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Supporting Communities

Company News Monday, March 11, 2013: Air Con-Nected Lubricants

South Africa has a great opportunity to secure a sustainable energy future, reducing its dependence on coal by using more environmentally friendly options available in this country, such as natural gas.

A plentiful supply of natural gas – the cleanest of all fossil fuels – may exist in parts of the shale rock formations deep beneath the surface of the South Western Karoo Basin. These can help secure South Africa’s energy future, but only if we can preserve the unique character of the area as well. We know that the Karoo’s most precious resources – its people and its communities – must come first.

South Africa’s Journey

South Africa’s CO2 reduction target is one of the most ambitious amongst developing countries with the commitment made at Copenhagen to reduce greenhouse gas emissions by 34% by 2020 and 42% by 2025 below business as usual. Mitigation actions in the energy sector are key to achieving these reductions given the sector accounts for over 80% of the country’s emissions. Therefore, diversification of the energy mix is required and natural gas could be instrumental both in meeting growing energy demand and contributing to these emissions reductions targets.

Natural gas could provide South Africa with a stable, sustainable alternative energy source to coal for power generation, that is 40% more energy source to coal for power generation, that is 40% more energy efficient and emits 50-70% less CO2.

Shell has indentified a potentially plentiful supply of natural gas in parts of the shale rock formation deep beneath the surface of the South Western Karoo Basin, and we are currently going through a South African government license application process, including public consultations, to determine if natural gas deposits could be economically and responsible recovered.

Working with local communities

Wherever we operate, and wherever we provide energy, we are part of a community – which means more than running our operations cleanly and safely. It also means working with people close to our operations to understand their concerns, learn from them and use their experience to design the project to reduce social and environmental impacts as far as possible and bring benefits to communities whether economic or social.

We strive to strengthen the communities in which we operate whether in the for of jobs – the Sakhalin Project in Russia employed approximately 25 000 people during peak production, the majority of whom were Russian – economic progress – In the 2008, the natural gas industry across the Louisiana state in the US, that includes Shell’s Haynesville operations, generated more than $2.4 billion in new business sales, creating more than $3.9 billion new household earnings for Louisiana residents, and leading tomorrow than 30 000 new jobs within the state – or local resources development – from last year Shell South Africa was the first international oil company to achieve BBBEE (Broad Based Black Economic Empowerment) accreditation. And we make sure that local concerns are addressed and incorporated into our operations.

In the Karoo, we will take the same approach to ay eventually development of natural gas resources.

Right now, we are talking to the people of South Africa about the process of exploration. If we get a licence we will be doing an environmental, social and health impact assessment which will involve extensive consultation.

Working with local communities, non-governmental organisations, environmental experts and regulators is the only way to develop this project to ensure that it happens in harmony with the environment and the people.