US offers to share lessons on responsible shale industry development

The US has offered to share with South Africa lessons arising from a recent study into ways of reducing the environmental impact and improving the safety of America’s fast-growing shale gas industry, which has expanded from almost nothing at the start of the century to supplying nearly 30% of that country’s natural gas production.

The offer was made by US Deputy Energy Secretary Daniel Poneman during the second US-South Africa Energy Dialogue, held in South Africa during early January – the inaugural dialogue took place in Washington, DC, during April last year.

Poneman and his delegation, which included energy and nonenergy government officials and agencies, had detailed discussions on prospects for shale gas, as well as on a range of other energy issues, including the future of Iranian oil supply, South Africa’s nuclear energy aspirations, as well as the country’s renewable energy, smart grid and energy efficiency initiatives.

Opportunities and risks associated with the exploitation of shale formations were spoken about “a lot”, as well as how such exploitation could be conducted in a way that protected human health and the environment.

The US delegation also elaborated on the benefits the sector had delivered in diversifying the energy mix and creating a new export industry – the US had moved from being an importer of liquefied natural gas to an exporter, based on the rapid development of the domestic shale gas industry.

But the report, published in November and drafted by a diverse group of advisers to Energy Secretary Steven Chu, made several recommendations regarding the need for increased measurement, improved environmental management and heightened public disclosure on shale gas operations.

In fact, 20 recommendations were made to improve environmental performance, underpinned by strong regulations and rigorous enforcement.

The key recommendations related to improving access to information about shale gas production operations, taking actions to reduce environmental and safety risks, the creation of a ‘Shale Gas Industry Operation’ body to support and improve best operating practices, and additional research and development to improve safety and environmental performance.

That said, the US government remained of the view that its shale gas resources, when developed with appropriate safeguards to protect public health, could play a material role in domestic energy production.

Poneman insisted, though, that the US would not seek to influence the outcome of South Africa's ongoing investigation of the potential costs and benefits associated with exploiting local shale gas opportunities. The US Department of Energy estimated the South African resource to be one of the largest globally, at 485-trillion cubic feet.

The South African review was already being contested by antifracking lobby groups, owing to the fact that the identities of those conducting the study had been kept confidential.

In fact, in a recent court ruling, Mineral Resources Minister Susan Shabangu was given until the end of January to supply the Treasure the Karoo Action Group with an affidavit stating why her department did not want to reveal details about the composition of the fracking task team.

While the investigation was under way, a moratorium had been placed on shale gas prospecting.

"South Africa is, correctly, doing its own study ... but we stand ready to share our experiences,” Poneman said.

He added that, should South Africa proceed with shale exploration, it should do so on the basis of full transparency and in a manner that would build public confidence in what is still regarded as a controversial industry.