Timelines for Hydrological Fracturing Prospecting/Exploration, including Sites Earmarked for Initial Investigative Phase: DMR briefing

Meeting report

The Committee Secretary noted that some Members were held up in other meetings and thus would be unable to make it for the briefing, while asking Members to nominate an Acting Chairperson.

Ms E Prins (ANC; Western Cape) nominated Mr M Rayi (ANC; Eastern Cape).

Mr A Singh (ANC; KwaZulu Natal) second the nomination.

The Acting Chairperson noted that Mr L Gaehler (UDM; Eastern Cape) and Mr C Smit (DA; Limpopo) would not be attending the meeting due to other commitments. The Department did not follow the right procedures; Members ought to receive a copy of the report seven days before the meeting – this was not done. It was impossible to discuss a report which the Committee had no knowledge of.
Representatives of the Department tendered apologies to the Committee noting that they were unaware of the procedures.

Mr A Nyambi (ANC; Mpumalanga) said it will be difficult for the Committee to ask questions and engage in a discussion but suggested the presentation continued.

Ms C Labuschagne (DA; Western Cape) agreed with Mr Nyambi noting that it would not make sense to reschedule the meeting and it would delay the Committee’s programme.

Mr Singh also agreed with Ms Labuschagne.

Briefing by Department of Mineral Resources (DMR) on the Draft Technical Regulations
Mr Mosa Mabuza, Deputy Director General, DMR, said the inter-departmental Committee had developed draft technical regulations for petroleum exploration and exploitation to address and augment gaps identified in the current regulatory framework governing exploration and exploitation of petroleum resources, particularly in relation to hydraulic fracturing. The draft regulations further prescribe good international petroleum industry practices and standards that will enhance safe exploration and production of petroleum. The draft regulations have been published for public input and comments and the Department was in the process of consulting interested and affected communities. The legislative framework which upstream oil and gas activities are governed by includes the Mineral and Petroleum Resources Development Act, 2002 (Act No.28 of 2002), National Water Act, 1998 (Act No.36 of 1998), National Environment Management Waste Act, 2008 (Act No.59 of 2008), National Radio Active Waste Disposal Act, 2008 (Act No.53 of 2008) and the Astronomy Geographic Advantage Act, 2007 (Act No.21 of 2007); the regulations are meant to augment these existing framework.

Shale gas is a form of natural gas found trapped within shale formations, the shale layer lies between 1500 - 4000m below the surface and is overlain by thick and tight geological formations that may act as a barrier to protect ground water. Due to it being found in low or non permeable formations, its production is enhanced by hydraulic fracturing. Shale gas therefore requires special completion, stimulation and production to achieve economic production. Hydraulic fracturing is the pressurized injection of a mixture of water chemicals, and sand in underground formations (rocks with low or non permeable) to allow natural gas and oil to flow more freely from the rock pores to a production well. Regulation five is to help understand possible threats associated with hydraulic fracturing and to do this one must understand the geology of the location, it also helps the regulator determine appropriate protective regulatory measures.

There are different types of casings (steel pipes) installed for protecting groundwater, the casings must be able to withstand the various compressive tensional, and bending forces that are exerted while running in the hole, meaning it must at least withstand 1.2 times the maximum pressure to which it may be subjected during operations. All casings must be in accordance with the API "5CT Specification for casings and Tubing" which specifies the length, thickness, tensile strength and composition of casings. Cement requirements are important because after the casings are run into a hole it must be cemented in place which is important in maintaining well integrity. Cement also plays an important role in isolating hydraulic fracturing operations from fresh water and other permeable horizon, a well that is not cemented properly leads to gas leaks into the other units, particularly drinking water aquifers. The Water Resources Assessment and Monitoring Regulation provide a baseline for water quality assessment by an independent specialist for a period of a year prior to operations and continued sampling of water during operations to determine changes, if any. To regulate the distance between hydraulic fracturing well and streams, wetlands as well as existing municipal water wells, the Protection of Water Resources Setbacks Regulation will be enforced; it provides for the disclosure of water supply source, location and water usage volume.

In conclusion, comprehensive monitoring and evaluation of progress and compliance - throughout the associated activities, will be done. The finalisation of the Technical Regulations for the development of shale gas to mitigate inherent risk is planned for December 2014- the draft regulations, once they have been finalised, will result in a regulatory framework that ensures safe exploration and subsequent potential extraction of gas. By next year the Department hopes to issue permits for exploration of shale gas.

Discussion
Mr Singh asked if any parts of KwaZulu Natal were included in the planned explorations of shale gas, since such activities would occur in the Karoo. Referring to the granting of permits, has the Department received applications from local entities or were applications from international entities only? Which countries have refused to have shale gas explorations and which countries have allowed the explorations.

Ms Prins asked how the Department planed to dealing with water shortages after and during the exploration.

Ms B Masango (DA; Gauteng) requested clarity on the issuing on permits; has the Department issued any permits yet.

Ms Labuschagne asked what the lifespan of the casings are and what type of method the Department planned to use for the exploration and installation on the casings. Has the amount of water to be used during the explorations been determined, especially in the Karoo.

Mr Nyambi asked if the concepts can be used interchangeably- the Department referred to the process as fracturing, while others used the word fracking. Referring to consultations; how would the Department include stakeholders in the developments, besides those that will be directly affected?  The proposed timeframe of planned developments was worrisome- it extends until December/January; will the Department work during the holiday period while others were on holiday.

Ms Annette Lovemore (DA), a member of the National Assembly, asked who will be in charge of the monitoring and evaluation; will the Department carry out this function itself or will it be done by an inter-departmental committee?

Dr Thibedi Ramontja, Director General, replied saying there will be no gas explorations in KwaZulu Natal- provinces which have been identified by investors are the Western Cape, Northern Cape and the Eastern Cape. The investors have not shown any interest in exploring KwaZulu Natal. The United States of America, China and Poland are amongst the countries which have been involved with the exploration of shale gas; there are of course many others but these three have been the most exclusive. There has been a scheduled plan of how the developments will take place and where the locations for explorations are; in the plan is detailed information on the amount of water to be used for exploration. Other fluids, like propane, have been considered for usage in the place of water. No company has been given exploration permits yet to undertake hydraulic fracturing; there are some that have applied for permits but the Department is not in the state to issue any out and this is because investigations have to be made by the Department first before fracturing can take place. Fracturing and fracking have been used interchangeably but the Department prefers to use the word fracturing. The Department itself will be in charge of the monitoring and evaluation processes. Consultation meetings with stakeholders will include the sharing of information and ways to go about doing exploration; the Department of Water Affairs and the Department of Environmental Affairs have been part of the consultations, as well as being involved in the monitoring and evaluation process, because they are also concerned about the environment and their portfolios. Communities will have the opportunity to give comments, especially those who will be affected by the developments. The Department realises that December and January are holiday periods but wishes to finalise the consultations before the holidays start.

Ms Lovemore asked how the consultations will take place; will they be in the form of information sharing or on the basis of advising. Also, how will people know of the consultations, is there a programme which the Department has communicated to stakeholders or communities.

Ms Labuschagne asked if the areas which have been identified for fracturing have been zoned by the municipalities.

Mr Mabuza replied saying the consultations will be in the form of sharing information and the views of stakeholders to strengthen their developments. The municipalities are involved in the processes and areas have been protected for future use.

The Acting Chairperson said he would like a copy of the comments and views from the stakeholders once the Department was done with consultations.

Consideration and Adoption of Minutes
Ms Prins proposed the adoption of the minutes.

Mr Singh seconded the motion for adoption.

The meeting was adjourned.