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Karoo gas could fuel SA for decades — Shell

Shell says it would invest billions of dollars in the development of a Karoo gas field in the event that it got the go- ahead to drill and if its exploration of the area proved fruitful

LINDA ENSOR
Published: 2011/09/02 06:49:50 AM

CAPE TOWN — Shell would invest billions of dollars in the development of a Karoo gas field in the event that it got the go- ahead to drill and if its exploration of the area proved fruitful, Shell’s upstream manager for SA, Jan Eggink, said yesterday.

The US Energy Information Administration has estimated that there are 485-trillion cubic feet of shale gas in the Karoo, enough to make SA self-sufficient in energy for decades to come.

Exploration alone would cost Shell $200m even if it was found that the reserves were not exploitable, Mr Eggink told the Cape Town Press Club.

Shell, along with a number of other companies, has applied to the government to explore for gas in the Karoo — a proposal that has generated fierce opposition from environmental lobby groups and some Karoo landowners. The debate rages on, with opponents saying gas mining in the Karoo would desecrate an ecologically sensitive area of pristine beauty. Mineral Resources Minister Susan Shabangu has established a task team to investigate the pros and cons of “fracking” for gas, and is expected to receive this report in the next few months.

Mr Eggink stressed that Shell was committed to paying fair compensation to landowners in the Karoo to gain access to their land and also made the commitment that it would not compete with residents for water. This is one of the major concerns of landowners. Access to sufficient quantities of water will be a critical factor in the decision to develop the gas.

Mr Eggink said about 1-million litres would be required in the exploration phase and a further 5- million to 10-million litres in the development phase. If there was not enough water underground, it would have to be brought in by truck or by pipeline.

Contamination of underground water supplies is another of the key concerns of landowners, as chemicals would be used in the process of hydraulic fracturing.

But Mr Eggink said Shell knew from experience elsewhere “that if a well is properly constructed it will not leak any fluid into groundwater supplies.”

He believed SA would gain enormously from producing its own gas, which was a much cleaner form of fuel than the coal that was currently used to generate about 90% of the country’s electricity. Gas was a cleaner source of energy, which would enable SA to reduce its carbon footprint.

Developing renewable sources of energy, such as solar and wind, in sufficient quantities to make an impact would take decades.

Mr Eggink noted that a modern gas power plant generated up to 70% less CO² than the old-styled coal-fired plant and was cheaper to build.

He also stressed that the surface footprint of a shale gas development would be very small (1%) compared to the overall acreage that Shell had applied to explore in, and would create thousands of jobs.

“Rapid economic growth means electricity demand is rising. By drawing on potential abundant gas supplies you can meet rising energy demand while maintaining energy security,” Mr Eggink said.

In the exploration phase, Shell would drill at least six wells, which would reveal whether gas could be extracted in sufficient quantities to be commercially viable. But even before this phase started, an environmental impact assessment would have to be made — a process that could take between 18 months and two years.

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