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2023-01-13 at 13:46 #389024Nat QuinnKeymaster
Businessman Rob Hersov recently gave an interview challenging cabinet ministers to unleash South Africa’s onshore shale gas resources. Unsurprisingly, ill-informed protest followed.
The controversial subject of shale gas reserves deep under the Karoo seems set to surface again in 2023. It will surprise nobody to find that anti-development activist chatbots repeating long-discredited claims are not far behind.
Outspoken businessman Rob Hersov believes that the government is just about ready to lift the decade-long moratorium on hydraulic fracturing, the drilling technique used to liberate methane from hard shale rock formations.
In an impassioned interview with Alec Hogg of BizNews, he urges ministers Gwede Mantashe of mineral and energy affairs, Barbara Creecy of the environment, and Enoch Godongwana of finance, to stand up against green activists – whom Hersov accuses of being controlled by foreign funding – and to let the private sector loose in the Karoo to develop what could be vast onshore natural gas wealth.
He believes, as I have always argued myself, that this would bring enormous benefits, not only for energy security, but also for development in the Karoo, economic growth, and job creation.
Flimsy and dated
Even without going into the complex details, the arguments made by the attorney, Derek Light, are flimsy, dated and in some cases totally misleading.
They remind me of the early years of the debate, ten or more years ago, when I was one of very few journalists who took the trouble to systematically investigate the dozens of claims thrown up by the environmental lobby against shale gas drilling, or ‘fracking’, as the hydraulic fracturing process was called, not only in the Karoo, but worldwide.
I consistently found these objections to be mostly false, and otherwise grossly exaggerated. Some propaganda, such as images of people able to set their tap water on fire, turned out to be outright lies.
After several years of detailed research and writing a book that in part covered the controversy, my considered view was that shale gas drilling would prove minimally intrusive by comparison with, say, wind farms or the Square Kilometre Array telescope project, and that the risks to the Karoo environment, including its landscape, air and water resources, and people, were small and manageable.
I reviewed the developing regulations published at the time by the Department of Minerals and Energy, and thought them extremely thorough, comprehensive, and erring well on the side of caution. The latest draft environmental regulations of July 2022, which should be read alongside the water use regulations of May 2021, are no different, and they will no doubt soon be followed by the minerals and petroleum regulations to complete the set.
The work I did back then is spread across very many articles, but this one serves as a good summary that covers most of the bases.
Let’s take a first pass over Mr. Light’s response to Mr. Hersov, then, and highlight some of the more glaring issues.
I have no particular view on who exactly funded the environmental campaign against shale gas drilling. I do know there was foreign money involved, but I couldn’t tell you how much. I understood much of the funding to have come from Johann Rupert, a billionaire industrialist and landowner near Graaff Reinet, which not coincidentally is where Mr. Light has his modest practice.
Mr. Light claims to have acted on behalf of ‘hundreds’ of Karoo landowners.
That they should object to shale gas drilling in their back yards is, of course, entirely unsurprising, as I have always maintained.
Unlike in the US, where landowners are paid a generous royalty, north of 10%, on any gas produced from their land, the South African government expropriated mineral rights from landowners more than 20 years ago.
Karoo landowners have nothing to gain from permitting gas drillers onto their land. For them, the risk/reward equation, even if the risk is extremely low, will always be unfavourable.
That doesn’t mean that they are right in principle to object to shale gas drilling or hydraulic fracturing, of course, but it does make their opposition understandable. It sucks to live in a socialist country where the government has confiscated the means of production.
Listing the objections of Karoo landowners, Mr. Light followed good lawyerly practice and numbered all his points, albeit in higgledy-piggledy fashion. I’ll number my responses accordingly.
1. A lack of knowledge of the potential hazards among landowners may have been an issue in 2009. It certainly is not an issue in 2023. There now exist reams of detailed research, both from local scientists, consultants and government agencies, and from the biggest shale gas market in the world, the United States. They outline exactly what the risks are, and how to adequately prevent or mitigate them.
1.1. Everyone who needs to know does know what is in hydraulic fracturing fluids. Its composition is not a secret. It is in any case immaterial unless those fluids were to contaminate water resources, which they are extremely unlikely to do, and then they’re only of interest to the remediation crews.
2. The underground geology of the Karoo has been researched in detail, and is well known to the hydrogeologists working on shale gas.
3. The same is true for the hydrogeology of the Karoo.
4. The impact shale gas drilling would have on water resources is well-understood, and is provided for in detail in the government’s regulations.
4.1. The Karoo is only water-scarce on the surface. Its underground water reserves are enormous. Is there a point that needs addressing, here?
4.2. This is a bland statement of fact. It does not raise any actual concern.
5. There was, in 2009, when Mr. Light began work on this issue, a lack of legislation and regulation to cater for shale gas development. This is no longer true. On the contrary: the government has spent the last decade or so developing, and redeveloping, detailed regulations.
6. There is no evidence that shale gas development will have any negative impact upon agriculture or food security. It didn’t in the US. Any limited risks, such as dust, are easily addressed.
6.1. That 50% of South Africa’s red meat comes from the Karoo is a highly dubious claim, since it produces only mutton and lamb. It is implied that this production would be under threat, however, which is plain nonsense.
7. Potential risks to air quality are well-understood, and claims of potential risks to human and animal health remain completely unsubstantiated, as they were in 2009.
8. The risk of increased seismic activity is also well understood and circumscribed. In a seismically stable region such as the Karoo, hydraulic fracturing is highly unlikely to lead to noticeable tremors, and entirely unlikely to lead to damaging earthquakes.
9. There is indeed a ‘lack of understanding of the potential socio-economic impacts of [shale gas development]’, but there is a very sound understanding that it cannot be anything other than positive.
10. What tourism? The tourism that leaves most of the Karoo mired in dire poverty?
11. If there are heritage or paleontological sites to be concerned about, it would be trivial to raise objections and deal with them on a case-by-case basis. Banning an entire industry because someone thinks there’s a bone in a hill somewhere is absurd. As for a ‘sense of place’, if that doesn’t apply to places disfigured by wind farms or solar plants, then why should it apply to wells that will hardly even be noticeable from a distance?
12. Well decommissioning is fully addressed in the regulations.
12.1. ‘They may’. Sure. They may. But they probably won’t.
13. The ‘risk of leakages and spillage with resultant contamination’ is addressed in the regulations, and if that risk were to materialise it would be localised and remediable. Note that a well spill is a great cost to an oil and gas company. They spend 20% of their time drilling wells, and 80% of their time trying to prevent the gas from blowing out. They want to capture the gas, not spill the stuff they’re hoping to sell.
14. Waste disposal is covered in the regulations, and is a well-understood engineering problem that has well-documented solutions.
Ten years ago
Yes, government did recognise that these concerns had merit, ten years ago, and implemented a moratorium, ten years ago. A permanent moratorium would be a contradiction in terms. These concerns have been thoroughly researched and investigated, and regulations written to mitigate them.
There are still unknowns, to be sure, but those unknowns are not of much interest to anyone other than the oil and gas companies themselves, such as what the impact of dolerite intrusions will be on well-drilling, or how much commercially-recoverable gas there really is.
These are also not unknowns that can be resolved by sustaining a moratorium and prohibiting hydraulic fracturing. On the contrary, they require going ahead with exploratory drilling, and fracturing, to fill in gaps in knowledge.
Mr. Light makes much of the fact that the regulations published in 2015 by the Minister of Mineral Resources under the Mineral and Petroleum Resources Development Act were set aside by the Supreme Court of Appeal in 2019.
He misleads readers by making it appear as if the court sided with ‘landowners’, as he calls the lobby group AfriForum and the environmental activist Treasure the Karoo Action Group, who brought the action, on the substance of their complaints.
In fact, the court ruled on a narrow technical difficulty, which is that while the regulations were being drafted, the law had changed. This made it illegitimate for the minerals minister to issue regulations on environmental matters that ought to have been promulgated by the environment department.
The court did not in any way critique the substance of the regulations, or affirm the validity of the substantive objections against shale gas drilling. It was merely a question of who had jurisdiction.
As I explained in this 2019 article, it was a procedural matter, it did not vindicate the opponents of shale gas drilling in any way, and it merely required the government to issue new, valid regulations, which they have since done.
Trillions of cubic feet
Mr. Light then unburdens himself of the opinion that there probably isn’t much gas there, anyway. This is of concern to nobody other than the prospective oil and gas companies hoping to exploit the resource.
He is quick to cite a study from the University of Johannesburg which concluded, counter to every other estimate out there, that there are only 13 trillion cubic feet (tcf) of recoverable resources.
He ignores the current estimates of the Petroleum Agency of South Africa, which believes there to be a recoverable resources of some 205 tcf, with different surveys giving ranges of between 30 tcf to as much as 485 tcf.
For context, Mossgas was approved on the basis of a 1 tcf find.
Mr. Light refers to the Soekor wells, drilled in the 1950s, without mentioning that Soekor was looking for oil, and that the rapid depletion of gas in shale that must be fractured to extract gas is entirely expected.
Shell has indeed disinvested, citing legal uncertainty, in large part because of the endless obstructionism of people like Mr. Light. This is not a good thing. This harms South Africa’s economic prospects.
He describes Mr. Hersov’s ‘tirade’ as ‘extremely offensive’, but it would be hard to find anyone in this country who would argue in defence of Cyril Ramaphosa’s spine, and the left-wing green lobbyists, too, entirely merit his opprobrium. They’re bad for business, bad for growth, bad for job creation, and bad for South Africa’s future economic success.
Mr. Light casually mentions a million people supposedly employed by people loosely associated with the people for whom he acts. That figure is likely a complete thumbsuck. In any case, none of those people’s jobs are under threat, so they are entirely irrelevant to whether or not shale gas drilling ought to go ahead.
Jobs, jobs, jobs
He then challenges an old economic report that foresaw the potential to create hundreds of thousands of jobs by green-lighting a natural gas industry in South Africa, noting that the number of direct jobs created might be quite low.
That may be true, but for a start, any job is a good job in Karoo towns where unemployment levels often reach 90%.
Second, he ignores all the indirect jobs. Oil and gas works need construction work done. They need supplies. They need food and accommodation.
Third, an upstream gas industry will create enormous downstream economic opportunities.
Mr. Light sounds like someone who would object to the building of a solar plant, because it doesn’t create enough jobs, and most of those jobs are not permanent, ignoring entirely the impact on the economy of having more electricity.
Likewise, the availability of an inexpensive onshore source of natural gas will have massive implications for the economy, by replacing diesel in gas turbine power stations, by providing an export commodity that is much needed in the world right now, by providing a feed stock to the chemicals and plastics manufacturing industries, a fuel for industrial furnaces, and a means of heating and cooking for electricity-starved homes in South Africa.
The downstream economic opportunities go far, far beyond just the few people who drill the well and pump out the gas, and only a lawyer intent on deceiving people would suggest otherwise.
Hersov is remarkably optimistic about how soon gas could be brought on stream, and I tend to agree with Mr. Light that it would probably take longer. But so what? That is of concern only to the oil and gas companies and to government energy mix planners, and the longer it takes, the sooner we need to start. We should have started ten years ago.
He makes it sound like nothing with a long lead time is worth doing, which makes sense only if your ulterior motive is to prevent that thing from ever being done at all.
On a first reading, therefore, Mr. Light’s arguments against shale gas drilling and Mr. Hersov come up very light indeed. They are the hackneyed bumper stickers of environmental activism from a decade ago, turned up in the wash like crumpled ten rand notes.
If Mr. Light is being paid to write this stuff (and one assumes an attorney doesn’t get out of bed without being paid handsomely), he really ought to do a better job of it.
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