×

We've got news for you.

Register on SowetanLIVE at no cost to receive newsletters, read exclusive articles & more.
Register now

Will SA step in to fracking Pandora's box?

If it’s not viable in a favourable country like the USA‚ what chance does fracking have of success in South Africa?

The Treasure Karoo Action Group (TKAG) said on Friday: “The deep trouble in the shale drilling sector is well illustrated by the financial woes of Chesapeake Energy – the second-largest driller in the US‚ whose shares crashed 10% on July 21.”

This‚ the TKAG said‚ was widespread‚ and “during the first half of 2015‚ US shale drillers increased new debt and equity offerings by $44 billion – more than during any half year period since 2007”.

“These figures are the tip of the iceberg for the shale drilling industry. It’s plain to see that if the US banks cut the credit lines they will probably push the drillers into bankruptcy – and that if they don’t‚ they will be throwing more money after junk assets‚” TKAG leader Jonathan Deal said.

“When the big names can’t make a profit in a country where everything is stacked in favour of shale gas‚ how does one expect that they can come to a difficult operating environment like South Africa and get it right?”

“And there’s no place to hide behind the recent crash in crude oil prices – Shell‚ BP and BHP collectively wrote off more than $7 billion in the two years 2011-2013‚ and Chesapeake has posted a positive cash flow in only two of the last 24 years.”

According to Julius Kleynhans‚ AfriForum’s head of Environmental Affairs‚ the oil and gas industry is awash in a sea of debt‚ fuelled by wild speculation and unlikely claims of great wealth for investors and countries. 

 “As the pro-shale rhetoric in the US is exposed for the body of lies that it is‚ countries that have not yet gambled on this Pandora’s box are given another chance to avoid the same trap. Will South Africa step around it or into it?” asked Kleynhans.

 

 

Would you like to comment on this article?
Register (it's quick and free) or sign in now.

Speech Bubbles

Please read our Comment Policy before commenting.