Hon Deputy Speaker, we would like to thank the Minister for the statement made on this very important subject matter. [Interjections.] The ANC supports the Cabinet decision to lift the moratorium on the exploration for the existence and the extent of shale gas resources in the Karoo Basin. We are basing our support on three principles: firstly, that the country is pursuing a clear policy on energy mix that includes fossil fuels, gas renewables and other clean energy technologies; secondly, and very importantly, that the people of the Karoo Basin are trapped in abject poverty and high levels of unemployment, which we will discuss later in this input; and, thirdly, that the concerns of the water table and possible contamination of drinking water, as well as degradation of the environment by the process of fracturing are adequately addressed through the stringent conditions imposed at the lifting of the moratorium by Cabinet, as alluded to by the hon Minister.
To further substantiate our view, we will quote both from historic and future plans, such as the National Development Plan, that -
... the South African economy is well endowed with mineral resources, with large global shares in platinum group metals, gold, diamonds, manganese, coal, iron ore and uranium. Yet, over the past decade, the mining sector has failed to match the global growth trend in mineral exports due to poor infrastructure and regulatory and policy frameworks that hamper investment. South Africa can benefit greatly from Asia's growing demand for commodities. To do so means improving water transport and energy infrastructure and providing greater policy and regulatory certainty to investors. This will enable the mining sector to deploy the skills, resources, know-how and capital that are available and for government to raise much more tax revenue than it does at present.
The above quote highlights the importance of energy in the economic development of the country. South Africa is currently heavily reliant on coal for its energy sources. In acknowledgement of this fact, government undertook to explore other energy sources so as to achieve the high energy mix. The 1998 White Paper on the Energy Policy of the Republic of South Africa committed the government to ensuring the optimal and environmentally sustainable exploration and development of the country's natural oil and gas resources for the benefit of all. The successful exploitation of these natural resources would contribute to the growth of the economy and relieve pressure on the balance of payments as South Africa is currently importing a larger percentage of crude oil and natural gas.
The government would perform regulatory and promotional functions in respect of oil and gas exploration and production through entities which have clearly defined roles. The Petroleum Agency of South Africa, Pasa, was established for this purpose. In May 2011, government placed a moratorium on applications for rights to explore for shale gas in the Karoo until it had formulated a policy, as the Minister had alluded to here. Hydraulic fracturing, which others referred to with a derogatory term, "fracking," is a process that was outlined here by the Minister.
The shale gas reserves in the Karoo are estimated to be around 485 trillion cubic feet which would make it the fifth largest shale gas field in the world. It is estimated that shale gas opportunity in the southern Karoo could add a substantive amount to the gross domestic product, GDP, annually and create much needed sustainable jobs, especially in a depressed area such as the Karoo Basin. For example, Mossgas in Mossel Bay was established on the basis of only 30 trillion cubic feet shale gas resources and created about 1 600 jobs. It could also ensure South Africa's energy security, according to an Econometrix report.
The study by Econometrix also found that successful exploration of shale gas in the Karoo Basin would lead to increased government revenues. The study found that large scale development of shale gas could ease the energy deficit, making it cheaper for South Africa to grow in the future and reduce imports of gas and electricity. Consumers would also benefit from more reliable and affordable energy.
Shale gas is a natural gas that is present in shale formations deep underground and has wide-ranging industrial and commercial uses, as well as being suitable for electricity generation. Shale gas can be converted into liquid fuel, be used as transport fuel with minimal adjustments to existing engines, and it may be used to provide energy necessary in manufacturing fertiliser products.
The successful exploration of shale gas in the Karoo will come as a relief to the district which has the highest number of people living in poverty. You must listen to this, hon member from the FF Plus. In the Western Cape, the Central Karoo alone is at a poverty level of 32,5%, followed by the West Coast at 30,4% and Overberg at 29,6%. The rate of unemployment in the Central Karoo is staggering, hon Koornhof from Cope, at 30,8%. Moreover, the number of indigent households is at 5 903, and it is growing. These are the factors that we must take into account when we take policy decisions. Regarding the Human Development Index, that which quantifies the extent of human development of a community, of all districts in the Western Cape, Central Karoo, once more, is the lowest, standing at 0,60. This poses a huge challenge to the district to create more employment opportunities to improve the standard of living in the area. Life expectancy is shown to be low due to high mortality stemming from the disease of poverty.
However, we agree that there are environmental concerns associated with hydraulic fracturing. These environmental concerns can be mitigated through efficient regulations. The Working Group of the Task Team on Shale Gas and Hydraulic Fracturing made very clear recommendations, as the Minister articulated here, to the Minister of Mineral Resources.
In view of the above, a balance has to be reached between environmental concerns and economic benefits that can be derived from the exploitation of shale gas reserves. This balance can be achieved through an efficient regulatory framework that addresses environmental concerns, while addressing the challenges of poverty and unemployment. We stand at the beginning of a new era, one in which we have the opportunity to reduce our carbon emissions and reliance on fossil fuels and to meet both our national and international commitments but also honour what we undertook at COP 17 in December 2011. Therefore the ANC reaffirms its support for the lifting of this moratorium and the responsible decisions that have been taken.
Hon Lorimer, on the question of credibility, when we look at the exploitation of this reserve and the whole question of cronies, we must just understand that the fact that people belong to a particular organisation, in this instance, the ruling party called the ANC, does not exclude them from business opportunities that do arise. [Interjections.] They have equal standing and the same opportunity as all other citizens in South Africa. I am sure, if we can conduct an audit, I don't know how much we can uncover on this side of my hand, in terms of business connections and business ventures that you are undertaking. [Interjections.] Thank you very much.
Debate concluded.