Oct 30,2012 / News / Legal Brief

“The Minister of Mineral Resources’ decision to lift the moratorium on hydraulic fracturing or “fracking” does not entail that we are likely to see drill rigs erected in the Karoo any time soon” says Justin Truter, head of Werksmans Attorneys’ environmental law practice.

Truter is representing one of the objectors to the fracking exploration applications on whose land two energy companies, Shell and Bundu Gas and Oil, believe deposits of natural gas may be embedded deep underground in the shale rock. He also successfully represented the Western Cape provincial environment Minister in a landmark mining case that was decided in the Constitutional Court earlier this year*.
“A number of hurdles still need to be cleared by the applicants. Although most of the focus by objectors has been on environmental concerns, a further, potentially more significant obstacle has recently arisen. In February this year, the Constitutional Court upheld the earlier findings of the Cape High Court and the SCA that mining activities entail a land use which, if inconsistent with a property’s zoning, would require the rezoning of the land or a temporary departure from the land’s zoning before the mining activities may commence, notwithstanding any mining right or permit held under the Minerals and Petroleum Resources Development Act (MPRDA). Depending on the nature and extent of certain exploration or prospecting activities, the same legal principle may apply.”
Unlike other forms of exploration, there is little difference between the exploration and the actual production processes when it comes to fracking. In Truter’s view, both exploration and production will constitute a land use for the purposes of the Land Use Planning Ordinance (LUPO) which, if inconsistent with a property’s zoning, will necessitate that it be rezoned to an appropriate zoning or that a temporary departure from the designated zoning be granted, notwithstanding any exploration right held under the MPRDA.
“And herein lies the rub…” according to Truter  “…most of the land in the 90 000km2 exploration area is zoned rural or agricultural which does not permit fracking as a land use and furthermore, under LUPO only a land owner  may apply for a temporary departure to permit a land use which is inconsistent with the land’s zoning. Ordinarily it is also only a land owner who may apply to rezone his land.”
“There may be a handful of landowners willing to have their land rezoned or a temporary departure granted to permit fracking but for most, this is unlikely to be an attractive option,” Truter says. “Fracking and its associated activities is an invasive form of exploration with potentially significant environmental impacts which represents the antithesis to why most of the landowners in the Karoo acquired their land in the first place.”

Without the cooperation of the landowners, companies wanting to explore for shale gas through fracking have three other options – none of them easy.

BETWEEN A ROCK AND A HARD PLACE

“One alternative is for the mining applicants or the Minerals Minister to approach the provincial government to amend the zoning scheme regulations. Another alternative is for the mining company or Minerals Minister to request the Provincial Minister or municipality to invoke their powers to rezone land.” Truter says. “This could be achieved, but involves a lengthy and thorough process of consultation with land owners and affected communities as well as stakeholder and public participation processes. Any decision to amend the zoning scheme or rezone land contrary to the wishes of affected landowners is likely to be challenged on review in the courts which would bring about further delays and may be overturned.”
The third alternative is for the Minerals Minister to invoke her powers under section 55 of the MPRDA and expropriate the land if it is necessary for the achievement of the objects of the Act. “Considering the size of the exploration area, the cost implications of this would be prohibitive in our view,” he says simply. “Any expropriation will almost certainly also end up being challenged on review in the courts by affected land owners.”
Regardless which route is ultimately followed, it is clear that the lifting of the moratorium on fracking is but the first step in a series of lengthy processes that will be required before any fracking can commence in the Karoo. Considering the constitutional issues at stake, the Constitutional Court is likely to be the final arbiter on the matter and be called upon to undertake the difficult balancing act that sustainable development demands – balancing the potential environmental, social and economic impacts and benefits of shale gas exploration by hydraulic fracturing.
 
*Maccsand (Pty) Ltd versus City of Cape Town and others; Minister for Mineral Resources and Swartland Municipality