PRETORIA, South Africa - South Africa's government said Tuesday that it will allow shale-gas exploration in the Karoo but will only authorize hydraulic fracturing once it strengthens the regulatory environment.
Minister for Mineral Resources Susan Shbangu said the controversial exploration method, known as fracking, will only be authorized "under strict supervision of the monitoring committee," which is yet to be set up.
South Africa, which is estimated to hold the world's fifth-largest reserves of shale gas, put a temporary halt on exploration last year while the government took a closer look at the repercussions of allowing companies like Royal Dutch Shell PLC to frack in the Karoo, an arid region home to a variety of desert mammals and plant species.
Last week, the government approved the Mineral Department's recommendation to lift the moratorium, but Minister Shabangu said Tuesday that fracking approval will only come after new regulations are established to monitor the process. These are expected to be completed in the next six- to 12-months. The Department of Science and Technology will also coordinate a process to allow exploration and a new, $1.87 billion telescope to co-exist.
In the meantime, Ms. Shabangu said companies will be allowed to start exploration processes like hydrological studies and geological field mapping.
Opposition from environmental groups and the local community led to a halt in exploration activity. Pressure groups fear that fracking, which involves blasting water mixed with sand and chemicals underground to free hydrocarbons trapped in rock, could damage aquifers, harming the Karoo's fragile ecosystem and threatening agriculture.
A task team comprising the Department of Energy and Mineral Resources, the state-owned electricity producer and the Council for Geoscience, among others, recommended "conditional" fracking. It also noted that based on current estimates, gas in the Karoo could add as much as 960 billion rand ($117 billion) to gross domestic product over a 20- to 30-year period.
The companies say it will take time for the opportunity to pan out. Shell South Africa's general manager for exploration, Jan Willem Eggink, has said that once the moratorium is lifted it will take at least two years to carry out an environmental impact and about nine years to do the exploration work.
The government plans to hold public consultations with companies and those who will be affected by the gas exploration. The main environmental group opposing the exploration, Cape Town-based Treasure Karoo Action Group, said it was "nonsensical" to lift the moratorium before a public consultation.
Copyright (c) 2012 Dow Jones & Company, Inc.
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