Environmentalists are questioning why fracked gas could soon be sold before full production approvals are granted in the Northern Territory, months after a similar proposal from a gas company was dropped because it was unlawful.
Key points:
- Companies will soon be allowed to use or sell gas fracked during the exploration or appraisal phase
- The NT government says the change could power local communities and reduce emissions at the point of extraction
- But environmentalists have questioned the move, which was proposed by a gas company earlier this year
Energy giant Origin proposed using or selling gas extracted during the appraisal or exploration phase — where companies test the viability of gas reserves — in a licence application for the Beetaloo Basin earlier this year.
The proposal was later removed from the application because it was not allowed under the Petroleum Act, but the company flagged at the time that it may be authorised in future.
The territory government is now set to legislate the change, saying it would allow appraisal-phase gas to power local communities rather than being released or burned at the point of extraction.
“We pointed out in our response to [Origin’s] application that would not be legal under the Petroleum Act, and now we see the government proposing to amend the Petroleum Act in a way that would make that legal for future companies,” Hannah Ekin from the Arid Lands Environment Centre said.
“To me, that raises a lot of questions around how much the government’s legal reforms are being driven by gas industry priorities.”
The proposal was not mentioned in a landmark fracking inquiry that has acted as a guiding document for NT gas regulation since the government agreed to implement its 135 recommendation before production goes ahead.
The government did not directly respond to a question about whether the industry had requested the change.
Proposal welcomed by industry
The government said the Petroleum Act amendment would only be allowed once all the recommendations were met.
Environmentalists are concerned it goes against the spirit of the inquiry’s findings, saying it would allow gas companies to earn revenue before rigorous approvals for large-scale fracking production are granted.
“The Pepper inquiry or inquiry into fracking in the NT was very clear about the risks of what’s known as ‘exploration creep’ — when we start to see the risks of large-scale, industrial gas fracking not being given the full regulatory process of production,” Ms Ekin said.
“The other concern we have is the way it’s framed under the legislation, there’s no limit to how much gas or for how long they can sell under an appraisal licence.
“They might decide it is expedient for them not to apply for a production licence at all, but just to sell the gas while keeping their current licence, which was designed for exploring.”
The inquiry specifically raised concerns that a large number of exploration wells could be drilled before its recommendations were in place, and recommended the government consider the cumulative impact of granting exploration licences.
It also found emissions during the exploration phase can be significant and should be minimised.
Mining and Industry Minister Nicole Manison said the legislation would stop appraisal-phase gas being released by venting or flaring, thereby reducing emissions at the point of extraction.
The gas industry says similar approaches are in place in other jurisdictions, and peak body APPEA has welcomed the change.
“The measure offers a short-term solution for pre-development projects and ensures that the Northern Territory gets the maximum benefit from its natural resources,” chief executive Samantha McCulloch said.
Origin’s application — for up to 12 wells over a four-year period — was lodged before the company sold its stake in the Beetaloo Basin.
The legislation is expected to pass alongside other changes to the Petroleum Act, intended to meet several inquiry recommendations, in the coming fortnight.
Regulator used to meet weekly with industry
Meanwhile, internal government documents have revealed the government’s environmental watchdog used to meet regularly with the gas industry as it prepared for an increase in applications once production begins in 2023.
Earlier this year, the ABC used Freedom of Information laws to obtain documents related to a major energy deal being negotiated between the federal and Northern Territory governments as well as their emissions reduction commitments.
A newly released group of documents includes one briefing note, sent by a senior NT bureaucrat to the branch of the federal government overseeing the deal in February, outlining the steps the government is taking to improve efficiency.
The document says that while the government is still intending to implement the recommendations of the fracking inquiry — also known as the Pepper inquiry — some administrative and legal reforms could be made.
“The environmental regulator has undertaken two annual workshops with industry to identify key areas for increasing efficiency and reducing regulatory burden and has documented and shared its regulatory efficiency program with industry,” the document says.
“This is in addition to the ongoing conversation (including weekly meetings with industry) it maintains in undertaking its regulatory functions.”
It says the department would continue to engage with the industry to discuss proposed improvements and identify priority areas.
The department has denied those meetings informed its regulatory policy, with a spokesperson saying they were discontinued in the middle of the year, but were required to ensure gas companies understood expectations.
But Ms Ekin said it showed a “huge imbalance” in access to government.
“I work with traditional owners and pastoralists who are worried about the impacts of gas on their property, and they as stakeholders and us as environmental groups have nowhere near that level of access,” she said.
The department says it meets regularly with a broad range of stakeholders, including quarterly meetings with environmental groups.
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