Unconventional natural gas in South Africa: regulating the nexus between energy and water security

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5 March 2015 | Hennie Coetzee

South Africa faces the challenge of meeting the needs of its (still) growing human population, and of doing it in a sustainable way, namely without affecting the ability of future generations to meet their needs. Energy plays a central role in this challenge, both because of its significance to economic development and because of the number interfaces and impacts it has on other critical sustainability issues – such as water security, among others. In its quest for energy security, the South African government has identified unconventional gas (shale gas and coal bed methane) as a potential alternative energy resource.

Coal bed methane is already being extracted in the Waterberg area of South Africa and the country is also looking to extract shale gas from the Karoo area. The development of unconventional gas, however, poses a number of new challenges to existing regulatory regimes worldwide, including South Africa. These challenges are particularly pertinent to water resources. The development of unconventional gas is (like most other fossil and some renewable energy sources) heavily dependent on water access and use. This is mainly due to the extraction method of hydraulic fracturing whereby large amounts of water is mixed with chemical additives and pumped down a horizontal well under high pressure to enable the extraction of the trapped gas. Studies indicate that the use of horizontal wells during a typical hydraulic fracturing process can require up to five times the water used by vertical wells. The withdrawal of large amounts of groundwater can lead to the depletion of aquifers, and the hydraulic fracturing fluids known as flowback water, poses risks to water quality. Issues of water security relating to water quality, quantity and availability are therefore at stake. Because of the interdependence between the energy and water sector, an increase or decrease in one sector (energy or water) will immediately affect the other. South Africa is already struggling to maintain security of both water and energy supply and hence the energy-water nexus is very much related to its goal of achieving energy and water security.

A report by the World Economic Forum highlights the interrelated risks between energy and water security as a security problem.  In addition other nexus frameworks include the notion of security as a normative goal complementing or even replacing the notion of sustainability. The “nexus approach” is a new way to frame the interconnected challenges in water and energy governance, including within sustainable development policy goals. What is new about the nexus approach is that it considers multiple sectors as equally important. Common features of existing energy-water nexus frameworks are interdependency between policy sectors, the need for integrated management across sectors and scales, and a focus on promoting security.

While large amounts of water is needed for producing almost all varieties/types of energy – for example, cooling, storage, biofuels, hydropower – it is the process of hydraulic fracturing within unconventional gas development that poses the biggest risk to water quality in South Africa. Concomitantly large amounts of energy are needed for pumping, storing, transporting and treating (for example, desalination) of wastewater – such as wastewater created from the hydraulic fracturing process during unconventional gas development. An increase or decrease in one sector (energy or water) will immediately affect the other – if water is in short supply during droughts it may well lead to energy crises. As per the World Energy Council: “freshwater is required for each step – energy extraction and production, refining and processing, transportation and storage, and electric-power generation itself.” Without water and energy it will neither be possible to satisfy basic human needs nor achieve economic growth. Notably, energy and water security risks depend upon the balance between economic, social and environmental consequences. The cost of attaining energy and water security could be economic (eg) building new or replacing old energy and water infrastructure), social (eg closing energy and water allocations to restrict demand) or environmental (the pollution and deterioration of freshwater systems to reduce the risk of water shortage etc).

While the drivers of energy and water security risk include socio-economic factors (such as population growth and economic activity) and natural phenomena (such as natural disaster, climate change impacts) it is the policies of each sector that are the biggest cause of risk. This is the result of spill over effects – for example, the creation of incentives to meet energy security objectives results in the distortion of the demand for water. Managing energy and water security risks necessitates the managing of trade-offs between separate or sector policy instruments. Uncoordinated policy aimed at security in one area may result in less security in another: for example, less water security may be at the cost of greater energy security through unconventional gas development. Law as a social regulatory instrument is used to change human behaviour – and to achieve certain outcomes. Although a number of instruments within any regulatory framework could be used to meet energy and water security target(s) it is direct regulatory instruments such as laws or regulations stipulating, for example, quality standards, bans on certain products or practices, requirements for the application of best available techniques, obligations to obtain authorisations that are representing the bulk of instruments used.

The nexus between energy and water related security objectives are not routinely addressed nor fully understood. While the existence of the interdependence between energy and water is acknowledged in energy and water security terms it is not certain whether the nexus (between energy and water security) is reflected in the South African regulatory framework generally, and specifically with regard to the development of unconventional gas. Regulatory frameworks that do not reflect the nexus between energy and water security, could, instead of ensuring energy and water security, achieve the opposite, namely energy and water insecurity. This is applicable to regulatory regimes worldwide, including that of South Africa. Therefore it may be necessary to determine how other countries regulate and facilitate unconventional gas development and production within an energy and water security nexus.

A focus on the environmental impact(s) that pollution and depletion of water resources from the process of hydraulic fracturing within unconventional gas development may have on energy security (being an essential element of the energy/water security nexus) may provide a reference point for a comparative study on how other countries manage the energy and water security nexus in their respective regulatory frameworks.

This blog was originally posted by the Environmental Law blog of the Tilburg UniversityTo read the original blog, click here.