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Traditional owners and green groups in the Northern Territory say a new law is allowing companies exploring for gas to start selling it before they have gone through the approval processes needed for full production is putting the community at risk.
Key points:
- Laws passed last year allow companies to sell exploratory gas from the NT
- Opponents claim allowing the gas to be sold is propping up "marginal projects"
- Industry says selling exploratory gas will boost the NT's dwindling supply
When the laws were introduced to the NT parliament in October last year, the government said its intention was to allow appraisal-phase gas to power local communities rather than being released or burned at the point of extraction.
The government is hoping the territory is on the cusp of starting a major new shale gas fracking industry in the remote Beetaloo and McArthur Basins.
In May this year the government greenlit fracking in the territory — five years after a moratorium was lifted.
At the time, it said it had implemented all 135 recommendations of the Pepper fracking inquiry, though key recommendations — including how to offset all life-cycle greenhouse emissions in Australia — have not yet been completed, according to the NT's fracking regulator.
NT Environment Centre director Kirsty Howey said allowing the sale of exploratory gas before the recommendations were fully completed appeared to weaken the government's commitment.
"We'd been promised by the Northern Territory government that the industry would not move to production until numerous safeguards were in place," she said.
"That includes things like offsetting all life cycle emissions produced in Australia from fracking and declaring water allocation plans in the regions to be affected."
Ms Howey said this "just hasn't happened" and said what was happening was "production by stealth".
"It's an attempt to prop up what are essentially marginal projects," she said.
"It can mean that if something does go wrong, if a gas company leaves a site early, that we're often left as taxpayers cleaning up the mess."
That has happened in the NT in the past, with iron mines allowed to start selling test bulk ore shipments before getting final NT government approvals for their operations.
Concerns over impact on traditional lands
The new laws could also undermine traditional owner rights, Ms Howie said.
"What traditional owners should be getting is the right to negotiate new production agreements," she said.
Jingili traditional owner Samuel Sandy has exploration wells, which he opposes, on his traditional land on Tanumbirini Station.
He said he is worried the laws will encourage the gas industry's expansion.
"The Beetaloo Basin has a big underground aquifer, that's why I'm concerned about the water and also the environment — we're trying to maintain the environment as it is," he said.
These are not the first so-called "beneficial use of gas" laws in Australia.
New South Wales passed legislation in 2015 to allow Santos to supply gas from its Narrabri exploration project to the Wilga Park Power Station.
NT Chief Minister Natasha Fyles has rejected concerns by saying lots of environmental studies have already been carried out in preparation for the new industry.
"We have the baseline studies, we have the information that ensures that we protect our social, our community and the environment, whilst at the same time providing the opportunity for jobs into the future," the chief minister said.
Sales to help supply, industry says
So far Santos, Tamboran Resources and Empire Energy have built about a dozen Beetaloo test wells.
The industry argues being able to sell gas early will provide benefits, including helping to supplement the NT's dwindling domestic gas supply sooner.
But the Australian Petroleum Production and Exploration Association (APPEA) said the key benefit is that gas from test wells will be used instead of being wasted.
When companies check how much gas will flow out of a test well, they usually have to leave it burning for months. This is called venting.
"Explorers can now utilise that gas, capture it, instead of venting it or flaring it," APPEA's NT director David Slama said.
"It means that we're saving on emissions, both methane and carbon emissions, into the environment."
He said the accusation the measure could prop up marginal projects isn't realistic.
"It's not to recover cost or to drive extra dollars into an economic model to make it work, this is all about the environment and efficiencies," he said.
Mr Slama said gas companies also have to prove to the NT government they have consulted traditional owners and native title holders before being allowed to sell gas from test wells.
Empire Energy's chief executive Alex Underwood said the new laws will help his company invest more money into its projects and reduce its emissions.
"Generating revenue during the appraisal process will generate economic activity in regional NT and provide royalties for traditional owners and the NT government," he said.
"Empire intends to re-invest appraisal gas revenues into the project, furthering enhancing local economic benefits."