They feared the company’s activities would jeopardise the delicate ecological balance of the Karoo reserve.
Last month Petroleum Agency SA notified them that Bundu Oil & Gas Exploration, owned by an Australian-listed company, Sunset Energy, had withdrawn its exploration application.
“Bundu’s application was dropped, after a great deal of time, energy and good reasoning,” Shapland says.
Oil and gas companies are excited about the potential for extracting shale gas in SA. Shale is sedimentary rock which is both the source and a reservoir for natural gas.
Environmentalists are less enthusiastic about the side effects of extracting the gas from the rock.
A few years ago a “shale gale” was unleashed in the US following the rise in the price of oil, shortages of easily accessible oil reserves and new technology which made it possible to release gas locked into minerals in deep rock.
But the extraction technology — called hydraulic fracturing or “fracking” — which involves pumping a water-based mixture into the rock, followed by horizontal drilling to catch the gas, has environmentalists seriously concerned.
The BP oil spill in the Gulf of Mexico highlighted the potential for what can go wrong with new technology .
An article in Vanity Fair this month, headlined “A Colossal Fracking Mess”, highlighted problems being experienced by residents of Dimock in Pennsylvania in the US.
The residents claim that hydraulic fracturing poisoned their water sources with methane, including one well that “blew up”.
The activities of a number of exploration companies in a rural area has had other unpleasant consequences, like spillages of toxic gases which are also released during fracking, and unsightly drill rigs.
The search for shale gas has spread from the US to Europe and now to SA, where exploration is at a very early stage.
Attention is focusing on two areas: the Prince Albert and Whitehill formations in the Karoo basin.
According to Mining Weekly Online, five companies have applied to Petroleum Agency SA to conduct preliminary shale gas exploration in the Karoo: Bundu; Shell; Anglo American Thermal Coal; a joint venture between Sasol, Chesapeake and Statoil; and Falcon Oil & Gas.
Neither Petroleum Agency SA nor Sasol responded to requests for more information.
An unexpected name in this list is Anglo’s thermal coal division, as Anglo is not known to have an oil and gas strategy. But Ian Hall, regional head of strategy at Anglo American Thermal Coal, says the division already has interests in unconventional gas.
It has been working on a coal bed methane (CBM) project in the Waterberg for some time, is doing preliminary reconnaissance work for CBM potential in Botswana, and has also done some related work in Australia.
Hall says Anglo has been granted a “technical co-operation permit” for an area in the southern Cape, which gives it access to some of the historical data to do a desk-top study.
After 12 months, if it finds sufficiently interesting data, it could apply for an exploration licence in the area, which would involve drilling.
The potential for shale gas could be anything between zero and huge, he says. “At this stage we have no idea of the potential.”
Prof Maarten de Wit of UCT’s department of geological sciences says not enough is known yet about the shale gas potential of the Karoo. “It could be very big, the tests look interesting, but no-one has done the calculations yet,” he says.
Soekor searched the area for oil and gas in the 1960s and 1970s and found nothing, but it was not looking for shale gas, which is held tightly by the minerals in the rock.
De Wit says the depth varies from surface to hundreds of metres , but at greater depths it becomes uneconomic to drill.
One of the major hurdles, and one which De Wit assumes the big exploration companies are aware of, is the lack of water in the Karoo which is essential for hydraulic fracturing.
“Most of the water in that area is brackish, and there is not enough of it,” he says. “Some people are optimistic they can find water reservoirs, but there are some doubts about whether they will be able to tap water resources in such a water-starved country.”
A recent study by Cornell University found that once methane leak effects are included, the life-cycle greenhouse gas footprint of shale gas would be worse than those of coal and fuel oil.
Bobby Peek, director of environmental justice organisation groundWork, says shale gas exploration goes against SA’s promise that it would try to move away from fossil fuels.
“The environmental implications will be similar to other fossil fuel exploration, with all the possibilities for things going wrong and contaminating the environment,” Peek says. “Shale gas will not spill like crude oil, but we don’t yet know the finer details.
“Most important, because fuel is highly sought after, it will have the same implications as other mining activities for moving people off the land and decision- taking behind closed doors.”
Thursday, 15 Jul 2010