End of fracking ban ‘to lower power bills’


The Vic­to­rian and NSW gov­ern­ments are hold­ing out against de­vel­op­ing their states’ size­able gas re­serves, de­spite the North­ern Ter­ri­tory yes­ter­day declar­ing it would open up more than half of its land for fracking to boost jobs and put down­ward pres­sure on power bills.

The Gun­ner gov­ern­ment’s de­ci­sion to lift its two-year blan­ket mora­to­rium on fracking, fol­low­ing a $5.1 mil­lion, 15-month sci­en­tific in­quiry, was en­dorsed by Mal­colm Turn­bull, who said it was a “great day for Ter­ri­to­ri­ans” and would open the “door to new op­por­tu­ni­ties, cre­at­ing thou­sands of jobs”.

Indige­nous Af­fairs Min­is­ter Nigel Scul­lion, who rep­re­sents the North­ern Ter­ri­tory in the Sen­ate, said the orig­i­nal de­ci­sion to stop fracking was “one of the worst po­lit­i­cal stunts foisted on any ju­ris­dic­tion” and that only now could the Ter­ri­tory’s “dead flat” econ­omy get mov­ing.

“We’re pro­vid­ing op­por­tu­ni­ties to ac­tu­ally get a fund­ing stream for the first time so that Ter­ri­to­ri­ans don’t have to live in a men­di­cant state,” Se­na­tor Scul­lion said.

“It’s cost us a lot, but we’re there in the end. We just need to get on with busi­ness.”

Vic­to­rian La­bor Re­sources Min­is­ter Tim Pal­las said yes­ter­day his state’s mora­to­rium on on­shore gas ex­plo­ration would re­main. He ar­gued that any change would present too great a risk to agri­cul­ture, set­ting up a show­down with the Turn­bull gov­ern­ment. The NSW Lib­eral gov­ern­ment also stood by its oner­ous reg­u­la­tory regime, which has all but ban­ished gas de­vel­op­ment in the state.

The Gun­ner gov­ern­ment’s de­ci­sion means ex­plo­ration could oc­cur across as much as half of the Ter­ri­tory from the start of next year’s dry sea­son. The re­main­ing 49 per cent of land, in­clud­ing towns and con­ser­va­tion ar­eas, will be per­ma­nently off-lim­its.

Fed­eral En­ergy Min­is­ter Josh

Fry­den­berg said de­vel­op­ment of new gas re­sources in the Ter­ri­tory could al­le­vi­ate some of the pres­sure on the east-coast gas mar­ket, help­ing to push down prices.

“With gas play­ing an in­creas­ingly im­por­tant role in set­ting the price of elec­tric­ity, the de­vel­op­ment of the North­ern Ter­ri­tory’s gas re­sources could not come soon enough,” Mr Fry­den­berg said.

Mr Pal­las said the An­drews gov­ern­ment had banned fracking and coal-seam gas ac­tiv­i­ties be­cause “we won’t risk our vi­tal agri­cul­tural sec­tor”.

“The com­mu­nity is with us — and that isn’t chang­ing,” he said.

The Vic­to­rian gov­ern­ment has com­mit­ted $42.5m to a study by the state’s lead sci­en­tist, Amanda Caples, into pos­si­ble gas re­serves through­out the state’s south­east, which will de­liver find­ings later this year.

The first re­port from the study, handed down in Jan­uary, iden­ti­fied 13 un­der­ground fields suit­able for gas stor­age, and at least seven months’ gas sup­ply — or 110 peta­joules — in a sin­gle area around the Ot­ways re­gion which was deemed the most likely for con­ven­tional de­vel­op­ment.

Vic­to­ria leg­is­lated in March last year to ban fracking and all on­shore un­con­ven­tional gas ex­plo­ration and de­vel­op­ment per­ma­nently. It also strength­ened the mora­to­rium on com­mer­cial ex­plo­ration and de­vel­op­ment of con­ven­tional gas, which is due to last un­til the end of June 2020.

Min­is­ter for Re­sources and North­ern Aus­tralia Matt Cana­van said fracking was “ab­so­lutely safe” and cited a decade’s worth of ex­pert opin­ion. He also ac­cused the An­drews gov­ern­ment of “turn­ing its back” on its nat­u­ral re­sources.

“This is not just about re­source jobs; it’s not just about jobs on a drilling rig; it’s also about jobs in man­u­fac­tur­ing fa­cil­i­ties as well,” Se­na­tor Cana­van said.

At least $200m worth of po­ten­tial in­vest­ment was lost or de­layed while the NT mora­to­rium was in place, ac­cord­ing to in­dus­try es­ti­mates. North­ern Ter­ri­tory Chief Min­is­ter Michael Gun­ner said he had no re­grets even though his gov­ern­ment faced widen­ing deficits and a strug­gling econ­omy.

“I be­lieve that the process we went through was cru­cial to be­ing able to make an in­formed de­ci­sion that means that we can have in­dus­tries co-ex­ist safely in the North­ern Ter­ri­tory with­out putting at risk those jobs,” he said.

Mr Gun­ner blamed the pre­vi­ous Coun­try Lib­eral Party gov­ern­ment for putting in­ad­e­quate reg­u­la­tions into prac­tice. “If we had done it un­der the CLP’s regime, we would have been ac­cept­ing an un­ac­cept­able level of risk for Ter­ri­to­ri­ans,” he said.

In­dus­try wel­comed the an­nounce­ment. Ori­gin ex­ec­u­tive Mark Schu­bert said well test­ing com­pleted be­fore the mora­to­rium in­di­cated “a very promis­ing, ma­te­rial gas re­source in the Bee­taloo sub-basin”, about 500km south­east of Dar­win.

Ori­gin has ini­tial plans to drill and frank a fur­ther five wells. Mr Schu­bert said the com­pany planned to re­sume work “as soon as prac­ti­cal”.

Je­mena, an en­ergy com­pany build­ing a pipe­line be­tween Ten­nant Creek and Mt Isa that will be ca­pa­ble of trans­port­ing Ter­ri­tory gas to the east coast, said it could look at ex­pand­ing the $800m project. Je­mena man­ag­ing di­rec­tor Paul Adams said the Ter­ri­tory had “great po­ten­tial as the fu­ture heart­land” of Aus­tralia’s gas in­dus­try.

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