We are starting off the week by reblogging a post by School of Economics colleague Requier Wait.
Based on estimates from the EIA, South Africa’s Karoo region could hold an estimated 485 trillion cubic feet (tcf) of technically recoverable shale gas reserves. Many argue that the Karoo’s shale gas can be a “game changer” for South Africa’s energy sector. The method used to extract shale gas, hydraulic fracturing or “fracking” has been a topic of intense debate. The proponents of shale gas emphasise the potential economic benefits whilst the opponents stress the environmental dangers of fracking, such as the contamination of underground water. At this stage there is no certainty on the actual reserves present in the Karoo basin, making it difficult to compare the potential benefits and costs of developing this resource. For this reason, only ex-ante predictions of the economic impacts are possible.
The South African government has partially lifted the initial moratorium on fracking to allow exploration activities (but not yet fracking). A detailed…
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