NT frack ban lift gives LNG option

A move by the Northern Territory government to allow fracking by next year will increase pressure on the McGowan government, after a series of scientific and political inquiries gave the drilling technique the tick of approval.

Despite its use in Australia for decades to hydraulically stimulate onshore oil and gas wells, fracking has met with major opposition from activist groups in recent years.

Much of the controversy has been for gas sourced in coal seams, which are generally close to the surface.

In the NT and in Western Australia, fracking is used in shale formations, which are generally significantly further underground.

The announcement by Chief Minister Michael Gunner followed a scientific inquiry in the territory that returned scores of recommendations, but ultimately gave hydraulic fracturing the green light.

“We have accepted the key finding of the report, that if all the recommendations are implemented the risk from fracking can be reduced to an acceptable level,” Mr Gunner said.

“We have also accepted the inquiry’s advice about no-go zones and coupled with areas where there is no petroleum potential, 49 per cent of the territory will be frack free, including in national parks, conservation areas, indigenous protected areas, towns, residential and strategic assets, and areas of high cultural, environmental or tourism value.

“In the remainder of the territory, strict new laws and regulations will be put in place to ensure that when fracking takes place, we protect the environment, the cultures and lifestyles that rely on it, and the many tourism, pastoral and agricultural jobs that depend on it.”

A report by the NSW chief scientist, a WA parliamentary inquiry and a major study by the US Environmental Protection Agency are among those works that have given fracking the nod previously.

After its election last year, the McGowan government imposed a moratorium on fracking while a further scientific inquiry is undertaken.

Business News reported in July last year that at least one business involved in the onshore gas sector had a multi-million dollar financing deal fall over due to the increased risk associated with onshore drilling in the fallout from the moratorium.

Reaction

Santos managing director Kevin Gallagher said the NT’s move would generate jobs and social investments by gas companies, with an opportunity for LNG exports opening up in the early to mid 2020s.

“Territory businesses, contractors and workers are counting on the quick ramp up of the onshore gas industry to get the Territory moving again," he said.

“As soon we can get back to work, we will employ local people, engage local companies and resume royalty payments to host traditional owners.

“Santos does not want to let them down and we will be ready to go in the 2019 dry season.”

Association of Petroleum Producers and Explorers Australia chief executive Malcolm Roberts said states opposed to onshore gas development should be reconsidering their positions.

“As we look to Friday’s COAG Energy Council meeting, the NT government has sent an important message to other jurisdictions about the energy security, emissions reduction and economic benefits of natural gas,” Mr Roberts said.

“It is time for those other jurisdictions to hear that message.”