South Africa is facing a double crisis: unemployment, and electricity. A local shale gas industry – if successful – could make a big contribution to solving both.
In the US, the shale revolution created nearly a million jobs. Energy independence was a distant dream for Americans when the boom began in 2008. Today, the US is the world’s largest oil producer. Shale has turned the energy world upside down.
If energy companies find sufficient gas deep below the Karoo, and begin to produce it in five or ten years, South Africa’s economy could change dramatically too.
It will create not only direct jobs, but thousands of indirect jobs, throughout the energy, transport and manufacturing sectors. It could revitalise our anaemic economic growth figures, and contribute to solving our electricity crisis.
Gas-fired power stations are cheap and quick to build, can be switched on and off like a generator when needed. They can produce far more power than comparable renewable plants. At present, we run our gas turbines on diesel, which is insanely expensive. An abundant local supply of gas would make all the difference.
However, the myths and propaganda spread by anti-fracking activists have been very successful. Every time the topic comes up, you’ll hear their claims about groundwater contamination or air pollution parroted. The truth is more mundane, however. Any environmental risks are small and manageable.
At the moment, the oil price is very low. This is good for consumers, but not for producers. It would have been far smarter to issue exploration licences when the moratorium on drilling was lifted in 2013 and the oil price was still north of $100.
Thanks to delays caused largely by anti-fracking groups, we’ll just have to hope applicants are still interested. The breakeven oil price for American shale gas has reached as low as $45, but still, a quarter of their shale oil & gas industry has shut down since the oil price collapsed. Saudi Arabia has them by the short-and-curlies. The Russians aren’t keen on everyone else producing their own gas, either.
We could also be both too greedy and unlucky, like Poland, where the once-promising prospects of shale gas drilling is now a forlorn hope.
Having said that, exploration companies work on 10 and 20-year horizons and nobody is expecting the oil price to stay this low forever. We may yet get our shale gas industry.
We might not enjoy a shale boom like the US, but by prohibiting it, we can be sure we won’t.
Some make the argument that gas will not last forever. Of course it won’t. But we don’t need it forever. We need it until something more efficient is rolled out, whether that is solar, wind, nuclear, or something else entirely. If you’re unemployed, would you refuse a job because it might only last a few years?
The claim that shale oil and gas drilling use techniques that are new, untested and dangerous is as misleading as the oil industry’s claim that fracking has a 65-year track record.
The truth is somewhere in the middle. Yes, hydraulic fracturing is not new, but two things changed.
During the 1990s, they replaced the mostly-chemical fracturing gel of the past with water, using only some additives to reduce friction and corrosion. The recipe was discovered by accident, while searching for techniques that could liberate hydrocarbons from dense rock formations like shale. It resulted in a fracking fluid that was very much cleaner than the stuff used in conventional wells of yore.
The second change is that, they learned to combine fracturing with horizontal drilling. That makes little difference at depths of three or four kilometres below ground, except that higher volumes and pressures might be needed.
This has obvious implications for well integrity, which does matter a great deal. However, whether a well holds up under pressure is important not only to environmentalists. Drilling companies cannot afford loss of integrity either. If they miscalculate, and the fractures escape from the hard, dense shale into an adjacent rock layer, or the well sleeve fails closer to the surface, they lose well pressure. Loss of pressure means that the fracturing will not be effective, or the well will not produce. Oil and gas companies don’t like $20 million wells that don’t produce oil and gas. They have every incentive to drill as safely as possible, long before regulations and lawsuits come into play.
The oil and gas industry has to report every case of well failure, and they do. On this basis, Anthony Ingraffea made the infamous claim that 60% of all shale wells suffer integrity failures, and could therefore cause groundwater contamination.
Ingraffea is an engineering professor whose anti-fracking claims feature in Gasland II and UnEarthed, and whose data celebrities like Yoko Ono rely on in their anti-fracking campaigns. He was also a co-author of the debunked methane emissions study mentioned earlier. (With considerable chutzpah, he denies being an anti-fracking activist.)
His claim about well failures is demonstrably false. It is based on a 2003 report of sustained casing pressure in offshore wells. That report measured neither well sleeve failures nor shale wells.
The barrier failure rate for on-shore shale wells is between 2% and 6%. If that still sounds like too many, it is important to realise that well sleeves consist of multiple barriers at environmentally sensitive depths. Most of those failures do not lead to any leakage, because they only involve one layer of the sleeving, or are detected and repaired as soon as they happen. Leakage incidents are much rarer. Horizontal multi-fracture wells are the safest of all wells, with a documented containment failure rate of only 0.004%.
A US Geological Survey study in 2013 found no groundwater contamination in a region with over 4,000 shale wells. It was conducted by, among others, the very same Avner Vengosh and Robert Jackson of Duke University who had earlier concluded that methane migration from gas wells was a significant risk. That study was also debunked by several other studies.
The late prof. Gerrit van Tonder, the chief hydrogeologist at Free State University (with whom I crossed swords before), was very concerned about this issue. However, his published work found that his fears about well sleeve failure could easily be dispelled. All he’d want to see is that gas drillers are required to drill three 100m-deep monitoring wells around each gas well. To prevent well failure over the long term, he simply wants abandoned wells to be properly plugged to depth, and fitted with a monitoring sensor to detect sustained casing pressure. These are not insurmountable obstacles to shale gas drilling.
There have been claims that shale gas is worse for atmospheric emissions than coal. This has been roundly refuted by several subsequent studies, and has even been rejected by major environmental groups. The most recent study found that emissions from shale drilling were even lower than regulatory estimates, and on a rapid decline.
Gas-fired power stations have half the carbon dioxide output of coal-fired stations. They virtually eliminate all other associated pollutants, like carbon monoxide, nitrogen oxides, sulphur dioxide and particulates. The Karoo is sparsely populated with wide open spaces in which any remaining and unavoidable atmospheric emissions during drilling, such as from truck or generator exhausts, would easily be dispersed.
As a matter of fact, dust is a greater risk than pollution, to both sheep farmers and the Square Kilometre Array project. Dust mitigation measures on roads used by drilling-related trucks will be required.
Still, all this makes natural gas the cleanest source that actually produces significant quantities of energy, other than nuclear.
The water requirements of shale gas drilling are also a red herring. Water is scarce in South Africa only in the sense that it is unevenly distributed among catchment areas, and infrastructure is old and leaky.
The water use of South Africa’s golf courses could fracture 15,000 wells. If that amount of water was drawn from the Gariep Dam in one fell swoop, it would consume 3% of the dam’s capacity.
The fall-back argument, that this water would be permanently removed from the water cycle, is also misleading. It is technically true, but that water is replenished by evaporation from the oceans. The amount of water vapour in the atmosphere is controlled by temperature, not by how much we extract from surface water. Besides, shale gas drilling can use seawater, or undrinkable brack-water from deep aquifers. Even waterless methods are available. Shale drillers may not have to make any imposition on the supply of fresh water in South Africa at all.
For disposal of wastewater, the dry, sparsely populated Karoo is actually the best possible location. If that is not good enough, techniques known in the industry as “zero liquid discharge” wastewater treatment is all the rage right now. Google it.
Do we have any confidence in the capacity of our regulators? After all, half the mines in South Africa allegedly operate in violation of (or without) the required water use licences.
Of course we don’t have confidence in regulators. We have no confidence in government, full stop. However, that is not a valid argument for prohibiting an entire industry. One could ban all mining, most manufacturing, all banking and insurance, and most agriculture on exactly the same grounds.
The fact is that South Africa needs all the energy it can get, and our regulators simply have to keep up. That they don’t keep up is what got us into our power crisis in the first place.
Some might ask whether renewables cannot be used instead of gas-fired power stations. While it would be silly not to investigate whether wind or solar can supply some of South Africa’s needs, they only offer 100MW or so per plant, and that’s not even all the time. A gas turbine can do six or eight times as much, all day, every day. So can a nuclear plant, and a coal power station like Medupi can produce 40 times as much power as a concentrated solar plant. For at least the next 25 years, it would be naive to think that renewables, or even natural gas, can replace existing power sources. They will all have to contribute to the energy mix.
Many people instinctively believe oil and gas industry companies to be dishonest. In some cases, this is indeed true. That’s why they employ marketing departments. Companies do not often criticise their own actions, except in a generic “we’re always working to be more accountable” way.
However, believing environmental activists to be honest is also a mistake. You can’t trust activists any more than you can believe corporate spin doctors.
They are no less motivated by material gains than oil companies. Greenpeace has annual revenues of €288 million ($326 million), which mostly comes from individual donors who have to be convinced by marketing to continue giving money. The WWF obtains 32% of its $266 million in revenue from individual donors, another 19% from government grants (!), and the remainder from institutional or corporate sources. There are, of course, many other environmental organisations, and they all need to continually raise donations in order to keep operating and paying staff.
The notion that they’re brave little Davids fighting corporate Goliaths is simply not true. Environmentalism is a major industry in itself. I have nothing against making money, but let’s be consistent when we consider it a motive for dishonesty.
In fact, one can cite many examples in which activists prove to be dishonest.
The main lobby opposed to shale gas in South Africa, the Treasure Karoo Action Group, has actively lied as part of a smear campaign to try to discredit me. When they called me a liar, I accepted it in good faith as a correction of my own error. However, it turned out to be no error at all, and the group engaged in a massive cover-up of the evidence that I was right in the first place. Happily, I do not trust environmentalists, and saved screenshots.
A Texas landowner, Steve Lipsky, made a video of a supposedly gas-contaminated water well, which was widely used in anti-fracking propaganda. A court declared it a fraud, in conspiracy with an environmental group, designed to defame the local gas drilling company and alarm the public.
Craig and Julie Sautner, of the small town of Dimock, Pennsylvania, claimed that their well was contaminated. They starred in both Gasland and UnEarthed. However, when journalist and film-maker Phelim McAleer asked them to demonstrate that the taps were running with foul water, they could only produce stored sample bottles of suspiciously dirty-brown water.
They insist they had their water tested and that it contained a long list of chemicals, including “two types of weapons-grade uranium”. If that doesn’t knock your bulldust detector off the scale, you don’t have one.
They refused to allow McAleer to independently test their water well, and even called the police on him. Four different regulatory agencies did test it, and found it was perfectly drinkable. (For the whole story, watch McAleer’s documentary, FrackNation, which thoroughly debunks many other anti-fracking claims, too.)
The Sautners were fishing for a settlement, that’s all. This is a lucrative pastime in the US, because settling is often cheaper for a company than keeping legal staff tied up defending lengthy court battles. Counter-suing for defamation can back-fire in terms of public relations, since it looks like intimidation designed to censor people without the legal resources of a large company.
This makes it easy to find anecdotal evidence of people making sensational claims, which is great if you’re making an anti-fracking movie, as local film-maker did with UnEarthed. However, if you’re making public policy, you need to evaluate data, not anecdotes. You need to consider evidence, not allegations.
The same is true of claimed health effects. They are always vague and hard to trace: dizziness, headaches, nausea, rash. Lots of people claim they get ill from lots of things they’re exposed to, such as non-organic food, microwave ovens, swimming pool chemicals or nearby cellphone towers. The question is how many of these effects can be positively linked to the claimed cause, and usually the answer is none.
The risk of illness caused by shale gas drilling is a function not only of what chemicals are involved, but how likely it is that anyone will be exposed to them. Shale wells are very deep, and drilled in some of the least permeable rock we know. Water moves at geological timescales down there, if at all, which makes the risk of exposure to frack fluid extremely low.
As in any industry, there is a risk of surface spills that can cause localised pollution. There have also been a handful of criminal cases of illegal wastewater dumping in the US. The oil and gas industry is not unique in this respect, however. I’ve cited a local case involving Wasteman Holdings before. It was charged with illegal dumping of medical waste in Welkom. The dump site, where groundwater was at risk of contamination, was cleaned up to the satisfaction of the “Green Scorpions”, long before the case was finalised in court. The company dramatically improved its operations as a result of this incident. There is no reason to believe things will be any different for the oil and gas industry.
If you dig into the regulatory archives in the US, where perhaps 100,000 shale oil & gas wells have been drilled, you’ll find a few hundred claims of water contamination or adverse health impacts in each shale gas region. Only a handful were ever officially confirmed. Some cases led to lawsuits, though they are often settled before they get to court.
Anti-fracking activists – like Minnaar – make much of the non-disclosure agreements that accompany such settlements. They say these prevent us from discovering the truth about shale gas. They claim such settlements constitute an admission of guilt, and imply that companies are buying the silence of their victims. They do no such thing. They prove nothing either way.
If there really was guilt, the plaintiffs would have millions of dollars’ worth of incentive to reject the offer of a settlement. Tort lawyers would be lining up to take these cases on contingency, making their fees conditional upon a favourable outcome. That so few plaintiffs were keen to pursue these millions suggests that serious pollution by shale gas drillers is rare.
You can’t blame drilling companies for asking people they settled with not to carry on badmouthing them in public.
Notably, considering how conservative corporate lawyers are, one Texas gas company did the opposite. Southwestern Energy settled a class-action lawsuit over water-contamination in Alabama for $600,000, but only on the condition that the agreement remained open, so there would be no suspicion.
I agree that it would be nice if more drilling companies did so, but that doesn’t mean we can conclude a conspiracy to cover up real pollution or health-impact cases.
When you’re no expert, it is tempting to accept the word of environmental activists at face value. It is very easy for them to go to a Karoo town, tell the residents that fracking will poison their groundwater and hand them some protest placards. It is easy to go on radio, and scare listeners with overblown horror stories. Few people are in a position – or inclined – to test their claims.
However, when one does, it turns out that all the anti-fracking arguments made by well-funded environmental activists are largely false or exaggerated.
Meanwhile, our power crisis will be with us for a long time. It might have catastrophic consequences for the economy, and won’t be solved by renewable energy for decades to come.
Let’s at least make a start at trying to do something about it. Despite the currently low oil price, shale oil and gas has been a total game-changer in the energy business. We can only hope that exploration is successful and production takes off, but we’d be stupid to pass up that opportunity for fear of some small and manageable risk. DM
Stephen Hawking held a party for time travellers. He sent the invitation out the day after. Nobody attended.