Referral
1.1
During the 46th Parliament, the Senate referred to the Environment and Communications References Committee (the committee) an inquiry into oil and gas exploration and production in the Beetaloo Basin (the Beetaloo), for interim report by 3 August 2021 and final report by 29 March 2022.
1.2
Following extensions granted by the Senate, the committee presented several intermediate reports, including a substantive interim report on 24 August 2021 (the Interim Report). These reports are referred to where necessary throughout this Final Report.
1.3
In the 47th Parliament, the Senate agreed to the committee’s recommendation that the inquiry be re-adopted, for inquiry and report by 14 February 2023, with its terms of reference unchanged. These terms are:
Oil and gas exploration and production in the Beetaloo Basin, with particular reference to the Industry Research and Development (Beetaloo Cooperative Drilling Program) Instrument 2021, which provides public money for oil and gas corporations.
1.4
On 9 February 2023, the Senate granted the committee an extension of time to report to 21 March 2023. Further extensions were granted on 21 and 28 March 2023 and on 12 April 2023, requiring the Final Report to be tabled by 19 April 2023.
Re-adoption of the inquiry in the 47th Parliament
1.5
On re-adoption, the Senate resolved that the committee has the power to consider and use its records from the 46th Parliament for the inquiry.
1.6
These records comprise the 316 submissions received, the Committee Hansard transcripts of evidence from five public hearings and all other documents published as part of the inquiry. These records are also available on the committee’s website.
1.7
In the 47th Parliament, the committee agreed to receive new submissions and updates to submissions received in the 46th Parliament. The committee received 17 new or updated submissions, which are listed at Appendix 1.
1.8
The committee also held a public hearing in Canberra on 10 October 2022. A list of witnesses who gave evidence at this hearing is at Appendix 2.
1.9
All public submissions, Committee Hansard transcripts, additional information, tabled documents and answers to questions on notice are available on the committee's website.
Acknowledgements
1.10
The committee would like to acknowledge the individuals and organisations whose contributions have informed the committee throughout the 46th and 47th Parliaments.
1.11
In order to speak directly with First Nations people, the committee held a public hearing in Darwin on 23 March 2022. A large number of Traditional Owners, Native Title holders and their families travelled many hundreds of kilometres to attend this and the previous day’s public hearings. The enormity of this effort was contextualised by Ms Larissa Baldwin, then Director of the First Nations Justice team at GetUp:
People from as far as Alice Springs and the town camps outside Alice Springs have been on the road. We drove up here so we could pick up different family members on the way. Over the course of the last year, in terms of lobbying for this inquiry, it has been thousands of kilometres… [I]t's really important to understand that biosecurity zones have only just been lifted. For communities in the NT that have been facing huge outbreaks, to travel to Darwin today it would have to be for a very important reason. A lot of these members haven't been outside their communities… They're very cautious about where they go, especially for the traditional owners... Also, these people who are here—there are more people who are not here today—are representatives of their communities. They're not people who just jumped in the car and wanted to come up for a ride. There is a broader consideration about who's going to come up and represent the community, who can speak up strongly and what are the themes and the issues that need to be discussed. There are lots of community meetings that have happened over the last couple of years in relation to this specific inquiry.
1.12
In view of these tremendous efforts, the committee especially thanks First Nations people for their assistance in providing the committee with their valuable perspectives on hydraulic stimulation or fracturing (fracking) in the Beetaloo.
Declaration
1.13
The Chair, Senator Sarah Hanson-Young, has advised that, in the 12 months to 30 September 2022, the Australian Greens received donations of $14 500 each from the Ravazotti-Langenhoven family-owned pastoral companies, Rallen Australia Pty Ltd (Rallen) and Amanzi Property Group Pty Ltd. Rallen and one of its directors, Mr Pierre Langenhoven, provided information to the inquiry in March 2022. The Chair and her staff were not aware and had no knowledge of the donations until 5 December 2022 at which point the Chair immediately advised the committee in writing of the donations.
1.14
The committee notes Senator Malarndirri McCarthy's Traditional Owner declaration included in the Register of Senator Interests:
The Northern Land Council records the following traditional interests in land in the Northern Territory held by Senator Malarndirri McCarthy.
Senator McCarthy is a traditional Aboriginal owner, as defined in the Aboriginal Land Rights (Northern Territory) Act 1976, of Vanderlin Island (Wurralibi Aboriginal Land Trust) and holds beneficial interests in the Narwinbi Aboriginal Land Trust ('Borroloola Commons') in the Northern Territory.
Senator McCarthy is second generation jungkayi ('custodian' for mother's country) for Wuyaliya country on Southwest Island (Wurralibi Aboriginal Land Trust).
Senator McCarthy is jungkayi for the emu dreaming and country called ngalamja which is on 7 Emus Station.
The Interim Report
1.15
The Interim Report focussed on the now closed Beetaloo Cooperative Drilling Program (BCD Program), which aimed to encourage and facilitate oil and gas exploration in the Beetaloo, and an associated funding instrument, the Industry Research and Development (Beetaloo Cooperative Drilling Program) Instrument 2021 (Instrument).
1.16
The Interim Report examined:
the former Australian Government and the NT Government’s economic rationale for developing a gas industry in the Beetaloo;
the views of First Nations people regarding the development of that industry on Country; and
the potential environmental implications of fracking in the Beetaloo.
1.17
The Interim Report made six recommendations to the Australian Government, and, in one of those cases, also to the NT Government. These recommendations are set out in Appendix 3.
1.18
In accordance with a Senate resolution of 14 March 1973, Commonwealth government responses to committee reports are to be presented within three months of a report being tabled. Successive governments have affirmed their commitment to providing timely responses. However, the Senate has not yet received a response to the committee’s reports from the 46th Parliament.
1.19
In this Final Report, information, conclusions and recommendations from the Interim Report are referred to where necessary.
Background context
1.20
The Interim Report contained contextual information for the inquiry, some of which is outlined below.
The Pepper Inquiry
1.21
In March 2018, the Hon Justice Rachel Pepper presented a final report to the NT Government for the Independent Scientific Inquiry into Hydraulic Fracturing in the Territory (the Pepper Inquiry). The terms of reference for this inquiry required the panel to assess and determine:
the nature and extent of the risks associated with hydraulic fracturing of onshore unconventional shale gas reservoirs and its associated activities on the environmental (aquatic, terrestrial and atmospheric), social, cultural and economic conditions of the NT;
whether these risks can be mitigated to an acceptable level;
if they can, by what methodology or methodologies can these risks be mitigated; and
whether the existing regulatory framework is sufficient to implement these methodologies, and if not, what changes need to be made.
1.22
The Pepper Inquiry found, among other things, that an onshore shale gas industry could be developed in a manner that protects the environment, by designing and implementing a robust regulatory framework, which was set out in 135 detailed recommendations:
Most, if not all, of the environmental impacts and risks associated with hydraulic fracturing and any onshore shale gas industry can, in the Panel’s view, be effectively managed and mitigated to an acceptable level by strong governance.
1.23
The NT Government accepted all 135 recommendations made by the Pepper Inquiry and lifted an onshore fracking moratorium, stating concurrently that the government was committed to implementing the recommendations.
1.24
The NT Government then signed a Memorandum of Understanding with the former Australian Government to work together to develop the Territory’s gas industry.
1.25
In March 2022, the then NT Minister for Environment, the Hon Eva Lawler MLA, affirmed that the NT Government remains committed to implementing the recommendations of the Pepper Inquiry.
Strategic Basins Plan
1.26
In the 2020-21 Federal Budget, the former Australian Government committed $52.9 million over four years to unlock the nation’s gas supply, deliver an efficient pipeline and transportation market, and empower gas customers. Part of this funding ($28.3 million) was allocated to establishing five Strategic Basin Plans to accelerate gas development in priority geological basins.
1.27
On 16 October 2020, the then Minister for Energy and Emissions Reduction, the Hon Angus Taylor MP, announced that the Beetaloo would be the first basin to be explored under the Strategic Basins Plan.
1.28
Following this announcement, the former Australian Government committed significant funding to directly support development of the gas industry in the Beetaloo, as well as substantial indirect support for development of the Beetaloo resource, including gas, energy and regional infrastructure.
1.29
Most notably, in the 29 March 2022–23 Federal Budget, the former Australian Government announced $7.1 billion in funding over 11 years from 2022-23, ‘to support existing programs and turbocharge the economies of 4 key regional hubs across Australia’. One of these ‘hubs’ was the Territory, where the Commonwealth’s support was described as follows:
…to fund infrastructure projects that support the manufacturing industry, promote the onshore processing of critical minerals and to strengthen the region’s position as an industrial and renewable energy hub.
1.30
According to then Minister for Infrastructure, Transport and Regional Australia, the Hon Barnaby Joyce MP, of the $7.1 billion in funding, about $2 billion had been allocated to the Territory to develop gas related infrastructure at Middle Arm of Darwin Harbour:
$1.5 billion to build new port infrastructure, such as a wharf, an offloading facility and dredging of the shipping channel, to boost the region’s importing and exporting ability…
$300 million to support low emissions LNG and clean hydrogen production at Darwin, together with associated carbon capture and storage infrastructure.
$200 million to further develop the Middle Arm Sustainable Development Precinct, delivering enabling infrastructure such as a rail spur and a new road network to strengthen supply chains.
Beetaloo Basin Strategic Basin Plan
1.31
On 14 January 2021, nearly one month after announcing the BCD Program (described below), the former Australian Government announced the Unlocking the Beetaloo: The Beetaloo Strategic Basin Plan (the Beetaloo Strategic Basin Plan). This plan comprises four key actions:
Action 1: Building a clear picture of the Beetaloo;
Action 2: Regulating efficiently and effectively;
Action 3: Enabling infrastructure; and
Action 4: Sharing regional benefits.
1.32
The Interim Report examined these actions in detail, particularly Action 1, a key measure of which is the BCD Program.
BCD Program
1.33
On 17 December 2020, the then Minister for Water, Resources and Northern Australia, the Hon Keith Pitt MP, announced the BCD Program. This program provided up to $50 million over two years for petroleum exploration that occurred in the Beetaloo before 30 June 2022. Eligible applicants could apply for grants of up to 25 per cent of eligible project expenditure, with a minimum of $750 000 and a maximum of $7.5 million per well.
1.34
On 7 July 2021, Minister Pitt announced the first grants under the BCD Program. Imperial Oil and Gas, a fully owned subsidiary of Empire Energy Group Ltd, was successful in its applications for up to $21 million for three exploration wells in the Exploration Permit (EP) 187 area. These grants were examined in some detail in Chapter 2 of the Interim Report.
1.35
On 7 March 2022, Minister Pitt then announced a fourth grant of $7.5 million to Sweetpea Petroleum Pty Ltd, a wholly owned subsidiary of Tamboran Resources Limited (Tamboran). The grant was awarded to support the drilling of the Maverick 1H well within Tamboran’s EP 136 area and is discussed in Chapter 2.
1.36
The BCD Program was open for funding applications until 30 June 2022 or until fully subscribed (whichever was the earlier) and is therefore no longer available.
Scope of the Final Report
1.37
The Final Report focuses on various matters raised in the Interim Report, the regulation and specific environmental impacts of the gas industry in the Beetaloo, and concerns expressed by First Nations communities and pastoralists. The following chapters:
provide an update on certain matters raised in the Interim Report (Chapter 2);
examine the role of the Australian Government, including with respect to national greenhouse gas (GHG) emissions (Chapter 3);
discuss environmental regulation in the Beetaloo, with specific attention to Territory-level GHG emissions from gas activities (Chapter 4); and
highlight concerns from First Nations communities and pastoralists (Chapter 5).