When looking at the merits, or concerns around, fracking we need to consider more viewpoints than just that of lobby groups, as important as these are, because there are other socio-economic issues at play, writes Noor Kapdi, Chairman of Dentons South Africa.

When it comes to boosting South Africa’s economy, which is in the doldrums and only expected to gain around 1% this year according to various analysts, we need to consider the benefits of alternative energy sources in creating jobs and reducing energy costs while ensuring projects are environmentally sound.

Socio-economic issues need to be balanced with the search for new energy sources, especially oil and gas. The rate of unemployment is hovering at around a third of all those of employable age, inflation – with energy being a large driver of higher prices – is at 5.3%, and loadshedding is, based on recent media reports, halted only thanks to the fact that Eskom is burning through large amounts of diesel, although both Eskom and the power regulators have denied this.

However, aligning these vital needs with environmental concerns is a careful balancing act. We need to accept that industrial development and production capability are crucial for our country's economic growth and social well-being. This includes generating revenue and creating job opportunities for the poor. Private sector investments can make a huge difference when it comes to creating jobs.

According to a 2017 American Petroleum Institute (API) report, the oil and natural gas industry supports 10.3 million jobs in the US – a 500,000 increase since 2011. It projects that the industry will support another 1.9 million jobs by 2035. In South Africa, through just developing the Karoo shale gas project, 700,000 jobs can be created, with a contribution of R200 billion to GDP, according to an Econometrix report.

South Africa is one of the most undermined, underdeveloped, and underexplored countries in the world, despite years of mining. Locally, we haven’t even scratched the surface here, and there are so many more opportunities. At the same time, we have the engineering expertise. We have the professional services expertise.

Yet, the need for job creation through new power sources is at odds with what is happening in the oil and gas sector. Total’s plans to pull fuel sources out of the ground through fracking is a good example.

Those opposed to its aim of drilling several holes to explore the potential for shale gas as a power source is being opposed by various lobby groups. These lobby groups argue, not without merit, that drilling for oil and gas in various areas could well harm the environment, including marine biodiversity.

The Treasure Karoo Action Group along with other environmental lobby groups, went to Parliament in May 2016 to ask that stringent regulations be implemented governing fracking. Environmental concerns are being taken into account by energy companies.

When TotalEnergies along with its partners was granted permission to drill off the Cape cost, environment minister Barbara Creecy saying she was happy that concerns regarding the environment around noise and light had been addressed. This project, however, has been delayed as lobby groups seek to have the license set aside.

One research paper published in 2020 has found that there can be little to no impact on air quality, soils, groundwater, and waterways. A three-year study in Queensland, Australia, by the country’s Gas Industry Social and Environmental Research Alliance, noted that current water treatment technology that has been implemented to treat aqua produced from coal seam gas wells has been successful in removing chemicals as well as naturally occurring (geogenic) chemicals to within relevant water quality guidelines when fracking is undertaken.

The research was undertaken in response to worries expressed by the community about the potential for chemicals used in hydraulic fracturing operations to affect air quality, soils, and water resources.

Data for the study came from air, water, and soil samples taken before, during and up to six months after hydraulic fracturing operations at six coal seam gas wells in the Surat Basin in Queensland.

There was, the study found, little to no impact on air quality, with levels of most of the atmospheric air pollutants that it detected generally being below relevant national air quality objectives.

Chemicals from hydraulic fracturing weren’t detected in water samples taken from nearby groundwater bores, soil samples from sites next to operational wells, or in water samples from a nearby creek.

While water produced from the wells straight after fracturing did contain some hydraulic fracturing chemicals, elevated concentrations of major ions (salts), ammonia, organic carbon, some metals and organic compounds, concentrations of these chemicals were reduced to a pre-fractured state within 40 days thanks to proper water treatment.

It also noted that some types of biocides used in hydraulic fracturing fluids and some geogenic chemicals were completely degraded in soil samples within two to three days.

Environmental concerns raised by lobby groups need to be taken into consideration and they certainly provide a voice to concerned people. The environment is important. We need to reduce CO2 emissions across the globe as we seek to meet the United Nations’ target of Net Zero by 2050.

But – as a country – we need to be careful to not only focus on one aspect of fracking. And, they don’t generally speak for the disadvantaged people in the area because justice tends to be weighted in favour of those who have money.

The non-governmental organisations do not take into account the massive potential for job creation, which is not limited to direct jobs, but could also indirectly create opportunities for entrepreneurs who open their own businesses, such as spaza shops.

At the same time, there will be a need for urban development around the project for permanent jobs. We also cannot forget that people will have the opportunity to be upskilled. The benefits are enormous.

Another aspect that cannot be discounted is a much-needed reduction in fuel prices.

Milan Singh, in an article published in the middle of last year, stated that, when you have more natural gas, households pay less for energy. Quoting a 2015 Brookings white paper, Singh says that residential electricity bills declined so much that commercial users spent $11 billion less between 2007 and 2013, while industrial users saved $22 billion over the same period.

In South Africa, power prices keep going up, with Eskom having implemented the approved increase of an average increase applied to the key industrial and urban tariffs of 13.29% from April. That’s more than double inflation.

At Dentons, we advocate for climate justice, emphasising rational, middle-ground solutions tailored to the South African context, and avoiding extreme positions that overlook the realities of our unindustrialised society.

There is no reason why there can’t be a balance between ensuring that the environment is protected, while also creating jobs and desperately needed energy sources, at cheaper costs.

Above article was originally publish via The Sunday Times - South Africa