Falcon Oil and Gas Ltd.

by Dhesigen Naidoo, June 23 2014, 09:12

IT IS speculated that the South African shale gas fields range anywhere between the eighth-to the fifth-largest reserves in the world. South Africa is an energy-scarce country, largely reliant on coal for energy, with oil and gas imports being important contributors to our negative trade balance. These two factors combined with the possibility of job creation and enterprise development possibilities, means that even if the real size of South Africa’s shale gas reserves were significantly lower than what is claimed, we have to explore the possibility.

The present preferred extraction technology is hydraulic fracturing, or fracking. In the water-scarce and environmentally sensitive Karoo, this method of shale gas harvesting clearly represents a water risk. There is also a health risk associated with the combination of silica and toxic chemicals that are an integral part of the fracking cocktail. But South Africa is a resource-based economy and dealing with such risks has been a bread and butter issue to South Africans for at least 300 years, and we are no stranger to the challenge.

It is important to remember the high prices paid for some difficult lessons associated with mining over that time, one of the starkest being the insufficient consideration of the effects at the time of operation, leaving a high bill for future generations to pay. A good example is acid mine water and groundwater pollution in the Gauteng basins. In addition, we have the lessons of others around the world, perhaps particularly the US, where there is a general view that the difficulties with the shale gas story was that the gas boom got ahead of the know-how and the science. This is a fundamental error that South Africa should not repeat.

The discussions, when they are held, tend to be justifiably emotionally charged. However, they also tend to be dominated by either hard-line environmentalists on the one hand or capitalist fundamentalists on the other. And, as is often the case, the useful questions to be answered lie in between. Most of these questions at present revolve around the economics of the shale gas harvesting with full value chain perspective.

One of the strong arguments in favour of mining the shale gas, over and above the energy security and balance of payments considerations, is its attractiveness in terms of carbon emissions. It is estimated that energy from shale gas will emit 2g of carbon emissions per million British thermal units (1.055-million kilojoules) of energy produced, as opposed to 23g using coal. This is, of course, very attractive. But this carbon gain can be realised only if the shale gas is indeed used locally as a substitute for coal. The equation is completely different if the shale gas is exported. This is a critical consideration in the shale gas decision-making process.

The second set of economic questions is associated with the water risk. The two key factors are the source of millions of litres of water needed for the fracking activity and dealing with wastewater produced and the effects that all of this would have on the existing groundwater resources in the Karoo.

There are two areas of significant investment required to engage this. The first is the upfront investment in the science to better understand the implications and to develop better technologies to mitigate the risks.

The second is the investment in the risk mitigation itself for safe water extraction or other supply mechanisms for the fracking operation and prudent wastewater treatment postfracking. This is not something the industry has to do on its own as there are several public agencies, including the Water Research Commission and its sister science councils that are already investing in these areas.

In the Water Research Commission projects, active partnership has been secured with players on both sides of the fracking debate. These include the World Wide Fund for Nature as well as major industry players.

It is imperative to raise the knowledge bar to better empower Water and Sanitation Minister Nomvula Mokonyane, her Cabinet colleagues and other decision makers to decide on an innovative pathway for shale gas harvesting in South Africa. We have the real possibility of using the exploration phase to answer many of these questions.

To enable this, we need a higher investment in the science. Doing this will ensure a South African shale gas narrative that has the opportunity to become the global best practice, first in the decision-making around shale gas harvesting and perhaps eventually in the operations itself.

• Naidoo is the CEO of the South African Water Research Commission.

http://www.bdlive.co.za/opinion/2014/06/23/sa-can-set-global-standard-for-safe-shale-gas