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Shale gas industry lacking legal framework

17th January 2014

By: Carina Borralho

  

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Mining companies that claim shale gas exploration in South Africa, including hydrogeological studies, is regulated under the National Environ-mental Management Act (Nema) of 1998 are incorrect or being misleading, says environ-mental law firm Cullinan & Associates senior associate and environmental law specialist Alison McKenzie Pienaar.

“Nema provisions, when read with the National

Environmental Management Amendment Act (Nemaa) of 2008, are only to apply to mining-related activity from Decemeber 7, 2014,” she tells Mining Weekly. This follows the delayed promulgation of Nemmaa and the Mineral and Petroleum Resources Development Amendment Act’s provisions, which started on June 7, for the environmental management of mining-related activity, which will be official on December 7, 2014. These provisions stipulate that the Nemaa environmental authorisation process applies to mining activity only 18 months from the promulgation of the latter of the two amendment Acts.

Recent announcements by the Department of Mineral Resources indicate that current shale gas exploration licences could be granted soon after the proposed shale gas regulations falling under the Mineral and Petroleum Resources Act (MPRDA) have been promulgated, which is prior to the regulation of the environmental effects of minerals and gas under the Nema regime.

The environmental management surround-ing hydraulic fracturing (fracking) will, therefore, not fall under Nema until the end of 2014. “Government has indicated that it is likely going to grant licences before the national elections and if this does happen, it will be before the environmental management of fracking falls under Nema.

Pienaar adds that shale gas needs to be explored first before production can take place and that the recoverability of the resource will be determined only as exploration progresses. “Exploration requires ongoing assessment,” she says, adding that people have to consider the economic, social and environmental implications of fracking.

The biggest challenge currently facing the shale gas sector is the element of the unknown, explains Pienaar. “This is a new technique in South Africa and shale gas has not been explored at all. The law currently does not properly consider shale gas and the only reference to shale gas in the MPRDA is under the definition of ‘petroleum’, which extends to ‘combustible gas’,” she says.

Cullinan & Associates is trying to ensure that any shale gas industry is regulated effec-tively. Currently, the law pertaining to this is very transient and, therefore, environmental management is difficult to regulate.

Environmental Concerns

Pienaar explains that one of the major environ- mental concerns about the fracking process is its effect on the water table, since the geo-graphic location of most shale gas licences that have been applied for pertain to the Karoo, which is a semidesert region. “Because we do not know what the environmental effects of fracking can be, the potential pollution and gases released may pose a threat to the limited amount of water resources available in the area,” she says.

Meanwhile, Cullinan & Associates says the MPRDA fracking regulations, which serve more as a guideline than binding regulatory requirements, do not make provision for offences committed by a mining company should the company conduct fracking. “This is of grave concern,” says Pienaar, adding that the MPRDA regulations refer to the American Petroleum Institute (API) standards as a benchmark.

One of the concerns of the law firm about the API standards is that it is an industry standard, which means that it is not an impartial benchmark to which specific cases can apply. Further, the API standards tend to address problems of a general nature with local, State and federal laws addressing particular circumstances, including those relating to environmental management.

A further concern is that there is no provision for public participation in the API standards and very little provision for access to information.

“Cullinan & Associates is assisting with drawing up a framework of minimum require- ments for the Centre for Environmental Rights, where we are identifying what we believe the regulations of fracking and the shale gas industry should entail if licences are to be approved in South Africa,” she concludes.

Edited by Samantha Herbst
Creamer Media Deputy Editor

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