Tag Archive | hydraulic fracturing

Fracking regulations to enhance safety

Fracking regulations published for comment….

Fracking_GraphicProposed technical fracking regulations on “Petroleum Exploration and Exploitation” have been published by mineral resources minister, Susan Shabangu, stating that the regulations are sought to ensure safe exploration and production methods.

She said on publication, “The purpose of the draft regulations is to augment gaps identified in the current regulatory framework governing exploration and exploitation of petroleum resources, particularly in relation to hydraulic fracturing and prescribe good international petroleum industry practices and standards that will enhance safe exploration and production of petroleum”.

Protection of water resources

Such technicalities are provisions for the following:   Firstly, an assessment of the potential impact of the proposed activities on the environment must be provided; secondly, there must be provision for the protection of fresh water resources; thirdly the protection of biodiversity, palaeontology and the broader environmental impact must be in line with government objectives and, finally there have to be mechanisms for site-specific buffer zone determination for the co-existence of shale gas exploitation and the Square Kilometer Array (SKA) project.

International best practices sought

susan shabangu The mineral resources department stressed, in an earlier statement, that the regulations would ensure that all exploration activities would be “conducted in a socially and environmentally balanced manner”. The gazette in question calls for sound international petroleum industry best practices and standards.

The technical requirements include site assessment, selection and preparation, well design and construction, operations and management; and well suspension and abandonment.

Mid November is given as the date for comments to the department of mineral resources to be concluded.

Refer to articles in this category

Posted in Energy, Enviro,Water, Fuel,oil,renewables, Trade & Industry0 Comments

Fracking moves in November, says Minister Davies

Fracking equals jobs…….

frackingFracking for shale gas is under serious consideration by the minister involved and the department of energy, Deputy President Kgalema Motlanthe told Parliament recently, giving his reasons to parliamentarians for this statement as resulting from a cabinet discussion on economic imperatives, the need to create jobs and advance growth.

Minister of trade and industry, Rob Davies, also weighed in on the subject with a comment a few days later.  He also said that the cabinet had discussed the issue recently and they had concluded that the country could not rely just on a tentative upturn in the United States and Europe to help local growth and job creation but must commence its own initiatives.

Lobby for and against

Minister Davies acknowledged that there was indeed a strong environmental lobby against hydraulic fracturing but said government now needed to consider proposals for and against starting exploration in the light of the “cabinet lekgotla that had discussed global economic developments and which had decided to advance the work on taking a decision on the matter.”

Davies said Cabinet believed shale gas could be a vital component in South Africa’s quest for energy security, but at this stage the potential extent of local reserves remained unknown. “It is our intention to move before the end of this administration”, meaning before mid-November when Parliament closes.

Gas nearby

He said that also Mossgas has a resource of about one trillion cubic metres of gas, Mozambique having about an estimated hundred trillion cubic metres with some estimates that the shale gas deposits in South Africa are far bigger.

“If this was the case, this whole question could be a very, very significant game changer in terms of the energy situation in South Africa”, he said.

Handle with care

On the subject of opposition from the Karoo anti-fracking lobbies, he said that government would not proceed in an irresponsible way.  “We obviously have to bear in mind all the environmental implications including, of course, the nature of the relationships with any company that gets any kind of permit – what is going to be the delivery in terms of a positive impact on the economy.”

He mentioned that in an overall picture, the main constraint to growth that requires immediate attention was the energy situation. He said that discussions now were at senior government level.

previous articles on this subject

Posted in Enviro,Water, Facebook and Twitter, Fuel,oil,renewables, Labour, LinkedIn0 Comments

Chemical industries plan for training skills in fracking

SETAs report to Parliament with training skills update.

On the subject of fracking and in a presentation to the parliamentary portfolio committee on energy by the Chemical Industries Education and Training Authority (CHIETA), parliamentarians were told that major objectives included providing the necessary skills for jobs during the possible exploration for shale gas in the Karoo.

They were also to be part of the exploration process for gas where alternative energy employer were providing jobs and there was a promising outlook for new jobs with specialised skills which CHIETA could provide.

CHIETA is the statutory body established by the National Skills Development Act, through the Department of Labour, one of  twenty three SETAs currently carrying out sector education and training authorities in SA, each being responsible for promoting economic and social development through learnerships and skills programmes.

Gas exploration also under consideration

CHIETA told parliamentarians that the subject of gas exploration and possible new skills needed to develop off-shore gas resources along the West Coast SA and also mentioned also the need for training and skills in upgrading of refineries “to meet new clean fuel standards”. The skills needed “ in consideration of building a new refinery to reduce dependence on the import of refined products” were discussed.

Skills development levies from the petroleum industry at a figure of 95,000 persons far exceeded any other of the category of employer in CHIETA, which ranges from fertilizer to pharmaceutical groupings, of which there were 116,826 employees.

Simple trade related skills represented 50% of the shortfall in the petroleum industry, other than senior professionals who represented another 40%. The presenter talked of an integrate training process that was conducted between SAPIA, the department of energy, CHIETA itself and Johannesburg (Wits) University.

Other training groups report

Two other SETA’s briefed parliamentarians in the form of the Wholesale and Retail SETA who has some time ago signed an MOU with major training group MERSETA and arranged transfer from the latter of 3,256 levy paying companies whom they assumed responsibility for, developing a manual to accommodate fuel retailers downstream.

The levies transferred amounted to R26.9m, transferring also the NQF level 2 National Certificate Service Station Operations qualification and numbers trained with joint exercises with the fuel sector and with grants, amounted to  clerical and administrative workers-227; community and personal service workers-130; elementary workers- 866; machinery operators and drivers – 202; managers- 610; professionals– 62; sales workers– 9,559; technicians and traders workers- 259, making a grand total of 11, 915 persons trained.

The Local Government Sector Education Training Authority (LGSETA) said that their programmes were mainly focused on water and waste water treatment  with a total 1795 candidates  trained in 8 provinces. An electrical training school has been established.

In the same series of presentations, the committee heard from the grouping “Woman in Oil and Energy” presented by Mthombeni Moller .

SAPIA reports for the liquid fuels sector

A briefing by SAPIA on transformation in the liquid fuels industry noted that it was the view generally of the fuel sector that the recently introduced and revised BEE scorecard “made sense” but in welcoming the new BEE amendment bill added to anchor B-BBEE legislation, they gave a warning to legislators and department of trade and industry that whilst penalties might stop “fronting”, the whole process of criminalising such aspects of business development might have “unintended consequences”.

The industry representatives said that the concept of a BEE commission was welcomed for a number of reasons and they told parliamentarians that SAPIA’s plans for the future included an advanced certification in management for oil and gas aimed at middle management persons in transition to senior posts and for trainers to impart to these people specialist knowledge in the oil and gas Industry.

SAPIA called upon the department of energy to take the lead in developing a number of issues in sector transformation including a proper BEE framework for all to work to; revised B-BBEE codes for the sector and technical assistance guidelines to work with that were more specific on certain issues.

Posted in Energy, Fuel,oil,renewables, Land,Agriculture, Mining, beneficiation, Trade & Industry, Transport0 Comments

To ignore fracking is “an opportunity lost”

Paraphrasing the Working Group task team’s Fracking Report

Because of the uncertainty regarding the extent, or even existence, of economically producible reserves, any assessment of the potential economic impact of fracking is subject to enormous uncertainty”, says the government’s Working Group tasked to report  back on the possibility of shale gas extraction in the Karoo.  The report goes on to add that the economics of “opportunities lost” are so great that it would unwise to halt exploration and research at this stage.

The task team was set up by the minister, Susan Shabangu, last year to investigate the hydraulic fracturing or fracking of shale gas in the Karoo and at the same time, the minister imposed a moratorium on the exploration.

The task team’s report has now been approved by cabinet and the moratorium on exploration lifted but the minister has also said that exploratory fracking would not be allowed during the 6 to 12 months it would take to formulate “appropriate regulations, controls and coordination systems”. (Refer separate report)

While the existence of a significant gas resource in the Karoo would have implications for South Africa’s energy security by reducing national dependence on other fossil fuels, the magnitude of this potential is subject to considerable uncertainty owing to the difficulties in quantifying the resource, the report argues.

Consequently, says the report, “Extensive hydrological and geohydrological studies before exploration and production drilling will be required in order to minimise or eliminate potential impacts.”

The report is also quite clear that the impact on the national economy would be great and the report draws some parallels.

“If 1 trillion cubic feet (Tcf) was sufficient to launch PetroSA’s gas-to-liquids project in Mossel Bay, which provides approximately 5% of the national demand for liquid fuels and now entails 1500-1600 jobs, by making a moderately optimistic assumption that ultimately 30 Tcf will be produced (in the Karoo project) and using an indicative pricing of US$ 4 per thousand cubic feet of gas and an exchange rate of R8 per US dollar, the gross sales value would be almost R1 trillion”.

Aside from the ability to cut South Africa’s reliance on oil imports, the production of shale gas must have, the report assumes, an effect as an economic contributor, to South Africa’s growth “and its GDP would be enhanced by the necessary creation of service industries with all the attendant implications for sales of goods and services.”

Even though this process would be spread over a period of 20–30 years, the report notes that “the production of shale gas would thus clearly have the potential to make a major impact on the national economy.”

On this subject, the report notes that, “Although income tax and royalties accruing to the fiscus depend on profitability, it is expected that such amounts will run into tens or hundreds of millions of rand, augmented by VAT. The potential long-term direct employment opportunities are likely to number in the tens of thousands, with similar numbers in the industries consuming the gas extracted”.

Already, world production of shale gas has sent coal process plummeting down, even to a small degree affecting South Africans exports, although these are much protected from lower prices by the devaluation of the rand. However, the Working Group’s fracking report does not report on the effects on the coal industry or the coal fired energy market but confines itself to the viability and advisability of gas fracking alone.

Nevertheless, commentators note that the USA has cut its oil imports by 20% as a result of fracking.

The report, now released in full after the lifting of the moratorium on fracking but with a limitation on the start date of the hydraulic fracking process itself, is really all about a recommendation to proceed on exploration therefore and undertaking a lot more research particularly on water resources and the hydrological effects of fracking.

This raises the question of how limited the exploration will be from a hydrological viewpoint unless  some sort of limited fracking is done as testing. The second question on the need to draw lines of engagement on environmental issues during the exploration period.

The report notes that initially the projects involved deal with some thirty drilling points using two hectares of land per drill site and this over three years. Most job opportunities will be specialised skills from overseas. The location of the boreholes is yet to be decided.

On the subject of water use, the report says, “Hydraulic fracturing has been used in the oil and gas industry for more than 50 years and, in the last 20 years, together with the practice of horizontal drilling, has been instrumental in making the exploitation of unconventional resources technically and economically feasible.”

It goes on, “The initial stages of exploration can be conducted without the use of (water) reservoir stimulation. However, in order to assess the ‘producibility’ of a resource during the later stages of exploration and, finally, in order to produce the gas, hydraulic fracturing is essential in the exploration process.”

“The process requires the use of significantly large quantities of a base fluid, usually water, together with a small fraction of sand and chemicals pumped into the reservoir with sufficient pressure to create artificial fractures, thereby improving the permeability of the rock and allowing the gas to be produced.”

The report acknowledges that should the exploration period eventually result in large scale production, it is essential that during the earlier exploration period the possible later use of large volumes of water and chemical additives make it essential that the environmental and social implications of this process should be worked out and considered.

Presumably with the acid mine experience from mining operations in Gauteng over the years and with new legislation coming into place to bolt this down, the report remarks “Whereas existing environmental regulations adequately cover most of these factors, an immediate and important concern requiring additional attention is water usage and disposal: in particular, the volume and transportation of the water, the potential contamination of water resources and the disposal of ‘used’ fracturing fluid.

“There has to be further research in this area to investigate all potential sources of input water, as well as means of water disposal before any large scale operation gets off the ground and its seems that the exploration period is part of this. The use and disposal of water in such large amounts is expected to require a water use licence under the National Water Act.”

On dust and air pollution the report seems quite dismissive, saying that, “Noise, dust, emissions and naturally occurring radioactive mineral (NORM) contamination levels will differ at different stages and locations and can be controlled under existing legislation.” There will be no piles of rock and sand, the report says, “as seen in the mining industry”.

“South Africa’s regulatory framework must be robust enough to ensure that, if hydraulic fracturing associated with shale gas exploration and exploitation were approved, any resultant negative impacts would be mitigated”, the report warns.

The report goes into considerable detail regard astronomic effects on the Square Kilometre Array but says in conclusion that this can be controlled by the use of the Astronomy Geographic Advantage Act which clearly can and could control where fracking may and may not be undertaken.

“Astronomy research projects and shale gas in the Karoo may be mutually exclusive”, the report adds, “but the ‘footprint’ of the astronomy installations is only a fraction of the area presently considered to be prospective for shale gas.”

In its summing up, the report measures the “economic values of an “opportunity lost” against concern that the volumes of water required that may compromise other uses for this resource but says whilst the exact “hydrogeology of the Karoo at depth is unknown, potable aquifers are expected to be far removed from shale gas target formations and safe from contamination from injected fracking fluids”.

Presumably that is now is believed by the Working Group and what has to be proven.

Furthermore, the report says whilst the report is working on 30 Tcf, figures of up to 500Tcf have been expressed  and “further drilling, sampling and testing will be required to improve confidence in the existence and, subsequently, extent of the resource. A large resource would have the potential to reduce national dependence on other fossil fuels and may contribute to energy security and the reduction of our carbon footprint. These factors are a powerful justification for further investigation.”

In the event that a real resource is proven, the report adds, “It is possible that its size will be sufficient to justify proceeding to production which maybe coupled with, for example, the establishment of additional gas turbine electricity generation installations or gas-to-liquids (GTL) plants with associated employment opportunities in field operations and plant operation, potentially numbering in the thousands.”

“There would then also be significant implications for the GDP, with as much as R960bn added over 20–30 years. [Calculated at 30 Tcf @ US$ 4/Mcf and R8/US$].

Based on the conclusions set out above, the Working Group “considered a spectrum of options that might be recommended to the minister, ranging from (1) an outright ban; (2) unconditional approval of hydraulic fracturing under the existing regulatory framework.”

“Neither of these extremes was deemed suitable and, thus, an intermediate option (Option 3), specifically the ‘conditional approval of hydraulic fracturing”, was considered to be most appropriate” the report concludes.

Ongoing research is now to be conducted and facilitated by all relevant institutions and appropriate government departments

* the full report is available on http://www.dmr.gov.za

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