Australian Greens' Additional Comments

1.1In April 2022 during the federal election campaign,[1] the Albanese Government committed $1.5 billion to the Middle Arm Industrial Precinct despite the lack of health or environmental assessment, business case and Larrakia consent, and without any transparency as to how this decision was made. As is set out later in this report, it seems the decision was based purely on pork-barrelling and dodgy deals and not the best interests of the local community or the planet.

1.2If this industrial precinct proceeds as currently proposed it will significantly expand the fossil fuel and fracking industries at a time when Australia’s economy requires rapid and dedicated efforts to decarbonise.

1.3The creation of a gas and petrochemical hub would have serious and widespread health and environmental impacts on Northern Territory (NT) communities and ecosystems that are already on the frontline of climate change. Darwin has historically had an average of 11 days a year above 35 degrees. However, in the 3°C world that is guaranteed if more projects like the Beetaloo and Middle Arm proceed, Darwin will swelter above this range for 265 days a year.[2]

1.4The Albanese Government is using public money to create this future. They are propping up new fossil fuels and delivering the so-called Gas Fired Recovery that the Morrison Government didn’t have the public support to complete.

1.5This inquiry heard loud and clear that the residents of Darwin and the broader NT do not want this $1.5 billion to be used to expand dangerous industries that threaten their health and make the NT uninhabitable. Any government funding must be invested in clean industries of the future.

Expansion of the gas industry

1.6Climate change is projected to disproportionately affect NT communities. Darwin is expected to become a climate change ‘sacrifice’ zone and uninhabitable in coming decades.[3] NT residents are already at risk of extreme heat, rising sea levels, and increasing natural disasters. Vulnerable NT communities are especially susceptible to the implications of climate change on healthcare, housing, and mental health.

1.7It is no wonder that a project that locks the NT into a gas-fired future received widespread opposition from doctors, parents, Traditional Owners, environmentalists and tourism operators alike, whose futures and livelihoods are dependent on the state of the climate.

1.8The International Energy Agency has clearly stated that to stay below 2 degrees of warming, or even to meet Australia's legislated net zero by 2050 target, there can be no new fossil fuel infrastructure.[4] While the NT and Albanese governments have attempted to use CCS and some green industries to greenwash this as a ‘sustainable’ precinct, the reality is that the primary beneficiary of the $1.5 billion subsidy will be the fossil fuel industry,[5] locking the Northern Territory into expanded gas production, pollution and export for decades to come.

1.9Despite the Prime Minister’s assurances from May 2024 that his government was not investing in gas, saying: ‘not a single government dollar as a result of this announcement in gas, not one’,[6] Tamboran Resources and its plans to export Beetaloo gas is set to be a key beneficiary of the proposed $1.5 billion investment in infrastructure.

1.10On 9 June 2023, [before relisting in the notorious tax haven and secrecy jurisdiction of Delaware][7] Tamboran announced to the ASX that it had been granted exclusive rights to 420 acres at Middle Arm by the NT Government to construct an LNG terminal capable of exporting 6.6 million tonnes of gas perannum to be fracked from the Beetaloo.[8]

1.11Tamboran’s proposed LNG production facility is intended to be scaled up to be the largest in Australia, exporting up to 20 million tonnes per annum at full capacity. NT officials have warned opening up the Beetaloo could range between 39 to 117 million tonnes a year [of carbon dioxide equivalent].[9]

1.12This means that opening up the Beetaloo Basin will increase Australia’s current emissions by between 9–27 per cent.[10]

1.13In short, as the climate crisis is unfolding, the Albanese Government is contributing $1.5 billion of taxpayer money to unlock Australia’s biggest gas export terminal so that it can be connected to Australia’s biggest ever onshore gas field.

1.14The Albanese Government’s subsidising of Beetaloo gas expansion and export plans is widely opposed. Even Tivan Limited, a critical minerals company identified as another potential proponent of the precinct, questioned the funding’s prioritisation of the gas industry and voiced concerns that the Commonwealth's investment could be ‘perceived as working against the energy transition’.[11]Locking the NT into reliance on gas at a time when a transition away is required will leave communities and the NT economy stranded when this resource is no longer viable.

1.15If the Federal Government wishes to brand Middle Arm as a sustainable precinct, it should follow through by ruling out fossil fuels at the precinct, and commit instead to investing $1.5 billion of taxpayer money in the development of future renewable industries that truly benefit NT communities and the economy in the long-term.

1.16The NT Government is doing everything within its power to detonate this Beetaloo climate bomb. In April 2024, the NT Government signed an offtake agreement with Tamboran for 40 terajoules daily from the Beetaloo Basin for nine years from 2026 (with an option to extend until 2042).[12] Again in July 2024, the NT Government announced another offtake agreement with Empire Energy for 25 terajoules daily from the Beetaloo Basin for ten years from 2025 (with an option up to 35 terajoules daily).[13] These agreements empower these two U.S fracking companies to go to market to obtain finance to develop their projects now there is a guaranteed domestic customer for their gas.

1.17The Federal Government is also determined to streamline this project, with Minister for Resources and Northern Australia, the Hon Madeleine King’s Future Gas Strategy stating that the Beetaloo is one of ‘the most likely to be developed fields’.[14]

1.18Despite government optimism for the project, significant questions were raised about the international competitiveness and viability of Tamboran’s gas supply, given the high volumes of LNG coming online from Qatar. The committee heard that Qatari LNG producers’ costs were approximately $4 per gigajoule, whereas Tamboran’s would be in the order of $10 per gigajoule.[15]

1.19Concerns were also raised about the likelihood that the majority of the economic benefit of an expanded fossil fuel industry would flow to Tamboran’s executives and shareholders rather than providing broader benefits to the NT community. Further, as the vast majority of Tamboran’s LNG is designated for export markets, it will not alleviate the gas shortages currently experienced on the east coast of Australia.

1.20Gas and petrochemical production are some of the highest polluting industries in the world. While the NT Government continues to claim it can meet net zero targets while doing deals with gas companies for new gas fields, a report it commissioned (and refused to release) shows that this is not the case. Even without new gas projects, increasing emissions from existing INPEX and Santos LNG facilities would increase NT emissions by up to 50 per cent, while the opening of gas fields in the Beetaloo Basin could lead to a 100–150 per cent increase to NT emissions.[16]

1.21The NT Government promised its citizens in 2018 that all 135 recommendations from the Pepper Review would be implemented in exchange for lifting the moratorium on fracking.[17]

1.22However, as the independent monitor of this implementation, Dr David Ritchie wrote in his final report to the government, the NT Government has not implemented all these recommendations despite forging ahead with fracking. Most important of these is recommendation 9.8 to ‘ensure that there is no net increase in the life cycle of GHG (Greenhouse Gas) emissions emitted in Australia from any onshore shale gas produced in the NT’.[18]

1.23Dr Ritchie wrote:

Despite the Commonwealth agreeing to “work with the Territory to support its implementation of recommendation 9.8 using available technology and policies”, there has been no progress on the crux of this recommendation, that is: to develop a system that would allow the public to see how a specific reduction in GHG elsewhere in the Australian economy is directly attributed to offset GHG emitted in Australia from production and consumption of shale gas produced in the NT.[19]

1.24The Federal Government cannot ignore the failure of the NT Government to uphold its promise to ensure no net increase in emissions from fracking. While the Greens and the Albanese Government were able to legislate zero scope 1 emissions from the Beetaloo through negotiations on the Safeguard Mechanism, Tamboran has to date failed to outline how it would meet this scope 1 baseline. Further, the issue of regulating scope 2 and domestic scope 3 emissions remains unresolved. This is a commitment made by the Government that remains outstanding:

JOURNALIST: There's concerns that [the Pepper recommendation] 9.8 hasn't been implemented with respect to the scope 2 and scope 3 emissions. Do you think that until that is firmed up, production approvals should be paused?

CHRIS BOWEN: Well, in terms of my role as Climate Change Minister, I'll be ensuring that it is implemented, absolutely, before anything further occurs in relation to our involvement, and the climate change portfolio.[20]

Environmental impacts

1.25The Middle Arm development site is proposed to be located on a biodiversity hotspot that hosts several threatened and migratory species. Specialised fauna are reliant on the harbour’s mangrove ecosystem, and the centre of at least one population of threatened species is located on Tamboran’s reserved site. These marine and terrestrial species are particularly vulnerable to cumulative impacts from industrialisation.

1.26Yet, the proposed precinct would clear 1500 hectares of largely intact terrestrial habitat and dredge 20 million cubic metres of the marine ecosystem, despite existing maritime infrastructure at Darwin’s East Arm. Already, existing LNG plants have had a significant impact on Darwin Harbour, with research showing dolphin numbers have significantly declined.[21]

1.27Environmental destruction has flow-on effects for industry in the Darwin harbour. Tourism operators and fishermen gave evidence that their livelihoods have already been impacted by existing LNG processing facilities, and that the Middle Arm proposal would only exacerbate these impacts further.[22] These industries cannot be left to die in the name of gas expansion—their contribution to the NT economy, in particular tourism, cannot be overstated, and must be protected into the future.

1.28Any loss to biodiversity has not, and cannot be offset. This is particularly true when there is a severe lack of data and the true impacts are not known. The terrestrial and marine ecosystems of the site have not been adequately researched or mapped, meaning there is no baseline from which to assess the development’s potential impacts. Inadequate baseline research undermines the integrity of government-endorsed environmental approvals.

1.29The decision to undertake strategic environmental assessments further limits regulatory oversight and reduces scrutiny of individual projects, and prioritises economic development at the expense of protecting the environment, health, and cultural values. As it is still unclear what future activities will be undertaken at the precinct, strategic environmental assessments cannot sufficiently assess the expected or cumulative impacts.

1.30More concerning is the involvement of gas companies in funding for research to date. Concerns were raised regarding the integrity of INPEX’s funding of marine monitoring of the Darwin Harbour for the existing Ichthys LNG facility, the adequacy of marine monitoring programs, and the lack of research and monitoring into the impacts of dredging.[23]

1.31It should go without saying that industry cannot be left to do its own environmental monitoring and assessment. This is no more true than when it comes to Tamboran, who do not believe that the presence of threatened species or the impact of its fracking wells on water resources raise any obligations under national environment laws.

1.32This Parliament gave the Federal Environment Minister the power to call in fracking projects for assessment if they are likely to have a significant impact on water resources. It is clear Tamboran will not willingly abide by its obligations, despite the clear impact its fracking will have on water in the Beetaloo Basin; yet the Minister remains silent on enforcing the power she does have.

Health impacts

1.33It is deeply concerning that the Australian Government committed public funding to the Middle Arm Precinct in the absence of any health impact assessment, given it is proposed to be developed on Palmerston’s doorstep, in the outer suburbs of Darwin.

1.34Living near gas facilities has been linked to serious health issues, including asthma, heart disease, and cancer. Darwin residents already experience poor air quality from the operations of the harbour’s two existing LNG facilities.

1.35A range of medical experts provided evidence that the proposed development at Middle Arm would further exacerbate air pollution and place local populations at risk, especially children, the elderly and those with existing health conditions. These impacts would only be intensified by the potential inclusion of petrochemical facilities, originally slated as one of the Precinct’s main purposes. Despite significant community concerns, this remains a proposal the NT Chief Minister would not rule out.[24]

1.36Even more concerning for any future projects is evidence that the NT EPA is an inadequate regulator, and cannot be relied upon to enforce safety regulations to protect the health of the Darwin community. The inquiry heard that although the regulator is aware of unacceptable levels of known human carcinogens being released into the atmosphere from existing LNG operators, it does not enforce stricter measures on industry.[25]

1.37The World Health Organisation says there are no safe exposure limits for benzene, a known human carcinogen[26]—yet this inquiry heard that INPEX’s LNG facility in Darwin has released approximately 6000 tonnes of benzene. This figure may be higher but due to the lack of monitoring by the NT EPA, the extent of toxic carcinogens released into Darwin’s atmosphere is unknown. Despite evidence that INPEX’s acid gas removal units (required to stop the release of toxic chemicals) have been offline for at least 3 years out of a total 5 years, the NT EPA has taken no action to stop this dangerous release of chemicals into the Darwin community.

First nations views and engagement

1.38Many Larrakia Traditional Owners have been clear that their free, prior and informed consent has not been given for the proposed Middle Arm Precinct.

1.39The potential impact on First Nation’s values will be significant, yet culturally appropriate information has not been provided to relevant communities, and individual proponents of the Middle Arm project are consulting with only specific cohorts of First Nations communities. There has been inadequate consultation with stakeholders, particularly First Nations people, regarding the Middle Arm proposal, as well as related fracking activities in the Beetaloo Basin. This is despite widespread calls for broader and more meaningful consultation on, and information about, the development.

1.40First Nations consultation requirements under relevant Commonwealth and NT laws do not sufficiently provide for the free, prior and informed consent of First Nations people, meaning impacts on cultural heritage are not covered in any assessment. This is a serious omission. It is a matter of priority for governments, particularly the Northern Territory government, to update Aboriginal cultural heritage legislation to protect the tangible and intangible cultural heritage of Darwin Harbour and Larrakia country, incorporating principles of free, prior and informed consent.

1.41Genuine consultation with, and free prior and informed consent from, Traditional Owners is critical for any form of development to proceed at Middle Arm. Governments must incorporate community benefit principles to engage collaboratively with, and achieve positive outcomes for, First Nations people and communities. Considering how First Nations people and communities can be involved in and benefit from the development of future industries that are not based on fossil fuels is important.

1.42To date, benefits that the Larrakia people receive from having two multi-billion-dollar LNG plants on what was formerly their traditional lands, sits in stark contrast to the benefits the corporations running the facilities receive. The corporations earn billions of dollars from their facilities. For example, the INPEX Ichthys site alone realised a net income of approximately $3 billion in 2023.[27]In comparison, the deal struck in 2018 gives the Larrakia people $24 million over the lifetime of the plant of approximately 40 years.[28]

Conflicts of interest and transparency

1.43The NT Government appears to hold inappropriate and often undisclosed connections to the gas industry and is conflicted with regards to advocating for this development. This intimacy reached a crescendo in April 2024 when the Chief Minister’s official media release included extended quotes from Tamboran CEO, Mr Joel Riddle.[29]

1.44Donations have been received, offtake agreements have been inked but the process of decision-making has not been open to public view.

1.45Federal funding was committed to the Middle Arm development before Commonwealth and Territory environmental approval processes have been completed and before Infrastructure Australia’s evaluation of the project has been finalised. The primary focus of the Commonwealth’s $1.5 billion equity injection into shared marine infrastructure inappropriately favours one proponent above the others, Tamboran Resources proposed fossil gas facility.

1.46In December 2023, the NT Independent reported that former Chief Minister Fyles’ senior political adviser Gerard Richardson simultaneously earned income in his government role, while at the same time being paid by Tamboran through the lobbying firm Brookline.[30]

1.47Brookline was co-founded in 2023 by Lidija Ivanovski, who had previously worked for the NT Chief Minister Paul Henderson[31] and in the last Federal Parliament, was the Chief of Staff to Shadow Defence Minister Richard Marles.[32]

1.48Between March and May 2022, Ms Ivanovski took time out of this parliamentary role to be the chief of staff running Labor’s federal election campaign.[33]At the precise time that Ms Ivanovski was running Labor’s election campaign, then Shadow Infrastructure Minister Catherine King announced that a Labor Government would fund the Middle Arm project with $1.5 billion of public money.[34]

1.49The biggest beneficiary of Labor’s funding is the gas company Tamboran Resources, who would go on to become Ms Ivanovoski’s client.

1.50While the Australian Greens acknowledge this is circumstantial evidence that was unable to be tested by the Committee due to the witnesses’ inability to appear, on its face these facts indicate that Ms Ivanovski was in a position to influence this funding announcement while running the Labor Party’s targeted election campaign for the benefit of a company that would soon become a client of her lobbying firm.

1.51Brookline has since secured a $940 million investment from the Government for their client PsiQuantum to build a quantum computing facility in Brisbane.[35]

1.52The Greens agree with submitters’ calls for greater transparency about the development and its funding. At this stage, the commercial viability of specific key proponents is in doubt, and it is unclear how much additional funding the Commonwealth will be expected to provide and how it will make a return on its investment.

1.53That the proposed Middle Arm Industrial Precinct and its $1.5 billion federal subsidy be redirected to support clean technology industries, and:

a)Fossil fuel based industries including gas and petrochemicals are not directly or indirectly funded;

b)Free, prior and informed consent is obtained from Larrakia people;

c)A health impact assessment is undertaken and published by the Australian Government and incorporated into decision-making. This must use robust methodologies approved by a panel of independent public health experts and include consideration of health risks from climate change;

d)Development scenarios used for strategic environmental assessments are publicly disclosed, and methodologies incorporated into the EIS are peer-reviewed and open for public comment; and

e)The Australian and NT governments disclose all economic and climate modelling conducted on the precinct, including those by EY, Deloitte and the CSIRO.

1.54That the ‘economic resilience stream’ in the Future Made in Australia framework be prohibited from subsidising fossil fuel industries or petrochemical production.

1.55That the Federal Environment Minister urgently use her powers under the water trigger to call in Tamboran Resources and Empire Energy’s proposed Beetaloo fracking wells for assessment under the EPBC Act.

1.56That the NT and Australian governments fund independent baseline research and ongoing environmental monitoring of species and ecosystems in the Northern Territory to ensure availability of adequate data to protect species and ecosystems into the future.

1.57That the NT Government and NT EPA impose stricter air pollution conditions on all fossil fuel facilities, including mandatory monitoring of volatile organic compounds and clear consequences for breach of licences.

1.58That the NT Government revise the role of the NT EPA to create a strong, independent regulator with a clear mandate to enforce strict conditions, investigate infringements and facilitate pathways for community members to raise concerns about potential breaches.

Footnotes

[1]David Crowe, 'Labor backs $1.5 billion plan for Darwin port in contest over NT seats', Sydney Morning Herald, 12 April 2022.

[2]Australian Academy of Science,The Risks to Australia of a 3°C Warmer World, March 2021.

[3]Mr Marcos Orellana, End of Mission Statement by the UN Special Rapporteur on Toxics and Human Rights, Marcos A. Orellana, on his visit to Australia, 28 August to 8 September 2023, 8 September 2023, p. 8.

[4]Fiona Harvey, 'No new oil, gas or coal development if world is to reach net zero by 2050, says world energy body', The Guardian, 18 May 2021.

[5]See for example: ECNT, Submission 198, pp. 8 and 14; Mr Thomas Houlie, Climate and Energy Policy Analyst, Climate Analytics, Proof Committee Hansard, 17 June 2024, p. 40; NT DIPL, Stage 2 Submission, p. 9.

[6]The Hon Anthony Albanese MP, Prime Minister of Australia, Radio interview – ABC Canberra Breakfast, 10 May 2024.

[7]Tamboran Resources, ASX Announcement - Tamboran announces intention to re-domicile to the United States, 12 October 2023.

[8]Tamboran Resources, ASX Announcement - Tamboran secures land at Middle Arm Sustainable Development Precinct for proposed NT LNG Development, 9 June 2023.

[9]Jane Bardon, ‘How the Beetaloo gas field could jeopardise Australia's emissions target’, ABC News, 29 February 2020.

[10]433Mt in December 2023: DCCEEW, Quarterly Update of Australia’s National Greenhouse Gas Inventory, December 2023.

[11]Mr Grant Wilson, Executive Chair, Tivan, Proof Committee Hansard, 17 June 2024, p. 37.

[12]Samantha Dick, Daniel Fitzgerald, Thomas Morgan, 'NT government signs deal with Tamboran Resources to buy Beetaloo Basin gas', ABC News, 23 April 2024.

[13]Phoebe Shields, 'Empire Energy secures 10-year gas sales agreement with NT government to supply 25 TJ per day', Proactive, 25 July 2024.

[14]Department of Industry, Science and Resources, Future Gas Strategy Analytical Report, 9 May 2024, p. 88.

[15]See for example: Institute for Energy Economics and Financial Analysis (IEEFA), Opening Statement, tabled 17 June 2024, p. 1; IEEFA, Submission 45, p. 3; and Mr Joshua Runciman, Lead Analyst, Australian Gas, IEEFA, Proof Committee Hansard, 17 June 2024, pp. 42 and 48.

[16]Jane Bardon, ‘New NT gas projects could raise emissions up to 150 per cent, newly-obtained report reveals’, ABC News, 13 August 2024.

[17]Georgia Hitch and Sara Everingham, ‘Fracking set to resume in the Northern Territory as moratorium lifted’ ABC News, 17 April 2018.

[18]Dr David Ritchie, Independent Oversight Hydraulic Fracturing Implementation, 10 March 2023, p. 9.

[19]Dr David Ritchie, Independent Oversight Hydraulic Fracturing Implementation, 10 March 2023, p. 10.

[20]The Hon Chris Bowen MP,Minister for Climate Change and Energy, Press conference with Minister for Climate Change and Energy Chris Bowen - Alice Springs, 18 May 2023.

[21]Australian Marine Sciences Association, answer to question on notice, 18 June 2024 (received 5 August 2024).

[22]Proof Committee Hansard, 11 April 2024, pp. 62–68.

[23]See for example: ECNT, Submission 198, p. 29; Associate Professor Karen Edyvane, Australian Marine Sciences Association, Proof Committee Hansard, 18 June 2024, p. 12.

[24]The Hon Eva Lawler, Chief Minister, NT Government, Proof Committee Hansard, 11 April 2024, p. 9.

[25]See for example: Dr Paul Vogel, Chairperson, NT EPA, Proof Committee Hansard, 17 June 2024, pp. 11–12; NT EPA, answers to questions on notice, 17 June 2024 (received 5 July 2024).

[26]World Health Organisation,Exposure To Benzene: A Major Public Health Concern, 2019, p. 2.

[27]INPEX Corporation, Financial Results for the year ended December 31, 2023, p. 5. The financial results state that INPEX ‘realised a net income of 302.6 billion Japanese Yen’.

[28]Felicity James ‘INPEX signs deal to pay Darwin Aboriginal group $24 million over decades for education, jobs fund’ ABC News, 16 November 2018 (accessed 31 July 2024).

[29]The Hon Eva Lawler, Chief Minister of the Northern Territory, Powering the Territory’s future for years to come, 23 April 2024.

[30]Christopher Walsh, ‘‘Alarming and outrageous’: Chief Minister’s office defends political adviser’s gas lobby role’, NT Independent, 7 December 2023.

[31]Disgraced Bligh spin doctor Lidija Ivanovski lands job in NT, The Courier Mail, 19 February 2010.

[32]Jane Cadzow, ‘‘They’re driving me insane’: The 24/7 life of a political chief of staff’, Sydney Morning Herald, 15 July 2023.

[33]www.linkedin.com/in/lidija-ivanovski/details/experience/

[34]David Crowe, ‘Federal election 2022: Labor backs $1.5 billion plan for Darwin port in contest over NT seats’, Sydney Morning Herald, 12 April 2022.

[35]Justin Hendry, 'National quantum advisory body not consulted on $1bn deal', Innovation Aus, 3 May 2024.