Court moves may halt fracking exploration

Treasure the Karoo Action Group and civil rights group AfriForum expect to have their day in court in the next couple of months to challenge the government's technical regulations on shale-gas fracking, TKAG CEO Jonathan Deal said this week.

AfriForum's head of environmental affairs, Marcus Pawson, said that if the government issued exploration licences before that date, an urgent court interdict would be sought to halt the process.

Since 2010, residents of the Karoo have become increasingly alarmed by the granting of large land concessions to oil companies to explore for shale gas. Exploration in the 1960s established the potential for gas trapped in layers of shale in the area, but it is only in the past decade that the US industry has advanced the technology to extract it.

Fracking involves sinking deep wells through which a solution of water and toxic chemicals is injected into the shale to release the gas so it can be pumped to the surface. Three companies hold permits over large areas of the Karoo: Shell South Africa; Australian Securities Exchange-listed Challenger Energy, through its subsidiary Bundu Gas & Oil; and Falcon Oil & Gas.

The strategic environmental assessment report on shale gas development in the Karoo, commissioned by the Department of Environmental Affairs and published in November, looks at scenarios ranging from no development to discovering very large finds.

It recommended close monitoring of issues such as seismicity, water resources, biodiversity and radio interference with the Square Kilometre Array telescope, and avoiding areas of high sensitivity. The authors found the risk of increased seismicity from fracking was low and although there was not enough local water, there were limited possibilities to bring it in from elsewhere. Water pollution was more likely from surface activities such as transport and storage than from wells.

The team also addressed issues such as increased waste and sewage, which municipalities are ill-equipped to deal with, and said gas exploitation would be incompatible with niche tourism because of increased traffic and noise.

Saliem Fakir, head of the World Wide Fund for Nature South Africa's policy and futures unit, said it was unclear whether the report would become a policy document setting conditions for exploration and drilling. But by commissioning this report, the government was committing itself to proper regulation.

Deal said the TKAG/AfriForum application to set aside the technical regulations was based, first, on technical grounds, arguing the minister was not empowered to publish them under environmental and mineral resources legislation. Second, the regulations were informed by inappropriate models in the US, and ignored independent studies.

TKAG and AfriForum were also arguing that the regulations were published before the completion of the scientific studies the government had commissioned: a report of the Academy of Science of South Africa and the strategic environmental assessment.

They say there was a lack of meaningful public consultation, with only 30 days given for comment. This was far too little time for small communities to respond.

In late March, Mineral Resources Minister Mosebenzi Zwane told residents of Richmond in the Karoo that the government had decided to go ahead with the exploitation of shale gas, but had taken steps to manage the risks. It had published regulations for petroleum exploration and production and commissioned the Council for Geosciences to conduct the Karoo deep drilling study. Other government departments were busy with continuous research.

Finalising amendments to the Mineral and Petroleum Resources Development Act would help to expedite development of shale gas, he said.

Lizel Oberholzer, a director at attorneys Norton Rose Fulbright, said the minister's remarks were not unexpected, but were a reassurance of government commitment.

The industry had expected exploration licences to be granted by late 2016 or early this year.

She said technical regulations for fracking had been promulgated and South Africa had strong environmental legislation, with provisions to prevent environmental damage. The MPRDA Amendment Bill was the last outstanding legislation needed.

The other issue that could affect shale gas investment was political uncertainty, and although the cabinet reshuffle had aroused concerns, the mining minister had not changed, Oberholzer said.

Fakir said that without assurance on issues such as royalties and government stakes in future projects, which were in the MPRDA amendments, multinationals were unlikely to commit large-scale capital.

Dineo Pooe, media relations manager for Shell South Africa, said the group wanted exploration to proceed in the Karoo. This would entail significant investment, for which a supportive, clear and stable legal, fiscal and regulatory environment was needed. If Shell received all the permits, including environmental authorisation, it intended to drill a few exploration wells, which would indicate whether shale gas was present. If it was commercially viable, Shell would develop the resource to its full potential.

"Producing gas at commercial scale will positively contribute to changing the country's energy mix and could potentially be a significant contributor to the economy."

mathewsc@fm.co.za