A Senate inquiry into the gas-rich Beetaloo Basin is being held in Darwin today. Here’s what that means

Over 500 million years ago, long before dinosaurs roamed the Earth, a unique formation began to develop in what is now the Northern Territory.

Over time, layers of ancient mudstone and sandstone have created the Beetaloo Basin, a giant underground source of shale gas that can be used to generate electricity.

Today a public hearing will be held in Darwin as part of a Senate inquiry into the basin, which covers around 28,000 square kilometers southeast of Katherine.

It primarily examines the Australian government’s decision to hand out $50 million in grants to oil and gas companies seeking to explore the gas-rich Beetaloo.

What are the grants for?

The federal government views the natural gas buried deep in the basin as a reliable energy source that is arguably cleaner to burn than coal or oil.

The gas could be used domestically for heating, cooking and manufacturing, and it could also be exported overseas.

To accelerate Australia’s “gas-led recovery” from COVID-19, the federal government created the multi-million dollar grant program to stimulate private investment in gas development projects.

Federal Resources Minister Keith Pitt said gas production in the Beetaloo Basin could create more than 6,000 jobs in the region and help boost Australia’s energy and economic security.

Mr. Pitt has already offered several grants to gas companies wishing to explore the basin.(ABC News: Hamish Harty)

What is the problem?

Unlike conventional gas reservoirs, which migrate closer to the Earth’s surface, shale gas is trapped inside tiny cracks in a rock.

To extract it, gas companies must perform hydraulic fracturing, known as fracking, a controversial well stimulation technique that produces large amounts of potentially toxic wastewater.

Large green wellhead protruding from the ground, surrounded by a chain-link fence topped with barbed wire
Fracking remains an ongoing problem in the NT.(Provided: Brendan Egan)

Fracking also releases large amounts of methane, a potent greenhouse gas that accelerates the warming effects of climate change.

Environmental groups have argued that any benefits from fracking and shale gas production will be outweighed by the resulting pollution and increased carbon emissions.

They object to the federal government giving taxpayers’ money in the form of subsidies to the fossil fuel industry.

Mining companies, however, said these risks can be managed safely by using advanced engineering techniques and complying with strict environmental regulations.

The companies also said they were engaging with traditional owners and would monitor environmental risks.

Has the fracking started?

Yes, it is – for exploration, but not yet for gas production.

In 2018, the Northern Territory government lifted a temporary ban on fracking following a 15-month investigation by Judge Rachel Pepper.

Known as the Pepper Inquiry, its final report made 135 recommendations to mitigate the risks associated with any onshore shale gas development in the Northern Territories.

All have been accepted in full by the NT government.

So far, the NT government says it has introduced 47% of the recommendations and has started work on all the others.

But there is one commitment that could have global implications if not met before fracking begins: Recommendation 9.8.

It states that:

“The Governments of the Northern Territories and Australia must seek to ensure that there is no net increase in life-cycle greenhouse gas emissions in Australia from any land shale produced in the Northern Territories”.

To meet this obligation, both governments must find a way to fully offset all life cycle carbon emissions produced by hydraulic fracturing.

Neither government has done so yet.

The key players

At least nine gas companies have expressed interest in exploring the region for natural gas, with several test drilling operations already underway.

They understand:

  • Armor Energy
  • Empire Energy Group
  • Falcon Oil and Gas Australia
  • Hancock Prospecting
  • INPEX Oil and Gas Australia
  • original energy
  • Santos
  • Tamboran Resources
  • The Energy and Minerals Group

These companies will be represented in the investigation by the Australian Petroleum Production and Exploration Association (APPEA).

The inquiry will also hear from environmental groups and local traditional owners, who want the federal and Northern Territory governments to invest taxpayers’ money in renewable energy instead.

Anti-fracking groups include the Environment Center NT, Lock the Gate Alliance, GetUp, Nurrdalinji Native Title Aboriginal Corporation, Beyond Zero Emissions and the Environmental Defenders Office.

Other stakeholders opposed to fracking the Beetaloo include cattle ranchers who have said their lands will be affected by gas production activities.

The 11-person committee overseeing the inquiry has a Labor majority and will be chaired today by WA Greens Senator Dorinda Cox.

The final report is due April 21.

An aerial view of an exploration well in the Northern Territory's Beetaloo Basin on a patch of cleared land surrounded by bushes
Empire Energy has started exploratory drilling in the basin near Borroloola.(Provided: Empire Energy)

Norman D. Briggs