True cost: the externalities of South Africa’s current main electricity supply technology choices[1]
Fracking for natural gas
When we talk about externalities, we mean that the true cost of something is not included, but is paid for by other people. A good example of this is the extraction of shale gas- or fracking as it is more commonly referred to. The cost of fracking does not represent its real cost as it has many environmental impacts along the entire value chain. If we were to add up the environmental and health costs of the effects of fracking, and include this in the price, fracking would no longer be seen as the cheap energy alternative that it is currently been advertised as.
Externalities of shale gas
Although South Africa does not currently rely on gas for direct electricity generation, there is increasing focus on the potential for hydraulic fracturing (‘fracking’) to provide an alternative to coal in South Africa’s economy. In addition, South Africa is considering importing liquefied natural gas (LNG), for instance from Mozambique, into a future re-gasification terminal near MossGas. Sasol already imports natural gas by pipeline from Mozambique.
The following impacts have been witnessed in other countries where fracking has been taking place:
- Land degradation,
- Water and air pollution and noise from multiple tanker and other vehicle journeys to and from well sites
- On-going costs associated with road maintenance (as has been seen in coal mining areas in South Africa).
- Where shale gas is to be distributed by pipeline and liquefied for export then there is a need for considerable additional infrastructure, which has its own impact on the environment.
Greenhouse gas emissions or hydrocarbons, (depending on the nature of the gas), from fugitive methane and volatile organic compound emissions, and from carbon emissions will add to South Africa’s overall emissions picture[2].
Geological impacts or when fracking fluid does not flow back to the surface, or through surface spillages and waste water contamination are important risks that if quantified, would put fracking into a very different cost segment.
[1] This fact sheet was extracted from the Electricity Governance Initiative (EGI-SA) Smart electricity planning report for the SA civil society Energy Caucus 2013
[2] Department of Mineral Resources. 2012. Report on investigation of hydraulic fracturing in the Karoo Basin of South Africa. Pretoria, South Africa: Working Group on hydraulic fracturing.
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