Hydraulic fracking is a drilling process by which gas trapped within rocks is accessed by using high-powered water and chemicals to crack open the rocks and allow the gas to flow into a well and up to the surface. It is a highly controversial process as there have been incidents of dangerous gas leaks as well as concerns that the chemicals used could potentially enter and pollute underground water sources.
“This government will soon be seeking comment on draft climate change and environmental offset policies, which we want to finalise before the end of 2018.”
The NT becomes the third state or territory to approve fracking in Australia, after Queensland and South Australia, with moratoriums currently in place in Victoria, Tasmania and Western Australia. NSW rejects claims it has a moratorium, although it has no projects underway.
Half of the Territory is almost the same size as the state of NSW.
The NT's move will be a boon for gas companies such as Santos and Origin, which have major holdings in the Territory’s Betaloo Basin. More than half of the Territory’s prospective shale gas is located in the Betaloo Basin, with the region holding more potential shale gas than the entire Bowen Basin, which has driven Australia’s LNG boom.
Prior to the moratorium, Origin had identified 61 trillion cubic feet of gas at its Betaloo project.
“We now plan to resume work as soon as practical, adopting the recommendations of the scientific inquiry and gaining the necessary approvals to complete our remaining exploration and appraisal commitments,” Origin executive general manager Integrated Gas, Mark Schubert said.
Origin’s share price rose 1.63 per cent to $9.39 in early morning trading following the announcement, while Santos was up 0.6 per cent at $5.96.
Construction of the massive Northern Gas Pipeline connecting Tennant Creek in the Territory with Mt Isa in Queensland is underway and will deliver around 90 terajoules of gas to the east coast. Pipeline builder Jemena believes this can be expanded to 700 terajoules – enough to meet the daily gas demands of Brisbane, Sydney and Adelaide alone – once gas begins to flow.
“Should development of the Beetaloo Basin proceed in the short term, we are seeking to invest significantly more capital to extend and expand the Northern Gas Pipeline. This could create around 4000 new jobs during the project’s construction phase,” Jemena managing director Paul Adams said.
“Early estimates place the cost to extend and expand the Northern Gas Pipeline at around $3 billion to $4 billion. This investment would be in addition to Jemena’s current project.”
Environmental groups have argued that opening up the NT to fracking will lead to far greater greenhouse gas emissions for both the Territory and the nation overall.
According to a submission by The Australia Institute to the NT fracking inquiry, shale oil and gas development could result in total emissions equivalent to 60 times the current national annual emissions. The "carbon bomb" from the new industry could dwarf other contentious projects, such as the plans to open up the Galilee Basin in Queensland for a new coal province.
The group questioned the findings of the Territory's interim scientific inquiry, which played down the impact of much higher emissions.
"Despite this huge pollution potential and despite the now scientifically acknowledged fact that people are already dying from climate change, the Northern Territory's scientific inquiry rated the consequences of this shale-fracking carbon bomb on our global climate not as 'catastrophic' or 'severe' but rather merely being of a 'low' consequence," the report by Tim Forcey, a former BHP engineer, said.