Economist Tony Twine died on Sunday, 11 March 2012 at Jo'burg's Milpark Hospital following a heart attack during the week. He was 57 years old. I read that news as I was sitting in the departure lounge of Washington Dulles Airport waiting to board my flight to London.
It was one of those unexpected coincidences. I usually take an assortment of things to read with me when I travel overseas as the uninterrupted hours on a long haul flight give one time to digest information in an unhurried way. The coincidence was that I have been reading intermittently over the past days Econometrix's "Special Report on economic considerations surrounding potential shale gas resources in the southern Karoo of South Africa". The report was released last week and authored by Twine.
I had worked with Twine briefly in 1997. I was in management at Independent Newspapers at the time on the wage negotiating team, and we had asked Twine to do a presentation to us and the unions on the economic outlook for the year ahead. There were rumblings of discontent from many of the union representatives until Twine stood up to speak – at which point an astonished silence displaced their nattering. Twine, you see, was blind. And that fact gave him a sense of credibility with audiences everywhere. This also makes him a good person to comment on the shale gas story which is today one of the more contentious environmental issues in this country.
Natural gas is produced in two ways generally. The first is biogenic, meaning that it's created by living organisms in swamplands or marshes (not unlike the bacteria in your gut acting on the beans you might have had for lunch). The second way is thermogenic, meaning that it is created by heat acting on buried organic matter beneath the earth's surface.
For some years now, scientists have calculated that massive reserves of natural gas exist in many parts of the world which, if tapped, could serve the energy requirements of the planet for decades to come. The problem, however, is that most of the gas does not exist in easily-accessible reservoirs. It lies four to five kilometres beneath the earth's surface trapped inside soft finely-stratified sedimentary rock known as shale. Think of it as a sponge that has dried up so that one cannot squeeze the air out of it.
Recent developments in technology have created a way to get at the gas. It involves pumping a mixture of water and chemicals into the shale at extremely high pressure, which displaces the gas forcing it to the surface. The process is called hydraulic fracturing, colloquially known as fracking.
Three foreign-owned companies were given permission by our government to explore for shale gas. One of the areas where shale gas is believed to exist is that sprawling dry expanse called the Karoo and early desktop research indicated a high probability that the Karoo's reserves were viable. Royal Dutch Shell applied for a permit to begin physical exploration. Waiting in the wings were environmental groups who began an intensive campaign to stop the exploration, claiming risk of severe environmental damage. They were partially successful. Government declared a moratorium on exploratory drilling pending the release of Twine's report.
Now we could sit and argue the merits and demerits of pumping toxic chemicals into the earth's crust until we are blue in the face. What is clear to me though is that notwithstanding the possibility of some environmental damage, fracking in the Karoo has to go ahead.
Right now, we consume the equivalent of around 555 000 barrels of crude oil per day. By my calculation, at $125 per barrel, that translates to about R520 million per day.
The estimated reserves of shale gas in our county is around 500 trillion cubic feet. Brian Kantor, former head of the school of economics at UCT, estimates that this is equivalent to 400 years of crude oil requirements at our current rate of consumption.
Think about that for a second: as a nation, we free ourselves from spending a half billion rand per day propping up corrupt misogynistic regimes in the Middle East, and instead spend that money on infrastructure dedicated to oil from gas production. All of those related jobs stay in our country. For 400 years.
So my message to all of those self-righteous self-proclaimed guardians of the environment who would rather keep us in servitude to the Arabs, you can just frack off.