Shale Gas in South Africa: Regulating a Resource Grab

A number of transnational oil companies have recently been given the go ahead by the South African government to initiate hydraulic fracturing for the exploration of shale gas in a semi-arid part of the country, the Karoo region, despite a lack of robust regulatory procedures being in place. When she lifted an earlier moratorium in September 2012, the minister of mineral resources provided no indications of the source from which the substantial quantity of fresh water necessary for fracking would be derived. Existing economic sectors fear the contamination by the oil companies of local groundwater, on which all farming and tourism in the area relies, and a subsequent loss of livelihoods, biodiversity and heritage. In the race to exploit the resource, encouraged by the National Planning Commission, a grab will be made for up to 20 per cent of South Africa’s land surface. The country’s mineral rights are not vested in landowners but in the state, which has allocated them to the oil transnationals. Taken together with scarce water resources, the cost of the industry’s activities will be far higher than the temporary energy dividend. Yet government uses the language of energy security, lower carbon emissions, and local economic development, all of which concepts have been questioned by civil society, pointing to shale gas as typifying the ‘resource curse’.

The presentation looks at potential socio-economic and environmental impacts of shale gas exploration and mining, raises questions about the functioning of the new South African democracy in deciding on controversial new technologies, and proposes legal and regulatory instruments steps that need to be put in place.