THE retreat of Shell fracking officials back to their eyrie in The Hague is symbolic of the loss of confidence in SA’s chances of producing shale gas on a profitable basis.

This may be extremely good news for the Karoo. As fracking is unlikely to fly (until, says Shell SA CEO Bonang Mohale, the oil price rises again to $60-$80 a barrel) we meanwhile have a chance to get a number of issues right.

Fracking would have placed a great deal of strain on the Karoo.

Finding extra amounts of fresh water, disposing of huge amounts of hazardous and radioactive waste, threatening agricultural jobs, contributing to social dislocation, accelerating climate change, contaminating precious aquifers — all of these matters would have compromised future development.

For fracking, job creation would have privileged foreign expert workers and only a few Karoo locals.

Without the spectre of fracking, the debate on Karoo development should begin in earnest.

How do we shift from colonial landholding patterns?

How do we create a more equal, stable and prosperous region?

How do we reverse the legacy of apartheid?

These are all significant challenges in an area of low population density in a country that usually gives more attention to urban development.

More broadly, we can pay new attention to creating a decent system of laws and regulation.

At present, oil and gas fall under the Mineral and Petroleum Resources Development Act (MPRDA).

The law was drawn up long before anything was known about shale gas and contains no specific provisions relevant to the industry or its effects.

We know that amendments were rushed through Parliament at the end of the last session, but that President Jacob Zuma has announced that they were unconstitutional and need to be recrafted.

Newly appointed Mineral Resources Minister Ngoako Ramatlhodi proposed that oil and gas be removed from the ambit of the MPRDA and given their own new law.

However, there has been considerable backtracking on this proposal.

As fracking is unlikely to occur for some time, there is more time to reinstate the proposal and to allow for significant public participation in shaping a new, distinct oil and gas law that is tough on preventing negative social and environmental effects.

The amendments to the MPRDA abolished the oil and gas regulator, the Petroleum Agency SA (Pasa). Cancelling the amendments gives Pasa a lame-duck status at present.

What is likely to replace it is the delegation of the regulatory function to regional offices of the Department of Mineral Resources.

This move dilutes and decentralises regulation, meaning that considerable expertise on fracking would have to be created in a number of different offices, rather than in a single body such as Pasa.

In theory, this weakens the ability of the state to regulate and helps individual oil or gas companies to play off the various regions against one another, opening the way to a race to the bottom.

This regulatory strategy is questionable as it undermines the ability of the regulator to monitor and manage an industry that is particularly prone to environmental and social abuses.

In October 2013, the department published draft technical regulations to govern fracking.

These were compiled from US industry checklists and not from specific research on the effects that would probably have occurred in the Karoo.

The draft invited public comment, but the department has yet to respond to the many reasoned objections submitted to it.

Meanwhile, despite the legislative and regulatory uncertainties, no exploration rights have been granted by the state.

The minnows in the game are Falcon (a Dublin-based semi-Hungarian operation with no success in fracking and an understanding with Chevron) and Bundu (an Australian company, similarly with no successful fracking under its belt).

They are applying for exploration rights on the basis of conducting seismic tests rather than fracking, according to the documents they have submitted in fulfilment of their environmental impact assessments.

Many believe that if they succeed in gaining exploration rights, they are likely to sell these on to larger oil and gas companies.

There is also the debate by geologists about the likelihood of South African reserves of shale gas.

While desktop estimates are vast (the US Energy Information Administration says reserves are at 390-trillion cubic feet), local expert evidence given to Parliament says the real figure is likely to be about 40-trillion or 50-trillion cubic feet, which may be too little anyway to appease Shell’s appetite.

Shell itself has burnt its fingers in the fracking industry, having to write down (subtract from its books) $2.1bn, mostly in its fracking activities in the US itself.

The oil price slump resulted in recent management decisions to withdraw $15bn from Shell’s capital investment in 40 projects worldwide.

This accounts for the withdrawal for the time being of Shell’s ambitions in Karoo shale gas.

Although we will hear arguments attributing the move to impatience with SA’s legal and administrative dithering, the real reason for the withdrawal is Shell’s own global bottom line.

Shell is not the first to pull out of shale gas: Sasol, together with partners Statoil (Norway) and Chesapeake (US), decided not to take up its option to explore for shale gas in a large swathe of the country, including the Free State and KwaZulu-Natal.

It was Sasol that had first used the term that the industry would be a "game-changer" in SA.

The term has more recently been attributed to Zuma, who used it in his state of the nation address last year, an example of unthinking hype which he must now be regretting.

Shale gas is unlikely to rescue SA in the ways foreseen by Zuma and his entourage.

Instead, the "game" has fallen apart. Now it is time for us to have a national dialogue that favours moves away from fossil sources, recognises the goals of energy and climate justice, and creates redress for the residues of apartheid’s maldevelopment in our rural areas.

• Fig is a research associate at the Environmental Evaluation Unit at the University of Cape Town and at the Society, Work and Development Institute of the University of the Witwatersrand. He is a fellow of the Transnational Institute in Amsterdam.