South Africa Takes the Cautionary Approach

South Africa has followed the path of France and declared a moratorium on shale gas drilling in the Karoo basin region.

"Cabinet has endorsed the decision by the Department of Mineral Resources to invoke a moratorium on licenses in the Karoo, where fracking is proposed," the government said in a statement.

The department will lead an investigation into the implications of hydraulic fracturing, that will include assessing the environmental effects.

“Cabinet has made it very clear that a clean environment together with all the ecological aspects will not be compromised,” said government spokesman Jimmy Manyi. The cabinet is aware of the “urgency that is required in this respect,” he added.

The decision the endorse a recommendation by the Department of Mineral Resources places a drilling proposal by Royal Dutch Shell on hold.

Shell had applied has applied to the Petroleum Agency of South Africa for permission to drill about 24 wells in an area of about 90,000 square kilometers.

“Shell will support local research efforts into hydraulic fracturing as this will provide clarity and an improved understanding of the technology,” the company said. “Shell is fully committed to support the development of best-in-class regulatory standards for hydraulic fracturing in South Africa.”

"We have noted the South African cabinet's endorsement of the decision of the department of minerals, and we will seek clarity from the department on the full implications," a Shell spokesperson told Reuters.

Farmers, conservationists and environmentalists were joined by local landholder Princess Irene of the Netherlands and business mogul Johann Rupert in expressing concerns about the potential impact of hydraulic fracturing.

The sheep-and game-farming region is viewed as ecologically sensitive and home to rare species including mountain zebra and riverine rabbit.

Shell, Falcon Oil & Gas Ltd, Anglo American and South African Petrochemicals group Sasol together with its application partners with Statoil ASA and Chesapeake Energy Corp., had all received a Technical Cooperation Permits (TCP) in the Karoo Basin.

The permit awarded the applicants the exclusive right to study the prospectivity for shale gas for a specific period, but did not include any surface activity or drilling.

Source: Bloomberg, Reuters