The shale boom, as transformative as it has been, has largely remained an American phenomenon. A combination of solid infrastructure, deeper capital markets, and favorable geology helped U.S. drillers tap the previously un-tappable. Countries around the world have so far failed to follow suit, but not for lack of trying. China, the UK, and Australia have all started work on their own shale resources, and now another country—on another continent—is ready to take the fracking plunge: South Africa. Bloomberg reports:
South Africa’s President Jacob Zuma has supported shale-gas drilling in the semi-arid Karoo region, an area the size of Montana that’s the center of South Africa’s sheep-farming industry. Explorers including Royal Dutch Shell Plc (RDSA) hope to tap as much as 390 trillion cubic feet of gas resources, the eighth-biggest in the world, according to the U.S. Energy Information Administration.
But the African country has a tortured past when it comes to extracting its considerable natural resources:
South Africa has the world’s biggest platinum, chrome, vanadium and manganese reserves and is Africa’s biggest coal and gold producer. The companies that exploit the deposits have been criticized by the government for not doing enough to train workers, improve the living conditions of communities near their mines and process the minerals that they produce before exporting them. […]South Africa will make sure its population benefits when it develops its shale gas and offshore oil industries and won’t repeat the errors it made with mining, said Zweli Mkhize, treasurer of the ruling party.
It won’t be easy, but when it comes to a massive set of reservoirs of natural gas, where there’s a will, there’s a way. South Africa has the world’s eighth largest reserves of shale gas, which is motivation enough to get aboard the shale bandwagon. Whether or not it will run afoul of the same issues that have plagued its mining industries remains to be seen.