South Africa to issue shale-gas permits in early 2014

By Kevin Crowley
Bloomberg News

South Africa plans to issue licenses permitting exploration of shale-gas reserves in the first quarter, Mineral Resources Minister Susan Shabangu said.

“Now we have a 30-day period where we are expecting to get public comments from the various parties; by early next year, it will be done,” she said in an interview in Johannesburg today.

The country published proposed regulations for hydraulic fracturing on Oct. 15, a year after lifting a ban on the drilling process known as fracking, as it seeks to tap as much as 485 trillion cubic feet of resources in the semi-arid Karoo region. Opponents of the practice, which blasts water, chemicals and sand into rock to release natural gas, say it risks contaminating ground water.

Royal Dutch Shell and other explorers have applied for permits to explore the Karoo. South Africa, which imports 70 percent of its crude-oil needs, estimates shale gas may generate 1 trillion rand ($100 billion) of sales within three decades, helping bring it closer to supplying its own energy demand.

The nation’s plans to exploit shale-gas reserves are “indefensible” and will lead to a legal battle, Treasure Karoo Action Group Chief Executive Officer Jonathan Deal said Oct. 16.

The draft rules require drillers to meet American Petroleum Institute standards governing the type of equipment used and the disclosure of chemicals. The move to pursue exploration follows a shale boom in the U.S., while diverging from policy in France, the Netherlands and Bulgaria where fracking has been restricted or banned in response to public protests.