BizNews‎: Lessons for SA: China’s Fracking Boom may be over before it even began

Here’s a really sobering article for those who believe Karoo shale is poised to deliver a fracking bonanza. Fracking works best when legislation encourages innovation and oil prices are high. But it stutters and can even peter out when the situation reverses. South African legislations got themselves caught up in the promise of a boom which may never happen. Witness China. Today’s Rational Alternative (video) explores the implications in greater detail.

China’s shale boom may be fizzling out before it even gets going. The nation has cut its output target for the end of the decade to a third of its earlier estimate, as difficult geology, lack of infrastructure and limited exploration rights conspire against its shale gas ambitions. Big gas import deals, a lower oil price and China’s commitment to clean energy are also weighing on shale’s promise.

“It’s a reality check for policy makers who’ve finally realized the shale gas boom may not come as easily as many thought,” said Shi Yan, an analyst at UOB-Kay Hian Ltd. in Shanghai. “Progress has been made in many areas, but none of them are big enough to trigger a shale revolution.”
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