South Africa Energy Minister Favors Tapping Shale-Gas Fields

South African Energy Minister Dipuo Peters said she wants the country’s shale-gas reserves to be tapped if the process can be undertaken safely.

The government last year halted plans for hydraulic fracturing as it studied the environmental repercussions of allowing companies including Royal Dutch Shell Plc (RDSA), Falcon Oil & Gas Ltd. (FO) and Bundu Oil & Gas (Pty) Ltd. to employ the practice. Fracking, which involves blasting water mixed with sand and chemicals underground to free trapped hydrocarbons from shale formations, has been banned in France and Bulgaria.

“We are conflicted when it comes to the issues of shale gas,” Peters told reporters in Cape Town today. “We have got to look at South Africa becoming self-reliant in energy resources. If extraction of the gas can be done safely, let’s go and do it.”

South Africa, a net oil importer that’s threatened by power shortages, has the fifth-largest technically recoverable shale resources of 32 countries, an initial assessment commissioned by the U.S. Energy Information Administration shows. The nation holds about 485 trillion cubic feet, according to the study that was published last year.

Developing a 10th of that may boost the economy by about 200 billion rand ($27 billion) a year, a study by Johannesburg- based research company Econometrix Ltd. and commissioned by Shell showed earlier this year.

Nuclear Ambitions

If fracking does get the go-ahead, it is unlikely to dissuade the government from implementing plans to build new nuclear power plants, Peters said.

“If we are told today that it’s possible, just ask yourself when will it kick in,” she said. “It would be considered as having potential for security of energy” in the future.

Proposals to spend 300 billion rand ($36 billion) on nuclear plants with the capacity to generate 9,600 megawatts of energy by 2029 are in the “final stages of consideration,” South Africa’s National Treasury said in the budget in February. Eskom Holdings SOC Ltd., the state power utility, operates Africa’s only atomic power station at Koeberg near Cape Town, which started generating electricity in 1984.

The government is still assessing how to implement the nuclear program and hasn’t spoken to companies about building the plants, Peters said.

A technical team will draft “a report on the steps that we need to take, what we need to be able to do, the method to go forward,” she said. “The nuclear plan is part of our plan for the industrialization of this country.”

To contact the reporter on this story: Mike Cohen in Cape Town at mcohen21@bloomberg.net.

To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net.

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.