Northern Territory Government Lifts Moratorium on Hydraulic Fracturing

19 April 2018 Christopher Johns, Research Manager, Northern Australia and Land Care Research Programme

Background

On 14 September 2016 the Chief Minister of the Northern Territory, the Hon Michael Gunner MLA, announced a moratorium on hydraulic fracturing (or ‘fracking’) of onshore unconventional shale natural gas reservoirs in the NT. The Chief Minister also announced that he would appoint an independent scientific panel to inquire into the environmental impacts and risks associated with hydraulic fracturing. The moratorium would stay in place until the Inquiry submitted its final report.

The Inquiry submitted its Final Report to the NT Government on 27 March 2018. The Inquiry Panel formed the opinion that, with the enactment and implementation of a robust and rigorously enforced range of safeguards, as recommended in the Report, the risks associated with fracking could be eliminated or reduced to an acceptable level and that the industry could be developed safely in the NT.

Based on the Report findings and recommendation, the NT Government announced on 17 April 2018 that fracking of onshore unconventional shale gas reservoirs may proceed under very strict conditions and in tightly prescribed areas of the Territory.

Comment

Fracking is set to resume in the NT. The Government decision was announced after careful consideration of the Final Report of the Scientific Inquiry into Hydraulic Fracturing of Onshore Unconventional Reservoirs in the Northern Territory. The Inquiry took 15 months to investigate the nature and extent of identified risks associated with the development of an onshore gas industry and made 135 recommendations focused on the mitigation or elimination of these risks. The NT Government also announced that it supported, or supported in-principle, all recommendations contain in the Report.

Protection of the natural environment is of utmost importance. The Final Report emphasises that a robust and trusted regulatory framework is the principal way by which Government can ensure any onshore unconventional shale gas industry can safely develop in a manner which protects the environment and meets community expectations. The next step will be the careful management and coordination of the Inquiry recommendations. An implementation team is to be established to plan and coordinate all recommended actions required in the Final Report.

While environmental concerns are at the forefront of the fracking debate, the economic and development potential of the industry could be immense. Under the large-scale development scenario presented to the Inquiry, by an independent economic consultancy, it was assessed that over a 25-year period, the industry could deliver an estimated additional $17.5 billion. There is also an additional requirement for labour resources over that period. The Government could collect an additional $3.72 billion in taxation revenue, which includes $1.79 billion in additional royalties, and the Commonwealth would collect an additional $1.75 billion in tax receipts.

For a detailed, edited summary of the Inquiry Final Report please refer to FDI Publications, The Scientific Inquiry into Hydraulic Fracturing in the Northern Territory – Part One: Methodology and Summary of Findings and The Scientific Inquiry into Hydraulic Fracturing in the Northern Territory – Part Two: Major Risks and Conclusion.

Any opinions or views expressed in this paper are those of the individual author, unless stated to be those of Future Directions International.

Published by Future Directions International Pty Ltd.
Suite 5, 202 Hampden Road, Nedlands WA 6009, Australia.