South Africa Seen Facing Legal Battle Over Fracking Rules

South Africa’s plans to exploit shale-gas reserves are “indefensible” and will lead to a legal battle, an environmental group said after the government published draft regulations on drilling in the Karoo region.

“An expensive taxpayer-funded court case is unavoidable,” Jonathan Deal, chief executive officer of the Treasure Karoo Action Group, said by e-mail. “Shale gas in this country would pose a dubious short-term benefit fraught with huge risk.”

South Africa yesterday published proposed regulations for hydraulic fracturing, a year after lifting a ban on the drilling process known as fracking, as it seeks to tap as much as 485 trillion cubic feet of resources in the Karoo. Opponents of the practice, which blasts water, chemicals and sand into rock to release natural gas, say it risks contaminating ground water.

The draft rules require drillers to meet American Petroleum Institute standards governing the type of equipment used and the disclosure of chemicals. The move to pursue exploration follows a shale boom in the U.S., while diverging from policy in France, the Netherlands and Bulgaria where fracking has been restricted or banned in response to public protests.

“The actions and tactics of the South African government with regard to shale gas mining is indefensible,” Deal said. “The country has had almost three years to observe the fracas developing around shale gas and to take a more prudent and especially inclusive approach.”

Royal Dutch Shell Plc (RDSA) and other explorers have applied for permits to explore the semi-desert Karoo region. South Africa, which imports 70 percent of its crude-oil needs, estimates shale gas may generate 1 trillion rand ($100 billion) of sales within three decades, helping bring it closer to supplying its own energy demand.

“The purpose of the draft regulations is to augment gaps identified in the current regulatory framework,” Minister of Mineral Resources Susan Shabangu said on the website of the government’s national gazette. The proposed rules are open for public comment for 30 days.

To contact the reporter on this story: Paul Burkhardt in Johannesburg at pburkhardt@bloomberg.net

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net

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