‘Dotcom bubble of our time’?
Christine Colvin of the World Wide Fund SA presented a paper on fracking at this week’s national water summit in Pretoria. She and Manisha Gulati summarise the argument against it
HYDRAULICALLY fractured shale-gas extraction – or fracking, as it is commonly known – has been heralded as a “game changer” for South Africa’s energy security.
There’s no doubt it could change the game as we know it, but who would be the winners and who would be the losers?
Could it really shore up our long-term energy needs? Would taxpayers gain from a significant payback on infrastructural investment? What of our water in the arid and fragile Karoo?
We don’t have the evidence and knowledge yet in South Africa to accurately predict the impact. Other countries and communities have been at the sharp end of shale-gas drilling; we can learn a lot from their experiences.
Fracking is most widespread in the US, and this is where we have the best information about the impact. Most of this has been documented in scientific studies.
We also have little legal evidence to refer to. Of the hundreds of cases brought against fracking companies in the litigious US, only one is known to have reached a verdict: “Guilty of causing the family significant grievance as a result of fracking activities.”
The others have been settled out of court with payouts tied to nondisclosure agreements that effectively seal the facts from the public domain.
Scientific studies have shown clear evidence of a correlation of contaminated drinking water within 1km of fracking well-heads in north-eastern Pennsylvania.
The water is contaminated with methane, and isotopic fingerprinting of the methane proves it comes from the fracked shale deep underground, likely to be reaching the surface through leaky, failing or improperly installed casings in the gas boreholes.
Other areas in the US do not have the same pollution profile, but in Germany and Victoria, Australia, fracking has been banned, with protection zones for drinking water abstraction wells, kept 2km from residential areas.
The water footprint of shale-gas is thousands of times that of natural gas extraction. Sir David King (UK special envoy on climate change) earlier this year said: “You cannot consider fracking in a water-stressed area.”
The Karoo is one of our most water-scarce areas. Of the 58 towns in the proposed fracking areas, 18 already have shortages and 20 are expected to see water shortages within 10 years.
If non-local sources are used, this will entail more infrastructure or trucking, and none of the neighbouring catchments have an excess of water resources.
Once water is injected into the borehole or well, only a limited proportion is recovered and the rest is lost to the water-cycle for ever, deep in the earth.
Water that is returned to the surface is highly toxic waste water, often containing radioactive contaminants. This cocktail is a challenge for effective treatment, and may require hazardous disposal. Sometimes the only option is to reinject this water into deep disposal wells, but the problem doesn’t end there.
An increase in earthquakes, or seismicity, has been noted in some areas where fracking and reinjection are taking place. As a result, a moratorium on fracking exploration was established in the UK for over a year.
The Department of Water and Sanitation has ruled out the possibility of reinjection of waste water into deep formations in South Africa, meaning treatment and eventual release to the environment is likely for the future Karoo.
The various surface activities necessary for fracking – trucking waste water and fluids; storing the waste water in ponds – have resulted in pollution in the US.
The Pennsylvanian Department of Environmental Protection reports numerous incidents of “well-head violations” in the state.
Our government has not yet put forward a convincing case on the economic viability of shale gas in the Karoo, and we don’t yet have the geological evidence to support development. The break-even prices for shale-gas production depend on many factors. Well-head costs of shale-gas are sensitive to the geology of the shale play, specifically the porosity, permeability and thermal maturity, required technology, and well production rates.
Each well in a shale play can have different requirements. Most importantly, shale-gas wells experience significant declines in productivity over time.
The US experience shows that decline rates are high in the first two years. The declining well productivity can be made up by drilling new wells to take up the slack, or doing additional well simulation for existing wells. Both options are capital-intensive.
The UK press recently described shale gas as the “dotcom bubble of our times” because even the oil and gas companies and their shareholders have experienced losses linked to unexpectedly low returns.
Similarly, we don’t know who will pay for the infrastructure development necessary for fracking or beneficiating the extracted gas.
There will be common infrastructure for the acquisition and transport of water, logistical infrastructure such as roads for transporting equipment, and gas transport pipelines.
Also, each shale well-pad needs infrastructure such as storage facilities and wastewater management.
Large-scale infrastructure existed in the US before the fracking boom, with extensive onshore oil and gas reserves and, if anything, fracking actually helped make use of this sunk cost. South Africa has none of this.
Fracking did change the energy game for countries like the US, where increasing reliance on oil and gas imports compromised their energy security. With increasing uncertainty in Europe over Russian gas imports and the conflict in Ukraine, some countries might still shift towards a domestic (if marginal) source.
Those countries have won some, short-term energy independence. Suppliers to the fracking industry – drill rig manufacturers, trucking companies, some service businesses – have been winners in the new fracking game.
However, local communities, water resources and investors in new fracking infrastructure (be it government or shareholders) have been losers in many countries.
More importantly, our focus has been distracted from long-term solutions to our energy and climate future. South Africans would be wise to invest our intellectual and infrastructural capital in world-leading renewable energy provision, especially in the Karoo, which is basking in kilowatts of solar power at the surface, not buried beneath a
– many-layered strata of risk, uncertainty and short termism.
As fracking is a relatively new abstraction, most countries have yet to realise the legacy of closed or abandoned well-heads on the landscape. We in South Africa have extensive experience of abandoned mines, with more than 6 000 recorded around the country and a clean-up bill estimated by the auditor general at R30 billion.
We are only just realising the extent of acid-mine drainage and the levels of co-operation and ingenuity we will have to employ to deal with this long-term problem. Can we afford to add gas well-heads to the legacy the next generation of taxpayers will inherit?
Christine Colvin is the senior manager of freshwater programmes and Manisha Gulati is an energy economist, both with the World Wide Fund for Nature SA. As a hydro-geologist, Colvin pioneered work on groundwater-dependent ecosystems, assessing how ecosystem resilience in semi-arid areas was underpinned by access to groundwater and springs.