Enough energy to last South Africa the next 400 years?
This was confirmed by economists last year after the US Energy Information Administration confirmed that there is possibly about 485 trillion cubic feet of shale gas reserves in the Karoo Basin in central South Africa. Of this amount, more than 390 trillion cubic feet is technically recoverable.1
This ranks South Africa as having the 8th largest reserve in the world according to their June 2013 report on Technically Recoverable Shale Oil and Gas Resources (see table).
South Africa is the largest economy in Africa, besides wage disputes in the mining sector it continues to show political and economic stability even during the current economic recession creating a favourable climate for foreign investment.
Shell is eager to start fracking in the Karoo, having applied for the rights to explore almost 100,000 km2. At the moment, the project is pending the outcome of an Inter-Ministerial Task Team investigating the environmental and economic impact of Hydraulic Fracturing.
Farmers are especially concerned about contaminating their water supply. During a recent interview with the GM of Shell South Africa, Mr Bonang Mohale, it was confirmed Shell is committed to the Karoo project.2
Last week, the Department of Water and Environmental Affairs declared fracking a water-controlled activity. This confirmed the South African government is one step closer to finalizing its regulatory framework in order to ensure operators frack in an environmentally safe manner.
Although it remains a controversial topic whether or not the government can guarantee the water supply will not be contaminated in the Karoo Basin, there are also environmental benefits.
Currently the country’s energy demand is over 77% based on coal, boasting a couple of the largest coal-fired power stations in the world.3 Coal is used not only for electricity, but also for producing synthetic fuels via Sasol’s coal-to-liquid (CTL) process and in total accounts for 86% of the country’s carbon dioxide emissions.
Turning to electricity and fuels derived from natural gas could potentially reduce the country’s current carbon footprint by more than half.4 However the question remains, should South Africa turn to fracking or not?
Considering the economic viability of the process, the employment opportunities, the economic growth potential and opportunity to switch to cleaner fuels, South Africa is very likely to risk a share of its water supply…
Feeling thirsty already?
Gijsbert BakkerRegional Director–Sub-Saharan Africa
The Global Edge Consultants
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