SA needs shale gas – Stroebel

South Africa needs to increase its energy supply drastically, because this is the biggest issue preventing the country from moving forward, Agbiz’s Lindie Stroebel told delegates at a meeting of the Agri Business Chamber Eastern Cape in Port Elizabeth recently.

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It was for this reason – and the fact that the country had only a limited amount of coal – that the shale gas project was necessary, she said. “It will have a significant impact on the development of the country, as many large international businesses currently have to turn down possible investment here, because Eskom isn’t in a position to guarantee the electricity supply needed,” said Stroebel.

“To create an environment to increase domestic and foreign investment in manufacturing, mining, agriculture and processing industries, the country needs base load electricity and security of supply at reasonable and competitive prices.” Should it go ahead, the success of the project would largely depend on “Shell’s integrity”, said Stroebel. But “a major project comparison shows that the proposed shale gas project could contribute about R200 billion at its highest and about R80 billion at its lowest level to the GDP, compared to Sasol’s R160 billion and the motor industry’s R200 billion.”

Stroebel added that the shale gas project and its suppliers could together create as many as 704 000 jobs at its highest level and 293 000 at the lowest level. Sasol has 194 000 job opportunities and the motor industry 500 000. However, should the project be approved, extraction would be at least 10 years away, said Stroebel. “It is currently waiting for licences, while a monitoring committee is checking regulation and overlook operations.

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Then the Environmental Impact Assessment will take about two years and should licensing be approved, exploration will take between five and six years, with the result that extraction will not start before about 10 years.” Stroebel said the other important challenges facing SA’s economy included government regulation/legislation, food sustainability, land and agrarian reform, and the lack of a sustainable economic environment.

She said the country needed the Expropriation Bill. “We are concerned that current use, or productivity of land, could replace market value. If the country sticks to the Constitution then market value will prevail.” Stroebel also pointed out that the Black Economic Empowerment Amendment Bill would now be compulsory. This meant everyone, including farmers, would have to get a licence to do business in future.

“The farming community is the area of concern,” said Stroebel, as many farmers are unaware of how to comply, so “there is a huge void that still has to be cleared”.