5.1
This chapter examines issues raised in relation to environmental and global heating impacts of shale gas development in the Beetaloo, with a particular focus on water and greenhouse gas emissions. Specifically, it considers information received by the committee relating to:
the Pepper Inquiry's findings on potential environmental risks of the fracturing and use of onshore shale gas, and ways of mitigating these risks, including through robust regulation, baseline assessments and offsets;
risks to surface and groundwater resources, including potential effects on ecological communities and stygofauna, as well as on human health and agriculture; and
significant levels of greenhouse gas emissions from the development of shale gas resources in the Northern Territory (NT), as well as the lack of an effective regulatory oversight of the industry.
Findings and key recommendations of the Pepper Inquiry
5.2
As noted in Chapter 1, the Pepper Inquiry reported in 2018 on a number of key environmental risks related to the possible development of an onshore shale gas industry in the NT. Two of these risks are discussed in this chapter—water‑related risks and the lifecycle of greenhouse gas emissions—following a brief examination of the current status of the Pepper Inquiry recommendations.
The recommendations
5.3
As discussed in Chapters 2 to 4, there is significant opposition to hydraulic fracturing in the NT, leading the Pepper Inquiry Panel to comment:
For a significant majority of the people participating in the Inquiry, the overwhelming consensus was that hydraulic fracturing for onshore shale gas in the NT is not safe, is not trusted and is not wanted.
5.4
In order to address these concerns, the Pepper Inquiry made 135 recommendations, which it considered, if all were enacted in full, would enable the safe and effective management of any onshore shale gas industry (see Chapter 1).
5.5
Arguably, the most significant of these recommendations is the requirement to offset all additional emissions that any gas extraction would create. Given the large scale of gas resources within the Beetaloo, these offset requirements are both financially and logistically very significant. Further, there has been no clear allocation of costs for offsetting these future emissions between the Australian and NT Governments, or the gas companies themselves.
5.6
Some stakeholders noted that these recommendations were developed independent of the NT Government and industry, and are designed to mitigate risks through effective regulation. The Australian Petroleum Production and Exploration Association (APPEA) submitted, for example:
The Northern Territory government accepted all 135 recommendations as handed down from the scientific inquiry panel. The Panel concluded that, should the government implement those recommendations, the proposed risks of hydraulic fracturing in the NT would be 'mitigated or reduced–and in some cases eliminated altogether–to acceptable levels'. The Honourable Justice Rachel Pepper also remarked that: 'There can be no doubt that this Inquiry has, at all times, conducted itself independent of Government and independent of any industry'.
5.7
Importantly, the Pepper Inquiry did not make any recommendations about whether the NT Government should or should not lift its 2016 moratorium on hydraulic fracturing in the NT. Instead, the purpose of the inquiry was specifically:
…to identify and assess, based on the most current and best-available relevant scientific evidence, the environmental, social, cultural and economic risks associated with hydraulic fracturing for onshore shale gas in the NT, and to make recommendations to mitigate those risks, where possible, to acceptable levels. In circumstances where insufficient data exists to undertake this task, the Inquiry has not hesitated in recommending that the necessary additional information be obtained prior to the development of any onshore shale gas industry in the NT.
5.8
The NT Government supported the Pepper Inquiry's recommendations, and submitted to this inquiry that all recommendations related to 'exploration activities for drilling of petroleum well and hydraulic fracturing' were completed in May 2019'.
5.9
At the time of writing, 64 recommendations (46 per cent of the total) have been completed, implementation of 73 of the recommendations has commenced and the implementation of one recommendation has not yet commenced.
5.10
The committee notes that the NT Government appointed Dr David Richie as an Independent Officer to oversee the implementation of the recommendations, which are spread across several ministerial portfolios and government departments. The committee also notes the many submissions which contended that Dr Ritchie's progress reports appear to favour oil and gas interests.
Concerns regarding implementation
5.11
The committee received information from a number of submitters and witnesses, who expressed concern about the implementation of the Pepper Inquiry recommendations.
5.12
Dr Kirsty Howey from the Environment Centre NT, for example, noted that 'fewer than 50 per cent of the Pepper inquiry's recommendations have been implemented… If they cannot be implemented, then the industry should not proceed'.
5.13
Dr Howey explained that, in addition to the proper regulation of the onshore shale gas industry, full implementation of the Pepper Inquiry recommendations is critical to the industry's social licence to operate and governments' social licence to regulate:
This was very much presented by the Pepper inquiry and by the Northern Territory Labor government as a package, a holistic package. If it is not possible to opt to implement one of those 135 recommendations then the compact with Northern Territory people is that the industry shouldn't proceed.
5.14
The Australia Institute highlighted that the manner in which the recommendations are interpreted and implemented is also important. However, it argued:
…the recommendations of the Pepper Inquiry are not being implemented, at least not in the way they were intended… Without these recommendations fully implemented unconventional gas cannot proceed safely in the NT.
5.15
Similarly, the Protect Country Alliance submitted that the recommendations of the Pepper Inquiry have been subject to 'distortion and watering down' by the NT Government and industry, and contended that there is currently no satisfactory review process.
5.16
The Environment Centre NT provided an outline of the Pepper Inquiry recommendations that apply to the Commonwealth, noting that it considered both of these recommendations unimplemented:
Recommendation 7.3—That the Australian Government amends the [Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act)] to apply the 'water trigger' to onshore shale gas development…[and]
Recommendation 9.8—That the NT and Australian governments seek to ensure that there is no net increase in the life cycle [greenhouse gas] emissions emitted in Australia from any onshore shale gas produced in the NT.
5.17
Regarding Recommendation 7.3, a representative from the Department of Agriculture, Water and the Environment (DAWE) told the committee:
…the EPBC Act is currently under review at the moment. The officers who are responsible for that matter aren't available today and aren't with us. In a general sense, the outcome of the Samuel review indicated that the government' first port of call in terms of reviewing the EPBC Act was to keep [Matters of National Environmental Significance] as protected matters under the act the same. At this stage the water trigger is not the subject of that review.
5.18
On Recommendation 9.8, the Department of Industry, Science, Energy and Resources (DISER) told the committee that an agreement was currently being negotiated:
The draft agreement text is still under negotiation with the Northern Territory Government [which] is going to be a high level document focusing on areas of mutual interest. So, in the broad, it will cover energy and emissions reduction.
5.19
The implications of these two recommendations are discussed further below.
Strategic Regional Environmental and Baseline Assessments (SREBAs)
5.20
A central recommendation of the Pepper Inquiry was for any development of the NT's onshore shale gas industry to be informed by robust Strategic Regional Environmental and Baseline Assessments (SREBAs) to:
inform an understanding of the territory's unique environmental values;
adequately assess the risk profile of any onshore shale gas industry;
facilitate strategic environmental (water and air) and land-use planning; and
fully inform issues associated with social impacts, human health, and First Nations people and their culture.
5.21
The Pepper Inquiry particularly noted the importance of SREBAs in understanding biophysical (water, land and air) risks, commenting:
The lack of adequate pre-development assessment and environmental baseline data is routinely cited as one of the biggest issues associated with the rapid development of the shale gas industry in the US and the [coal seam gas] industry in Queensland.
5.22
The Pepper Inquiry made two key recommendations concerning SREBAs: first, that a SREBA be undertaken prior to the granting of any further production approvals; second, that undertaking a SREBA for the Beetaloo should be prioritised.
Concerns raised
5.23
The committee received information raising concerns about the development and implementation of SREBAs. The Arid Lands Environment Centre argued, for example:
Despite the Pepper Inquiry providing a pathway for fracking to occur in the Northern Territory, the viability of the industry from a regulatory standpoint remains unknown. The baseline assessments…are yet to be completed. Very little research has been conducted in the region to date. These ecological, social, cultural and economic baseline assessments will be critical components that will inform whether the industry is viable.
5.24
The Protect Country Alliance highlighted that, even if baseline assessments were completed, it is critical that the SREBAs are finalised before onshore shale gas activities can proceed:
Government and industry have consistently claimed that the Pepper inquiry gave them a green light to proceed with fracking after measuring some baselines. This is a deliberate and dangerous distortion and was prevalent in the NT elections in 2020 and their expectation is that they will be able to proceed in 2022. The SREBA research has not been done, some key elements have barely started. And the stakes are high.
5.25
Dr Howey pointed out that 40.5 per cent of the recommendations depend on robust baseline studies, and she too noted that shale gas development activities have already commenced even though the SREBAs have not been conducted as recommended by the Pepper Inquiry:
We don't think these studies can accurately be described as predevelopment baseline studies given that exploration, including the drilling of a number of wells, has been continuing unabated. The Pepper inquiry outlined that the baseline study data acquisition, interpretation and reporting stages be conducted over a three-to five-year period. However, due to significant delays, studies have only recently commenced, and will be completed within an 18-month period only. Also, as per recommendation 9.4 of the Pepper inquiry, the SREBA should be funded by the gas industry; however, we now understand that Territory taxpayers are funding the SREBA—that's the baseline study—on a promise to be reimbursed at a later date if the industry ever reaches production.
Surface and groundwater management
5.26
This report has already discussed concerns raised by Traditional Owners about the potential risks of fracking to the Beetaloo's surface and groundwater systems, which sustain local communities not only as sources of drinking water, but also spiritually and culturally (see Chapter 4). These were summed up by Ms Nancy McDinny, a Traditional Owner from Borroloola, who told the committee:
Fracking is not good for our country, not good for our water… Our water was here from ancestors. Thousands and thousands of years ago people were living with this water, living on clean country… We've got to protect it and protect the water.
5.27
The Pepper Inquiry highlighted that the sustainable management of surface and groundwater resources will be crucial to the development of any onshore shale gas industry in the NT. That inquiry identified three water-related environmental values—water quantity; water quality; and aquatic ecosystems—and after assessing 20 water-related risks, found three high‑priority issues, summarised in Table 5.1 below.
Table 5.1: Water-related high priority risks, NT
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Unsustainable groundwater use
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There is insufficient information to permit a full assessment of the risks to groundwater resources from any shale gas industry established in the Beetaloo.
There is a 'low' risk of a local drawdown of groundwater greater than 1 metre at distances beyond 1 kilometre from a gas company bore field.
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Contamination of groundwater (hydraulic fracturing fluids and wastewater)
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There is a 'very low' risk of the upward migration from the shale formation of hydraulic fracturing fluids and chemicals leached from the shale causing contamination of a surface aquifer.
There is a 'low' to 'medium' risk of upward migration of methane.
There is a 'low' risk of spills travelling through the 30–100 metres of soil and rock to the aquifer in the Beetaloo, based on predictive modelling.
Risk of hydraulic fracturing chemicals and fluid additive spill during transportation to site.
There is a 'low' risk of wastewater spilling during transportation by pipeline for reuse or to a treatment plant.
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Effect of water quantity and quality risks (surface water and/or groundwater dependent ecosystems)
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There is a major lack of detailed knowledge of the aquatic ecology and biodiversity of surface and groundwater systems, particularly in the semi-arid and arid regions of the NT. Improving this knowledge base should be a focus of any SREBA.
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Concerns raised
5.28
Submitters and witnesses to the Senate inquiry expressed heightened concerns regarding the potential for water-related environmental risks from hydraulic fracturing in the Beetaloo. The Australia Institute cautioned that the onshore shale gas industry, and the BCD Program which would facilitate and accelerate it, must be seen in the following context:
Unconventional gas extraction, or fracking, is deeply unpopular in the Territory, with a key reason being the risks the process presents to groundwater resources, along with climate impacts. Territorians are much more aware of their groundwater than most Australians as most people in the NT, particularly south of Darwin, rely on groundwater for drinking, bathing, fishing and other recreation for at least part of the year.
5.29
Mr Graeme Sawyer reminded the committee of the importance of clean groundwater for a broad range of communities, and the need to understand the effects of fracking before development commences:
In the Beetaloo Basin, this ground water is the only water source for the Indigenous communities, the pastoralists and the townships that live through the area. They draw their water for drinking and everything else out of this system, and the chemicals and processes that the fracking companies are using are already dumping stuff in there and are guaranteed to dump a lot more in the future.
5.30
GetUp's submission included a large number of contributions from its members highlighting the risks to the NT's water that could come from fracking development, which it said were acknowledged by proponents:
Origin Energy's own environmental report for 10,000 square kilometres on the Beetaloo Basin warned that drilling 'would pose a risk of causing aquifers under some properties to leak into each other', deteriorating the quality of existing and future groundwater supplies. The current program at Beetaloo will be an enormous threat to 90% of the Northern Territory's groundwater systems. The ecosystem in the outback is fragile and precious. Drilling will have unknown consequences for Traditional Owners, for flora, fauna and farmers.
5.31
Protect Country Alliance's submission drew out further concerns regarding how new information about potential risks to groundwater is being handled:
Knowledge of threats to water has dramatically increased with the publishing of preliminary research in 2021. This includes threats to drinking water to stock and agriculture and to culturally significant water systems and sacred sites. None of the more recent Environmental management plans (EMPs) have been updated to reflect this new knowledge despite the clear warning in the Pepper Inquiry.
In the last few months, pastoralists, Traditional Owners and the community have all responded with renewed concerns based on this groundwater and Stygofauna research. The Federal fracking subsidies are causing the process and the science to be pushed aside as the industry desperately tries to cash in on an ever reducing window of opportunity.
5.32
Geoscience Australia told the committee that studies undertaken in partnership with the Commonwealth Scientific and Industrial Research Organisation (CSIRO) indicate that the potential effects of fracking can be managed through existing and reformed regulation:
In partnership with the CSIRO, we have studied extensively over the last four years under the Geological and Bioregional Assessment Program, looking at the potential of impacts on the groundwater systems from unconventional [gas] industry in the Beetaloo. We have already completed the first two stages of that work, and that is all publicly available now. The third stage is due for publication very shortly, but the preliminary results are already demonstrating that, given all the ways of causing impact that have been considered, our best scientific opinion is that there is a very low probability of any impact to the groundwater system and that, in fact, all processes can be appropriately mitigated using current regulatory frameworks that exist, particularly if the recommendations of the reviews that have taken place in the Northern Territory are followed.
Stygofauna
5.33
In 2021 the CSIRO reported finding a new and diverse range of tiny aquatic animals known as stygofauna deep in the underground aquifers of the NT:
The Beetaloo animals are different from stygofauna recorded from more extensively studied Western Australian aquifers, with new genera and species of crustaceans likely to be present in the Beetaloo. Results confirm Northern Territory aquifers support a diverse range of stygofaunal species. All Beetaloo stygofaunal communities sampled were dominated by crustaceans—shrimps, amphipods, ostracods, copepods and syncarids. CSIRO scientist Dr Gavin Rees said the presence of the same stygofaunal species at widely separated sites across the Cambrian Limestone Aquifer could indicate high connectivity within the aquifer which would need to be considered in light of shale gas development proposals.
5.34
The committee received information suggesting that new species of stygofauna have been found in the Beetaloo, and that the Pepper Inquiry recommendations would not necessarily protect these creatures, which are not yet understood sufficiently:
The [CSIRO] study confirmed the presence of Stygofauna in the basin, something the Pepper inquiry suspected and requested the scientific study to confirm. Eleven species new to science and a large (for stygofauna) shrimp predatory species indicating a complex ecosystem.
The research also showed through its DNA analysis that the connectivity in the basin is significant as the less than 4% variability in DNA between specimens from approx. 400 km apart shows the species freely intermixing across the basin. The Pepper inquiry said specifically they thought stygofauna might be present and that if they were present the inquiry's 135 recommendations could not be relied upon to protect stygofauna and groundwater.
5.35
Mr Sawyer explained that stygofauna are crucial to healthy underground water systems, and that any degradation would have effects on entire ecosystems, including for humans that depend on those systems for clean drinking water:
…stygofauna have a major ecosystem in those underground water systems. A lot of them are new to science. There are 11 species so far, and this is just preliminary data. The evidence is that these animals are what keep that water potable. The fact that this is fresh drinking water, in great nick and able to support the human communities across that space as well as the cattle industry et cetera, is probably in large part due to these stygofauna. They are also known to be incredibly sensitive organisms, because they live in such a controlled environment.
5.36
Mr Sawyer suggested CSIRO's stygofauna research is currently being ignored in proponents' environmental assessment documentation:
Neither the Imperial [a subsidiary of Empire Energy Group Ltd (Empire Energy)] EMP nor the Santos EMP, both of which have been published for comment in the last few months, mentions the word 'stygofauna' in their documents. We've also seen data from the Tanumbirini 1 well completion report indicating that 21 million litres of drilling mud was lost into the underground systems—these are the water systems where these stygofauna live—during the drilling of that well, possibly containing biocides and a whole range of other materials that are likely to disrupt the balance.
Other environmental impacts
Ecological communities and species
5.37
The Pepper Report noted that land clearing would take place for gas extraction development, and that this would cause direct habitat loss and fragmentation. It suggested a number of ways that this loss could be mitigated, including through limiting the 'surface footprint' of land clearing through efficient design of infrastructure such as roads, monitoring of threatened species at risk and implementing management plans where necessary, and effectively rehabilitating land once development is completed.
5.38
The committee received some information on the probable effects of fracking in the Beetaloo on threatened ecological communities and the threatened species of flora and fauna they support. For example, the Environment Centre NT and Dr Timothy Neale submitted that the exploration activities proposed 'clearly meet the threshold of having the potential to have a significant impact on the [NT's environment]', including through:
fragmentation of the habitat of native animals and native vegetation, a key threatening process for threatened species and ecological communities;
a rise in greenhouse gas emissions;
potential for damage to cultural heritage and sacred sites;
potential for contamination to groundwater;
potential for contamination of surface water;
multiple sites for contamination to soils; and
damage to threatened species and ecological communities.
5.39
These risks were drawn out by the Environmental Defenders Office:
The Beetaloo sub-basin has several conservation areas in and around the basin that host fragile flora and fauna [which] have not been extensively studied for flora and fauna, but there are reports of 14 threatened species in the greater Beetaloo sub-basin region, including the grey falcon and floodplain monitor. With more assessment, these numbers may increase…
The infrastructure requirements of gas developments would create habitat loss, edge effects and habitat fragmentation for flora and fauna. Through the development of infrastructure such as roads, pipelines, drilling pads and wells, habitats of many flora and fauna may become disconnected and impact on their behaviour, which may lead to a lower chance of survival. As transportation into these remote regions within the Beetaloo sub-basin increases, so too does the risks of introducing weed infestations, which would be devastating for local flora, who already compete for very limited water resources.
5.40
These issues will be considered in greater depth in the committee's final report due in March 2022.
Pastoral interests
5.41
Protect Country Alliance submitted that pastoralists do not want fracking on their leaseholds, fearing that it presents a real and present threat to their ongoing business operations at multiple levels:
[The] issues are many but include the inability to get insurance as well as the risks to water, chemical pollution of water and land and operations.
5.42
Mr Sawyer explained that chemical pollution threatens the cattle industry, as there are concerns that such pollution could cause sterility, increase salinity in potable water, and contaminate cattle intended for consumption.
5.43
The committee notes that some submitters have expressed concerns about how petroleum exploration activities in the Beetaloo, and the NT more generally, could impact human and animal health. The committee acknowledges these concerns, which it may examine as the inquiry progresses.
Hydraulic fracturing and the 'water trigger'
5.44
A number of stakeholders raised concerns about the 'water trigger' in the EPBC Act not covering shale gas extraction. As discussed above, the Pepper Inquiry specifically recommended that the Australian Government amend the EPBC Act to extend the 'water trigger' to onshore shale gas developments. Despite recent amendments to that Act, this has not been undertaken.
5.45
Evidence to the committee explained why a water trigger was necessary, both for human and ecosystem health. For example, the Arid Lands Environment Centre submitted:
The 'water trigger' must be expanded to include shale gas activities. The risk posed by shale gas activities is as great if not greater than the risks posed by coal seam gas and large coal mining developments. Shale gas uses large quantities of water, in addition to posing a risk to groundwater through contamination.
5.46
The Environment Centre NT and Dr Neale noted that most of the NT's drinking water is drawn from aquifers, and that 'any impact on potable water' from contamination or reducing quantity from extraction and drawdown was 'universally seen as unacceptable' during the consultations conducted for the Pepper Inquiry. Dr Howey expanded on this point, explaining:
To safeguard our water, we absolutely [sic] the federal approval and federal expertise that comes with the water trigger to adequately assess, using appropriate temporal and spatial scales, exactly what the impacts of this industry are going to be on our water resources. As mentioned previously by the Australia Institute, this was the No. 1 issue.
Climate change was a very significant issue related to fracking, but it was water and the rallying point around water being life that really galvanised Territorians in relation to the inquiry. It's completely unacceptable that we still don't have that amendment to the EPBC Act.
5.47
The committee notes advice DAWE that the water trigger applies only to coal seam gas and coalmining projects and, although the EPBC Act is currently under review, 'there are no changes proposed to expand the scope of the water trigger at this time'.
Energy production and potential greenhouse gas emissions
5.48
The Pepper Inquiry noted that the extraction and subsequent use (the 'lifecycle') of shale gas results in the emission of greenhouse gases (GHGs), including methane and carbon dioxide (CO2). The Pepper Inquiry Panel found that stakeholders were very concerned about the potential environmental impacts of climate change, which would be exacerbated by Australia increasing its GHG emissions through any onshore shale gas industry.
5.49
The Pepper Inquiry assessed the quantity of lifecycle GHG emissions for any new onshore shale gas field in the NT. Its estimate was based on yearly production of either 365 PJ or 1240 PJ, a range evidenced in global shale gas operations and use. The Panel estimated:
GHG emissions from any new onshore shale gasfield in the NT producing 365 PJ/y would contribute around 4.5% of Australian GHG emissions and around 0.05% of global GHG emissions;
for a gas field producing 1,240 PJ/y (with LNG exports of 80% and domestic consumption of 20%), the Australian component of emissions is around 6.6% of Australian GHG emissions and 0.07% of global GHG emissions. The total emissions (emitted in both Australia and overseas) is approximately 0.17% of global GHG emissions; and
the assessed risk associated with life cycle GHG emissions is 'medium' for a gasfield producing 365 PJ/y; 'medium' for the Australian emission component associated with a gasfield producing 1,240 PJ/y; and 'high' for the global emissions (both in Australia and overseas) associated with a gasfield producing 1,240 PJ/y.
5.50
The committee notes that, in addition to the shale gas activities in the Beetaloo, there are several major offshore and onshore gas projects which are under development, with capacity to produce significant GHG emissions that are not compatible with limiting global warming to 1.5 or even 2 degrees Celsius, let alone net zero by 2050.
5.51
These massive gas projects include Woodside Energy Ltd's offshore Western Australia Scarborough gas project, Santos Offshore Pty Ltd's offshore NT Barossa gas project and onshore New South Wales Narrabri gas project. Any one of these projects will jeopardise the goal of stabilising the earth's climate by 2050.
5.52
The Beetaloo is however bigger than any of these projects. Emeritus Professor Ian Lowe submitted that assuming the resource is as big as the Marcellus Shale deposit in the US, to which gas companies have compared the Beetaloo resource, then the:
…scale of production [from the Beetaloo] would contribute about 600 million tonnes of carbon dioxide equivalent per year. To put that figure in context, Australia’s total emissions for the most recent year—the highest ever recorded—were 560 million tonnes. So just extracting and burning gas at the rate projected, without taking into account the extra contribution from fugitive emissions, would do more to accelerate climate change than Australia’s entire current activity.
5.53
In contrast, Empire Energy submitted that its project in the Beetaloo is anticipated to have low Scope 1 carbon dioxide levels:
Field tests indicate that our gas contains extremely low levels of CO₂ (<1%) compared to other gas basins around the world which is likely to reduce the carbon intensity of future development on our assets compared to other gas developments.
5.54
The committee notes that once fugitive methane emissions are taken into account the overall Scope 1 GHG emissions (CO₂-e) are likely to be much higher. On this point, the Institute for Energy Economics and Financial Analysis has estimated that, in the period 2014–2019, the emissions intensity of Australia's gas production increased by around 30 per cent due to newer projects releasing higher rates of GHGs: 'the average amount of GHG associated with gas production increased from 0.54 tonnes of CO₂-e per tonne of LNG produced to 0.7 tonnes of CO₂-e per tonne of LNG produced'.
5.55
Bearing in mind that most, if not all shale gas from the Beetaloo might end up in the export market, Protect Country Alliance argued that Scope 3 emissions (those generated overseas) have not been included in the GHG estimates:
Current emissions figures for Beetaloo and other Territory based gas projects do not currently include the so-called scope 3 emissions, those created when the gas is burned overseas. I remember people talking about how silly Australia was to be exporting raw materials and importing finished products and effectively missing out on the wealth creation and jobs delivered through the processing of the raw materials and the manufacturing of the finished products. In relation to fossil fuels we see almost no benefit from the industry in relation to the export of the raw materials yet we "import" the consequences in the form of global heating and the fires and droughts and other disruptions that flow from this.
Estimated increase in greenhouse gas emissions
5.56
Submitters and witnesses expressed concern that the development of a shale gas industry in the Beetaloo will significantly increase GHG emissions, thereby contributing to climate destabilisation and the adverse impacts associated with global warming for which the gas companies will not have to pay. These stakeholders noted that these outcomes would affect not just the NT and Australia, but also the planet.
5.57
Regarding the potentially catastrophic long-term effects of global heating, the Environment Centre NT and Dr Neale noted:
Climate change is projected to have significant impacts in the NT as early as 2030, and extreme impacts by 2070, including more severe cyclones, increased droughts, changed fire regimes, more erratic rainfall and extreme temperatures. By 2090, the NT's capital, Darwin, will likely experience more than 300 days per year of temperatures over 35 degrees Celsius, creating an extreme heat stress hazard. The NT's experience of climate change impacts is already startling. Its three principal ecosystems, the savannas and coastal mangroves of the tropics in the 'Top End', and the arid zone interior of Central Australia, have been classified by some scientists as 'collapsing'. Climate change will exacerbate existing entrenched inequalities in housing, health, infrastructure and employment, with impacts felt disproportionately by Indigenous people and lands in northern Australia. The NT's own Environment Minister, Eva Lawler, acknowledged recently that the territory may become uninhabitable for humans if global emissions continue on current trajectories.
5.58
The global implications of the release GHGs from the development of NT gas reserves were outlined by the Protect Country Alliance:
One of our major concerns is the climate and the implications for future generations of opening this fossil fuel basin. The area of the McArthur River basin known as the Beetaloo sub basin has a significant amount of gases that will greatly increase global heating emissions… The carbon dioxide and methane emissions from this area will be extraordinary and the combined figure of the direct emissions, the leakage of fugitive emissions, and the emissions from processing and transporting the gas are very significant and will mean Australia will not meet the climate targets it has set, as weak as those are from the federal government.
5.59
The Australian Youth Climate Coalition argued that there is a need to act without further delay:
Gas is a fossil fuel that is driving the climate crisis. Gas production creates greenhouse gas emissions at every stage of production. Its primary emission, methane, is 84 times more potent than one tonne of carbon dioxide. We still have time to address the climate crisis and stop the worst impacts, but that window is closing quickly. It's imperative that we act fast. Fundamentally, that means transitioning to net-zero emissions and 100 percent renewable energy—not expanding fossil fuel energy production.
5.60
Echoing recent research by the International Energy Agency (IEA), the Climate Council has warned that 'there can be no new coal, oil or gas projects if the global energy sector is to reach net zero emissions by 2050 and help avoid catastrophic climate change'. Dr Simon Bradshaw, Head of Research from the Climate Council, added:
The fact that even the traditionally conservative IEA is calling for an immediate end to fossil fuel expansion is yet another nail in the coffin for fossil fuels, the biggest drivers of dangerous climate change… IEA's report adds to a growing body of evidence that Australia's gas-fired recovery is unnecessary and dangerous, as many energy, economic and scientific experts have repeatedly said… Projects under consideration right now, like the Narrabri and Scarborough gas projects, cannot go ahead. Instead of spending public money on gas, which will increase electricity prices and worsen climate change, Australia can and should be working towards net zero emissions by 2035, and capitalising on the benefits of leading the global transition to renewables.
Offsetting lifecycle GHG emissions
5.61
As outlined above, the Pepper Inquiry recommended that the Australian and NT Governments seek to ensure that there is no net increase in the lifecycle GHGs emitted in Australia from any onshore shale gas produced in the NT.
5.62
Submitters and witnesses, however, questioned whether this could in practice be achieved, noting the sheer volume of GHGs that would be released by the development of the Beetaloo. For example, Protect Country Alliance submitted:
While the NT Fracking Inquiry suggested that emissions from gas production could be offset by savings in other areas, the scale of reductions that would be needed for even the lower level of production is totally impractical. For example, offsetting the lower rate of production computed in this study for 5 per cent leakage would require reducing emissions in other areas by more than the entire transport sector. Even the heroic assumption that fugitive emissions could be constrained to 1.7 per cent—a lower figure than any measured for any shale gas development—would still require offsets comparable to the emissions from all industrial processes. At the higher production rate for which emissions have been calculated, even assuming unprecedented success in reducing leakage and using the 100-year timescale instead of 20 years, the scale of offsets required would be about the same as all emissions from the entire transport sector. There is no conceivable way of achieving reductions on that scale before the 2030 deadline for us to meet our Paris obligations.
5.63
Mr Mark Ogge from The Australia Institute noted not just the large amount of emissions, but also the staggering costs of offsets:
…the Pepper inquiry found, under their high scenario, that it would result in around 100 million tonnes a year, including scopes 1, 2 and 3, 40 million tonnes of which would be in Australia. So it would increase Australia's accounted-for emissions by around seven per cent. It could be massive. To offset all of those emissions could cost billions of dollars.
5.64
Mr Roderick Campbell from The Australia Institute reminded the committee that GISERA is conducting a 'greenhouse gas study' (see Chapter 2), that aims to better quantify the amount of potential GHGs from development in the Beetaloo. However, while considering how much GHG emissions might need to be offset, he noted that 'despite $1.3 billion in public money going into carbon capture and storage, we still don't have an operating CCS [carbon capture and storage] project in Australia'.
5.65
The Environment Centre NT and Dr Neale pointed out that the Pepper Inquiry did not provide any suggestions as to how GHGs emitted by a shale gas industry in the Beetaloo could be offset, noting:
The Inquiry…accepted that it would not be possible to achieve this locally, suggesting initiatives in other parts of Australia such as the development of carbon capture and storage technologies and increased deployment of renewable energy.
Since the Pepper Inquiry, freedom of information documents have been released which suggest that the Commonwealth's own environment department holds the view that emissions from the Beetaloo "may be difficult to offset", would impact Australia's ability to meet its Paris Agreement commitments, and could be more than four times larger than the Inquiry's estimation. It is very concerning that there is still no publicly‑disclosed plan to offset life cycle greenhouse gas.
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In evidence, the Environment Centre NT's Dr Howey added that 'we have no idea how these emissions are going to be offset'.
Bilateral energy and emissions reduction agreements
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The Australian Government is developing a series of bilateral energy and emissions reduction agreements with state and territory governments, to improve energy reliability and affordability across the country and to support the transition of energy markets to lower emissions technologies.
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The Environment Centre NT and Dr Neale commented that, although the Minister for Energy and Emissions Reduction, the Hon Angus Taylor MP, has announced negotiations for a Commonwealth/NT bilateral agreement, no details have been forthcoming since October 2020.
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Further, while the NT Government has committed to net zero carbon emissions by 2050, the Environment Centre NT and Dr Neale queried whether the territory government will be able to reach its target based on its draft policy:
In early 2021, the NT Government released (for targeted consultation only) a draft "Large Emitters Policy" aimed at forcing developers with large greenhouse gas emissions to take responsibility for their emissions. However…it is our view that the draft policy (if it remains as is) would not require gas companies to offset their emissions and no fracking activities would fall within its purview... The weakness of this (as-yet-still-draft) policy casts into serious doubt the ability of the Northern Territory to reach its nonbinding target of net zero carbon emissions by 2050.
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The committee notes the IEA's Net zero by 2050 report, which sets out a roadmap for governments and the global energy sector to transition to an environmentally and economically efficient renewable energy system by 2050. The roadmap also presents a number of recommendations to keep forecast temperature increases to 'give the world an even chance of limiting the global temperature rise to 1.5°C', including a rapid transition away from fossil fuels:
There is no need for investment in new fossil fuel supply in our net zero pathway
Beyond projects already committed as of 2021, there are no new oil and gas fields approved for development in our pathway, and no new coal mines or mine extensions are required. The unwavering policy focus on climate change in the net zero pathway results in a sharp decline in fossil fuel demand, meaning that the focus for oil and gas producers switches entirely to output—and emissions reductions—from the operation of existing assets.
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The committee also notes the release of the Intergovernmental Panel on Climate Change's (IPCC) 2021 report, which stated:
Scientists are observing changes in the Earth's climate in every region and across the whole climate system. Many of the changes observed in the climate are unprecedented in thousands, if not hundreds of thousands of years, and some of the changes already set in motion—such as continued sea level rise—are irreversible over hundreds to thousands of years. However, strong and sustained reductions in emissions of carbon dioxide (CO₂) and other greenhouse gases would limit climate change. While benefits for air quality would come quickly, it could take 20–30 years to see global temperatures stabilize.
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Especially in respect of GHG emissions, the IPCC warned: 'unless there are immediate, rapid and large-scale reductions in greenhouse gas emissions, limiting warming to close to 1.5°C or even 2°C will be beyond reach'. The expansion of fossil fuel projects is taking Australia in the opposite direction, making economy-wide reductions impossible.
Departmental responses
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DISER representatives advised the committee that the NT Government has agreed to no net increase in lifecycle greenhouse gas emissions emitted in Australia from any onshore shale gas industry in the Beetaloo.
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Mr Paul Trotman, Head of Division (Resources Division) at DISER, told the committee that 'the [Australian] government has said it will work with the NT government to manage greenhouse gas emissions from onshore shale gas development in the NT'.
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However, as that industry is still in the exploration phases, it is not yet known how much carbon could be emitted. Ms Helen Bennett, Head of the Climate Change Division at DISER, said that 'CSIRO and others are working on the associated emissions from that development'.
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Further, DAWE gave evidence that the Australian Government is still negotiating with the NT Government on a proposed emissions reductions agreement:
Like the other agreements—so we've had bilateral arrangements with New South Wales, South Australia and Tasmania—the NT agreement is going to be a high-level document focusing on areas of mutual interest. So, in the broad, it will cover energy and emissions reduction. But those negotiations are still ongoing, and I haven't been given a time frame for when that will be finalised.
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Ms Bennett referenced the Emissions Reduction Fund (ERF), advising:
The government has been putting a number of policies in place to ensure that the ERF can expand, including improving some regulatory arrangements out of the fund. There are a number of new methods that are currently under development.
Committee view
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Information provided to this inquiry clearly shows a great deal of unease over fracking in the NT community, including its potential negative outcomes for the water systems, land clearing and the climate crisis.
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These concerns, which are set out in this committee view, were broadly expressed by a range of groups, including Traditional Owners, pastoralists, communities who live and work in the Beetaloo, as well as more generally among environmental groups.
Pepper Inquiry recommendations
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Concerns over the potential environmental outcomes of fracking in the NT are not new. As noted earlier in this chapter, the Pepper Inquiry's Final Report found a 'strong antipathy' from the NT community to the likely impacts of hydraulic fracturing, including environmental effects, with the perception of many stakeholders being that it 'is not safe, not trusted and not wanted'.
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This perception was one that many stakeholders voiced to this Senate inquiry. It is clear to the committee that there is still great opposition to shale gas expansion in the NT, especially in relation to the potentially disastrous impacts it will have for the environment of local communities, the NT, Australia and globally.
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This opposition is justifiable, given the gulf between the NT Government's public commitment to the Pepper Inquiry's recommendations and the actions that have actually been taken.
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The 135 recommendations of the Pepper Inquiry were intended to reassure stakeholders that the impacts of shale gas development could be managed, mitigated, and overseen effectively. These recommendations were intended by Justice Pepper to be implemented as a package, which would reduce the inherent risks of onshore gas development to 'acceptable levels'.
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Although the NT Government accepted all 135 recommendations, information submitted to this inquiry suggested that many of the key recommendations have not been progressed satisfactorily.
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As noted earlier, fewer than half the recommendations in the Pepper Report have been completed. Implementation of 73 of the report's recommendations has begun, while one recommendation remains unaddressed.
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These signs clearly indicate that the development of mitigation measures for the protection of the NT environment from fracking are not yet viable, both in practical terms, and in reassuring a concerned public. As a result, projects are not yet worthy of substantial Commonwealth subsidies, particularly to well‑resourced companies which have close links to the Liberal Party.
Environmental outcomes
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It is also clear in the evidence that there is still a great deal of community unease over the potential environmental outcomes of the development of fracking in the NT, which is exacerbated by the inadequate and unfinished SREBA process, as well as the patchy adoption and implementation of other Pepper Inquiry recommendations.
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It is worth noting that stakeholders raised serious concerns over the damage to Beetaloo ecosystems. This includes the surface and groundwater systems that support the health of human communities and workplaces, including Traditional Owners, pastoralists, and towns and remote communities in the Beetaloo. These concerns are not only related to the risk of pollution from wells, leakage and contamination of water supplies, but also to potential damage to underground ecosystems, which would have devastating effects on stygofauna, the value of which is not yet clearly understood.
Strategic Regional Environmental and Baseline Assessments
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Of particular concern to the committee is the NT Government's current approach to develop a SREBA for the Beetaloo. As noted earlier, a central recommendation of the Pepper Inquiry was that a SREBA be undertaken prior to the granting of approvals and that undertaking a SREBA for the Beetaloo should be prioritised.
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Moreover, evidence was received that the Pepper Inquiry recommendations for these studies have been compromised in implementation, including that:
timeframes for completion have been reduced from the recommended 3–5 years to 18 months;
funding is now coming from NT taxpayers, rather than proponents;
research is being undertaken by research bodies partially funded by the oil and gas industry; and
development activities have been granted approvals, even though a baseline assessment has not been completed for the Beetaloo.
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As over 40 per cent of Pepper Inquiry recommendations depend on the findings of SREBAs, the committee considers it crucial that no development or projects are approved without the completion of robust baseline studies.
Recommendations for the Commonwealth
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Two recommendations of the Pepper Inquiry relate to the Australian Government, namely, that onshore shale gas development is added to the 'water trigger' in the EPBC Act (Recommendation 7.3), and that the Australian and NT Governments work together to ensure there is no net increase in greenhouse gas emissions in Australia from NT fracking.
The lack of a water trigger in the EPBC Act
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Regarding the Pepper Inquiry's recommendation on adding a water trigger for shale gas fracking projects to the EPBC Act, the committee notes that this is the only recommendation that is solely the responsibility of the Commonwealth Government.
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The committee understands that the issue of safe and abundant water is a vital interest of communities in the Northern Territory, and sees it as essential that fracking is overseen by the federal EPBC framework, in the same way as coal seam gas and large mining projects.
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DAWE signalled that this is not under consideration as part of the government's current review of the EPBC Act. This is despite the findings of the Pepper Inquiry, and the submission made by the NT Government to the Samuel Review that is informing the government's consideration of EPBC Act reform.
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The committee notes that it may seek further evidence on the importance of extending the EPBC Act's water trigger in the remainder of this inquiry.
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The committee recommends that the Environment Protection and Biodiversity Conservation Act 1999 be amended to include a water trigger for onshore shale gas developments, to ensure that the Pepper Inquiry recommendations will be implemented in full, as promised.
Concerns over greenhouse gas emissions
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The committee heard concerns about the volume of GHGs that could potentially be emitted from the development of a shale gas industry in the Beetaloo. These emissions cannot be viewed in isolation, particularly when it is not yet known just how many tonnes of GHG emissions the development of this area will produce both domestically and internationally.
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In relation to lifecycle GHGs, the committee agrees with the Pepper Inquiry Panel that the Australian and NT governments must ensure no net increase in lifecycle GHG emissions as a result of any development in the Beetaloo.
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The committee heard that the Beetaloo is one of many onshore and offshore gas developments, all of which create GHG emissions–some significantly more so than others. The Australian Government has not yet quantified how the projects it is proposing to accelerate under the BCD Program would contribute to these increased emissions. Nor does the government have a plan or agreement in place to offset these emissions.
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The committee notes that the Australian Government is working towards a bilateral emissions reduction agreement—as it is in most other states and territories. However, DISER has indicated that this approach is predicated on offsets. The amount of GHGs to be offset and the cost of so doing would be, in the words of submitters and witnesses to this inquiry, impractical if not impossible.
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The committee recommends that the Australian Government expedite its negotiations with the Northern Territory Government for a bilateral emissions reduction agreement, with a view to implementing the Pepper Inquiry recommendation to ensure no net increase in Australia's lifecycle greenhouse gas emissions which must be borne by the shale gas industry in the Beetaloo.
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More broadly, the committee notes the plethora of international expert opinions and scientific evidence—including from the IEA—that recommends against the continued expansion of the fossil fuel industry.
Senator Sarah Hanson-Young
Chair