Wednesday, March 23, 2011

MPs expect Karoo gas exploration to get nod soon

MPs on the mineral resources committee say they sense that Falcon Oil & Gas will be the first company permitted to begin oil shale extraction in the Karoo, and that this could happen within weeks rather than months.

The MPs also said their primary consideration was the utility of extracting shale gas, providing environmental management met international standards.
Their comments follow a presentation given on Tuesday by the Petroleum Agency of SA, the regulating body responsible for issuing exploration permission.
In her presentation, Jennifer Marot, the Petroleum Agency's manager for frontier geology, outlined why shale gas needed to be extracted using a controversial process called "fracking", in which a million litres of water could be used to sink a well in order to fracture rock so as to extract gas.
Shale is compressed rock that is made up of fine-grained material such as clay and silt and has low permeability, meaning the gas does not flow easily.
Marot pointed out that potential gas shale was found throughout the world and may allow countries to achieve energy independence.
"Gas is a much cleaner energy source than coal - carbon emissions are 50% lower, which can help combat global warming and is lower in other pollutants," she said.
Marot told the committee that gas power stations could be switched on and off easily and so gas was a useful foundation fuel for the development of renewable - but unreliable - energy such as wind and solar power.
She also emphasised that shale gas extraction was clean, could create potentially cheap electricity and help stimulate jobs in rural communities.
However, environmental concerns included the fact that shale gas was still a fossil fuel; that it could cause groundwater contamination; the large surface footprint created by the drilling, dust and noise pollution; the release of naturally occurring radioactive material; and the large amount of water used in the initial exploration process.
"Mitigation (of the environmental concerns) is usually possible, but expensive," Marot said.
While the Petroleum Agency's presentation gave no indication of where it stood on the issue of fracking in the Karoo or how far it was in its process of granting permission, the politicians said they sensed that exploration could begin soon.
"I have a definite sense that the first permission will be granted to Falcon Oil & Gas within weeks," said the Democratic Alliance's shadow mineral resources minister, Hendrik Smit. "I believe that was the first of the applications and so it makes sense to believe it would be the first to be granted permission."
ANC MP Faith Bikani said that if it was true that the permission was about to be granted, then the Petroleum Agency must give Parliament more information about the budget and the jobs that would be created.
"Our priority here is seeing how many jobs would be created by developing this industry. Secondly, would this industry help secure our energy supplies and, thirdly, how would the local communities benefit," she said.
Bikani said that the environmental concerns could be managed easily, but that she did expect strict adherence to the regulations and stipulations that may be imposed on the companies wanting to explore.
Smit said that he would not oppose the exploration and the method used if the environmental management met international criteria.
"Essentially it means that that the Department of Environmental Affairs must be happy that all the environmental planning considerations are in place," he said.
Falcon Oil & Gas is a US company listed in Canada. It has applied for permission to explore a 10,0000 hectare zone from Ceres to Aberdeen.
Global petroleum group Shell has applied to explore a 95,000 hectare area stretching from Dordrecht to Sutherland and has indicated that it expects a decision from the Petroleum Agency in August.
Another company, Bundu, has applied to explore for gas in a 30,000 hectare area near Graaff-Reinet.

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