has completed a multiyear study of fracking. It found there was no evidence that fracking had any widespread, systemic impact on drinking water. Yes there has been pollution of gas into water supplies caused by well casings that were absent or not properly constructed. There are now standards in place to ensure that this is done properly.
If we were to frack, we must apply best international practice in this regard. Fracking uses a lot of water. One well uses as much water as it takes to water a golf course for a week. There is concern about where that water would come from. That is why we believe that fracking should only happen if it does not take water from people who are currently using it. Much of the water emerges from a fracked well, is similar to acid mine drainage. That water must be collected and cleaned. Once again drillers must be held to rigorous standards.
After a bumpy start this government has handled the issue better, appointing a multi agency task team to investigate it. But this government has a credibility problem. People do not trust it to look after the environment. People look at mining, not just historically but more recently where mines have damaged the environment through a combination of bad rules and worse enforcement. Just go and look at open cast coal mining around Ogies if you don’t believe me.
So people say we can’t trust government to make sure fracking is done properly. In order to address this problem this government should include on its task team academics and even members of civil society organisations and it should be completely transparent about its operations. It should have the power to stop bad practices and it should be able to shut down operations if they are polluting water used for drinking and farming. Especially during the drilling and fracking of the first wells there should be constant supervision by something like the task team which includes independent experts. There should be no suspicion that anything can be covered up if it goes wrong.
If there is gas down there in big enough quantities that can be safely extracted, the benefits are potentially massive. Six trillion cubic feet could give us a gas fired power station the size of Medupi with electricity that was cheaper and cleaner. It has the potential to run gas powered smelters and gas to liquids plants, a technology South Africa has shown it is good at. Through it all there is the potential to create large numbers of jobs, not only in the factual fracking but also in industries that will become possible with clean, abundant and cheap energy. But none of this is imminent. Even if government gave the go ahead today for fracking, it will still take something like eight years until the industry could get into production.
But all of this is theoretical until government changes the disastrous new version of the Mineral and Petroleum Resources Development Act, MPRDA. That ensured that nobody would spend money on oil and gas drilling. Government has apparently promised to fix it as the bill proceeds through the NCOP. Frankly this government’s record on mining so far argues against it getting the regulatory framework right.
This is an expensive business. A fracked well can cost 20 million US dollars. Energy companies won’t invest unless they can be sure it is worth their while. Then there is the infrastructure that government wants to be the only one building for a gas economy – pipelines and storage and distribution networks. The gas utilization master plan has been long promised but has still not emerged. If government wants to control this infrastructure it must get moving. The customary glacial pace is not sufficient. It is possible to be consultative, considered and quick.
If there is a way to create hundreds of thousands of new jobs as has been promised, this government should investigate it speedily. There should be no delay in exploiting a technology that could pull millions of our people out of poverty. This would essentially be a new industry. From the beginning it should be free of the taint of corruption which has been allowed to infect our mining industry. If there is a suspicion that drilling licences are being handed out to enrich pals of the ruling faction of the ruling party this industry will find it hard to attract both investment and public support.
Mr G OLIPHANT – DEPUTY MINISTER OF MINERAL RESOURCES
Shale gas extraction dates back to 1825, many years ago and the production has been economically mined in other countries for well over 50 years especially in the USA. There are thus important lessons to derive from these experiences noting that South Africa is poised to become a potential major player in this unconventional gas exploitation.
Hydraulic fracturing, which you now call fracking, remains a very topical issue that generates debate amongst those who are in support of the exploration for these resources and those who seek to protect the environment at all cost.
Indeed, as government we have taken cognisance of all matters raised by various parties and will continue to do so in line with the communications strategy that was approved by Cabinet on 27 May 2015. According to the preliminary studies conducted locally by the Petroleum Agency of South Africa, Pasa, and by the United States Energy Information Administration, the main Karoo basin of South Africa has between 30 and 500 trillion cubic feet, tcf, of technically recoverable volumes of shale gas. Should this be the case, then this will indeed be a true game changer for our energy mix in South Africa. But for us to be able to access that properly, exploration has to start. I must say that exploration is not extraction.
The second phase of the studies that we have done will be to try to exploit and check the validity of the statistics that we have been given. It must also be noted that the resource extends to at least five provinces, namely, the Eastern Cape, Northern Cape, Western Cape, Free State and KwaZulu-Natal, and Mrs Dudley also has seen some applications for Mpumalanga. Hon Pikinini and hon Lorimer have just reminded us of the moss gas experience, which is now PetroSA, that started with one trillion cubic feet of gas reserve and employed 1 400 people directly with great other economic spin-offs for the country.
As you know members, Hon Madisha was talking about the skills. I want to remind you that when it comes to the intellectual property, IP, on gas to liquids developed by Sasol, we are expert in this. That is why we are a sought-after as South Africa on this technology. We are not running short of skills when it comes to this one.
The Department of Mineral Resources adopted a cautious approach to fully understand and appreciate the risks and opportunities that shale gas exploration and extraction present. The former Minister of Mineral Resources, hon Susan Shabangu, imposed a moratorium in 2011, to allow us time to gather more information through technical studies and scientific assessment. The moratorium was lifted 17 months later. Members already know the names of the five companies that had applied for this.
Based on all these, an interdepartmental committee comprising of the Department of Mineral Resources, DMR, the Department of Energy, Department of Water and Sanitation, Department of Science and Technology, Department of Environmental Affairs, the Council for Geoscience and Pasa that was chaired by the Director-General, DG, of Mineral Resources, was set up in 2012 to strengthen the regulations and conduct a comprehensive international benchmark exercise of well developed jurisdiction that had begun shale gas exploitation. As government, we are satisfied that the regulations that were published sufficiently addressed the recommendations contained in a report on the investigation into the social and environmental impacts of hydraulic fracturing.
These studies were focussed on the assessment of impact to ensure that sufficient capacity is developed through the acquisition of necessary knowledge and skills to deal with this process in a responsible manner. Having regard to the technical nature of the exploration process, environmental and water impacts as well as socioeconomic impacts in its development were considered and furthermore, to ensure that the necessary regulatory and enforcement tools are put in place in anticipation for licensing and further development of this industry.
Through a process that included directors-general from different departments as well as science councils which include the Council for Scientific and Industrial Research, CSIR, SA National Biodiversity Institute, Sanbi, and the Council for Geoscience and later the Strategic Environmental Assessment, SEA, was a means of ensuring that a systematic process is followed in order to provide an integrated assessment of decision-making framework and to enable South Africa to establish policy, legislation and sustainable conditions under which shale gas development can occur.
The regulations for petroleum exploration and exploitation have been concluded and were published in the Government Gazette in 2015. The regulations have indicated in great detail on the technical process of hydraulic fracturing and further made the necessary references to the legislative requirements for environmental protection provided in the National Environmental Management Act and water protection provided by the National Water Act.
The regulations have gone a few steps further by ensuring the protection and in fact exclusion of the Square Kilometre Array project in the Karoo and for the first time made it a requirement that right holders disclose the chemicals used in the hydraulic fracturing process. Members, it must be emphasised that such a requirement is the first in all jurisdictions where hydraulic fracturing is used. It must further be mentioned that these regulations have been benchmarked with the most developed international jurisdictions on the subject matter that are leading in the areas of shale gas development.
As a further implementation of the recommendation of the technical report on hydraulic fracturing, government has instituted necessary research on the subject matter in order to enhance our knowledge and capacity. The Department of Mineral Resources has, through the Council for Geoscience in collaboration with Pasa, instituted a baseline study on the geology and mineralogy of the Karoo basin in order to assess and measure the availability of the resources and impacts of exploitation in the Karoo region.
Also, the Department of Environmental Affairs has, through the Council for Scientific and Industrial Research, instituted a study for the environmental impact of hydraulic fracturing. The Department of Science and Technology has also, through the Academy of Science in South Africa, Assaf, concluded a study on the technical readiness of South Africa for shale gas development which has been launched in November 2016. The Department of Energy, through the SA National Energy Development Institute, Sanedi, is conducting a technical study as well on shale gas development in South Africa. So, we have been very comprehensive in the studies on trying to do this.
The development of shale gas resource remains a critical element for the diversification of our energy mix in line with the National Development Plan. So, it is not either this or, it is a mixture of all these capacities that we have as a country especially where we embrace the concept of gas emissions which threatens the future utilisation of coal resources for energy generation on which South Africa mainly relies on for electricity generation. Therefore, there is an urgent need for South Africa to ensure that our economic development goals remain viable and sustainable through the provision of constant energy resources while maintaining shale gas resources can provide this balance and contribute to our national growth imperatives as we strive for radical economic transformation.
Hon Nyambi has already highlighted some economic data and according to an econometrics report shale gas development can address job creation, benefit the poor, stimulate the economy and secure energy supply for South Africans. Furthermore, it estimates that a relative conservative find of 20 tcf could have an annual economic impact of R80 billion. Hundreds of thousands of sustainable employment opportunities could be created and have knock-on effect on producers, government and consumers. Furthermore, shale gas could ease the energy deficit making it cheaper for the country to grow and ensuring a stable electricity supply.
As I draw towards conclusion, the department has also received and is currently processing five applications for shale gas development which are regarded as initial first applicants to pioneer and move forward the process of shale gas development. Furthermore, the department has through the Mineral and Petroleum Resources Development Bill, MPRD, which has recently been passed by the National Assembly and currently undergoing the NCOP process, enhanced the provisions relating to petroleum development in order to secure a win-win mechanism as the process for development evolves. The enhancement of these provisions has also been enhanced through Operation Phakisa.
It is anticipated that this initiative will drive forward the development of petroleum resources and provide necessary fiscal and socioeconomic benefits such as improving the balance of payment, community development, skills development and job creation for the benefit of South Africans, and particularly citizens who are in close proximity to operations and to reverse the evils of underdevelopment and poverty.
We take into account all the issues that are raised in terms of the water contamination but we are trying to be on top of the situation as well. We have also met with some of the antifrackings like the AfriForum and the Treasure Karoo Action Group. We met them since 2014. We continue to be with communities and we also take heed that there is a manifesto that came from Matatiele. We will get hold of that so that we do it. It is also grand standing to say that the ANC is responsible for all these environmental damages that were created under apartheid whereas these people who are shouting here were quiet. It is only after 1994 that we introduced better environmental legislations. Before that these loud mouths who are shouting here are the ones who actually damaged this environment and they were quiet.