Drilling for potential
Despite the low prices for unconventional gas, SA should invest in exploiting its shale gas reserves, the World Energy Council said this week in a report.
According to the council’s report, SA has a mooted 390 trillion cubic feet of shale gas, which, if true, would be more than Russia, and about two-thirds the size of US shale gas reserves.
Translating this potential into real value would require better local skills, the development of infrastructure such as pipelines, regulatory certainty and, most importantly, a plan on how to manage the Karoo’s scarce water resources, the report adds. Although up-and-coming players in the unconventional gas market, such as Argentina and Saudi Arabia, are making significant progress, questions remain about how viable the industry is in the face of low commodity prices and an oversupply. The ‘golden age of gas’ is no longer in sight, the World Energy Council concedes, but with SA needing an estimated 50 gigawatts of new electricity generation, gas has good potential in the long term