PRETORIA, Sept 3 (Reuters) - Companies seeking shale gasexploration permits in South Africa will need to apply for awater usage licence, the country's water and environmentalaffairs minister said on Tuesday.
South Africa last year lifted a moratorium on shale gasexploration in its Karoo region, where the extraction techniqueknown as fracking might tap what is believed to be some of theworld's biggest reserves of the energy source.
That decision aroused criticism from environmentalists whosay water supplies could be polluted by fracking, in whichpressurised water, chemicals and sand are pumped underground torelease gas trapped in shale formations. Water is also a scarcecommodity in the vast, semi-arid Karoo region.
"I have taken the decision to issue a notice of intention todeclare fracking a controlled activity in terms of the NationalWater Act ... What this means is that fracking becomes a wateruse, thus requiring a water use licence," water minister EdnaMolewa told journalists.
The regulatory process around fracking in South Africa hasbeen slow and no exploration permits have been issued yet.
Companies that have expressed an interest in exploring SouthAfrica's shale gas potential include Royal Dutch Shell.
Developing just a 10th of South Africa's estimated resourcescould boost the economy by 200 billion rand ($19.56 billion) ayear and create 700,000 jobs, a study, commissioned by Shell andcarried out by research firm Econometrix, said last year.
But environmentalists have raised the alarm about frackingin the country, which has a large network of conservation groupsand a history of green activism.
The sparsely populated Karoo is renowned for its ruggedscenery and is home to rare animal species such as the mountainzebra and riverine rabbit, putting it on the radar screen ofconservationists.