mead cohen berger shevtsova garfinkle michta grygiel blankenhorn
Fracking Abroad
South Africa Revives Its Wayward Shale Ambitions

Almost exactly one year ago the energy major Royal Dutch Shell announced it would be abandoning its shale projects in South Africa. Frustrated by permitting delays and the pinching effect collapsing oil prices were having on its capital expenditures, Shell walked away from a shale basin estimated to have 390 trillion cubic feet of natural gas. Now, as Reuters reports, the South African government is saying it will start permitting shale exploration over the next year:

“Exploration activities are scheduled to commence in the next financial year. This will lead to excellent prospects for beneficiation and add value to our mineral wealth,” [South African cabinet members said in a statement].

Shell said last March it was pulling back from shale gas projects in South Africa due to lower energy prices and delays in obtaining exploration licenses.

The energy major, however, said on Tuesday it could still have an interest in exploring in the Karoo. “Should attractive commercial terms be put in place, the Karoo project could compete favorably within Shell’s global tight/shale gas and oil portfolio,” the company told Reuters.

As amazing a story the U.S shale revolution has been, it’s also been a singular phenomenon, seemingly incapable of being replicated elsewhere in the world (though not from lack of trying). Shale fails abroad for any number of reasons, including a lack of access to the water necessary to frack, opaque and frequently onerous government regulations and red tape, unfavorable geology, a dearth of capital, and often local opposition. All of these hurdles serve to reinforce just how long the list of necessary conditions for a shale boom really is, and how special America’s success story has therefore been.

But South Africa—like ChinaPolandthe UK, or Lithuania—won’t want to hear about how its failures cast the U.S. shale renaissance in an even more favorable light. By green lighting permits, South Africa hopes to woo back energy companies interested in its shale. Still, with oil hovering around $40 per barrel, the country’s path towards success will be a steep uphill climb.

Features Icon
Features
show comments
© The American Interest LLC 2005-2016 About Us Masthead Submissions Advertise Customer Service