Exploring the Karoo gas means balancing environmental and energy security

Fracking could be back on the cards to claw back lost energy opportunity.

TotalEnergies in recent years made two gas discoveries, Brulpadda and Luiperd, off the coast of Mossel Bay, which could, according to the company, not be turned into a commercial development as it appeared to be too challenging to economically develop and monetise these gas discoveries for the South African market.

“It makes it an especially difficult pill to swallow given the economic benefits that it would have brought to the Southern Coast and the rest of the country,” says Kapdi.

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Although other players have indicated interest in picking up the project, there are no guarantees that bids will be successful given the challenges, and red tape is likely to cause significant delays that could see the project being abandoned entirely.

However, Kapdi adds, the newly formed Government of National Unity (GNU) may positively influence how the cookie crumbles, but only time will tell.

“If you look at where the market is in terms of oil and gas, this project would have been perfect for South Africa,” he says.

“Unfortunately, we are losing economic opportunities to our neighbour in Namibia, as many key players have made several hydrocarbon discoveries there.”

Namibia is a hotspot

Reuters reports that Namibia has become an oil and gas exploration hotspot in recent years after several discoveries in the Orange Basin, Luderitz, Kavango and Walvis basins, which is touted to bring significant economic spin-offs to the nation.

Noor Kapdi, CEO of Dentons South Africa

Kapdi says that against the latest turn of events, the argument for fracking in South Africa becomes a lot more urgent.

“We have depleted our gas reserves in Mossel Bay, yet we know that we have gas reserves elsewhere in the country,” he explains.

“And recent research tells us that gas can play a role as a transition fuel, potentially replacing more emissions-intensive fossil fuels like coal and diesel if supplied affordably,” says Kapdi.

Reduced reliance on coal

He says that the significant economic benefits from proposed shale gas fracking, including job creation, cheaper electricity, and reduced reliance on coal, are enormous.

However, environmental considerations must also be considered.

“Environmental concerns need to be taken into consideration. We need to reduce CO₂ emissions across the globe as we seek to meet the United Nations’ target of Net Zero by 2050,” says Kapdi.

“But – as a country – we need to be careful to not only focus on one aspect of fracking.”

We need to take into account the massive potential for job creation, which is not limited to direct jobs, but could also indirectly create opportunities for entrepreneurs who open their own businesses, for example.

Karoo blocks

In 2023 the government announced that it would auction at least 10 new onshore blocks for shale gas exploration in the Karoo region in the near-term future, an idea that was shelved for a decade because of resistance from environmental activists and farmers, and regulatory uncertainty.

“We advocate for climate justice, emphasising rational, middle-ground solutions tailored to the South African context, and avoiding extreme positions that overlook the realities of our unindustrialised society,” concludes Kapdi.

“There is no reason why there can’t be a balance between ensuring that the environment is protected, while also creating jobs and desperately needed energy sources, at cheaper costs.”