Trade and Industry Minister Rob Davies
Photo by: Duane Daws
Government could authorise shale gas exploration before next year's elections, Trade and Industry Minister Rob Davies said on Thursday.
"We want to move before the end of this administration," Davies said at a briefing on Thursday, following Cabinet's fortnightly meeting.
"We need to advance the work on taking a decision on shale gas exploration."
Davies said Cabinet believed shale gas could be a vital component in South Africa's quest for energy security, but at this stage the potential extent of local reserves remained unknown.
"Mossgas has a resource of about one trillion cubic metres of gas. The gas fields of Mozambique which have just opened have about a hundred trillion cubic metres of gas, and the shale gas deposit – some of the estimates would suggest that it is multiples of the Mozambican," he said.
"If this was the case, this could be a very, very significant game changer in terms of the energy situation in South Africa."
Asked about the Karoo's vociferous anti-fracking lobby, Davies replied that government would proceed with exploration in an environmentally and socially responsible manner.
"Of course we are not going to do this in any kind of irresponsible way," he said.
"We obviously have to bear in mind all the environmental implications including, of course, the nature of the relationships with any company that gets any kind of permit – what is going to be the delivery in terms of any positive impact on the economy."
Davies said the decision on fracking was part of a range of steps agreed by Cabinet, following its three-day lekgotla last week, to stimulate investment and job creation in the face of fears that a downturn in commodity prices would hamper economic growth.
An integral part of this was to improve the electricity demand and supply balance because it was "a constraint to growth that requires immediate attention".
On Wednesday, Deputy President Kgalema Motlanthe told Parliament scientists had advised government that it should seriously consider allowing fracking for shale gas because it could change the course of the economy.
Motlanthe acknowledged that there was strong environmental opposition to hydraulic fracturing, and said government was still considering proposals for starting exploration.
Davies said the Cabinet lekgotla had mulled global economic developments, and concluded that the country could not rely on a tentative upturn in the United States and Europe to help local growth and job creation.
The South African outlook was clouded by a slow-down in large emerging economies, such as China and India.
"This will also have a negative impact on global growth but also impact on middle-sized economies like South Africa," he said.
He noted that growth in the first quarter had been lower than expected and investment and employment had been disappointing.
The steps Cabinet agreed on included accelerating the state's infrastructure programmes, stimulating agriculture, and improving support to small businesses.
It was also imperative, Davies said, to stabilise the troubled mining sector and to improve the regulatory environment.
This included a need to streamline licence approvals for water, mining, and environmental impact assessments to shorten approval times.