Chief says yes to frack­ing

His­toric de­ci­sion en­sures cash flow but angers some

NT News - - NEWS - HAY­LEY SORENSEN hay­ley.sorensen@news.com.au

FRACK­ING roy­al­ties are ex­pected to be­gin to flow into the North­ern Ter­ri­tory’s de­pleted cof­fers within five years.

Un­der enor­mous eco­nomic pres­sure, the North­ern Ter­ri­tory Gov­ern­ment yes­ter­day an­nounced its long-awaited de­ci­sion to lift its 18-month frack­ing mora­to­rium.

With the ban gone, ex­plo­ration for on­shore shale gas is ex­pected to restart next dry sea­son.

It won’t be open slather – about 49 per cent of the Ter­ri­tory’s land­mass in­clud­ing ar­eas of en­vi­ron­men­tal and cul­tural sig­nif­i­cance will be marked as “no-go zones” of­flim­its for ex­plo­ration.

Be­fore new ex­plo­ration per­mits are granted, the Gov­ern­ment will have to put in place 35 rec­om­men­da­tions, work on which is ex­pected to take un­til the year’s end to com­plete.

A roy­al­ties model to de­ter­mine how money will flow to com­mu­ni­ties is yet to be de­cided. At the mo­ment, roy­al­ties are paid to the Gov­ern­ment at a rate of 10 per cent of the value at the well­head at pro­duc­tion.

The Gov­ern­ment has set it­self a dead­line of July to come up with a cost re­cov­ery model and fi­nal de­ci­sions on its “nogo zones”, make changes to the En­vi­ron­men­tal Pro­tec­tion Act, and ini­ti­ate codes of prac­tice for well in­tegrity and decom­mis­sion­ing.

It will take much longer for full-scale gas pro­duc­tion to be­gin. Be­fore pro­duc­tion ap­provals are granted, strate­gic re­gional en­vi­ron­men­tal and base­line as­sess­ments must be con­ducted. Those as­sess­ments are ex­pected to take about three years to com­plete.

And they won’t come

cheap. Chief Min­is­ter Michael Gun­ner es­ti­mated yes­ter­day the cost of con­duct­ing the as­sess­ments would be be­tween $20 mil­lion and $40 mil­lion.

That cost won’t be borne solely by the NT – North­ern Aus­tralia Min­is­ter Matt Cana­van yes­ter­day said the Com­mon­wealth would be will­ing to help through the Gas In­dus­try So­cial and En­vi­ron­men­tal Re­search Al­liance pro­gram.

Pre­vi­ously, the Com­mon­wealth had in­di­cated only $2 mil­lion of a $30 mil­lion kitty would be avail­able to the NT.

The Fed­eral Gov­ern­ment has held a gun to the head of the Ter­ri­tory since the Gun­ner Gov­ern­ment put its frack­ing mora­to­rium in place in Septem­ber 2016. But with the ban lifted, the stand­off is over.

Trea­surer Scott Mor­ri­son chose yes­ter­day to an­nounce his will­ing­ness to work with the Ter­ri­tory to plug the hole blown through its bud­get by changes to GST rel­a­tiv­i­ties.

The Ter­ri­tory will lose out on $136 mil­lion in GST rev­enue next fi­nan­cial year and the short­fall is ex­pected to worsen. But hours af­ter Mr Gun­ner lifted the mora­to­rium, a spokes­woman for Mr Mor­ri­son said he and NT Trea­surer Ni­cole Mani­son were work­ing “in good faith to ad­dress the neg­a­tive im­pacts of the NT’s GST re­duc­tion”.

Mr Gun­ner said the de­ci­sion to frack was not in­flu­enced by pres­sure from the Fed­eral Gov­ern­ment.

“I un­der­stand the Aus­tralian Gov­ern­ment has made com­men­tary over the last 18 months but for me this deci- sion was al­ways go­ing to come down to this fi­nal re­port,” he said. “Those ex­ter­nal is­sues … were not part of my de­ci­sion­mak­ing.”

Prime Min­is­ter Mal­colm Turn­bull said the de­ci­sion made for a “great day for Ter­ri­to­ri­ans” and would lead to thou­sands of new jobs.

In lift­ing the ban, the Gov­ern­ment en­dorsed all 135 of the rec­om­men­da­tions made by the sci­en­tific in­quiry into hy­draulic frac­tur­ing, led by Jus­tice Rachel Pep­per.

The Gov­ern­ment has al­lo­cated $5.33 mil­lion over three years to put the rec­om­men­da­tions in place. Much of that money will be spent on ex­tra pub­lic ser­vants, in­clud­ing $1.8 mil­lion for an “im­ple­men­ta­tion team” to sit un­der the Depart­ment of Chief Min­is­ter and $220,000 a year for two ex­tra EPA board mem­bers.

A “prom­i­nent in­di­vid­ual” will be ap­pointed to over­see the im­ple­men­ta­tion process in­de­pen­dently of gov­ern­ment. Mr Gun­ner said he hoped that prom­i­nent in­di­vid­ual would be one of the 12 mem­bers of the frack­ing in­quiry panel.

One of the re­port’s key rec- om­men­da­tions was to sep­a­rate the re­spon­si­bil­i­ties for the pro­mo­tion and reg­u­la­tion of the gas in­dus­try to avoid po­ten­tial con­flicts of in­ter­est. At the mo­ment, both are the re­spon­si­bil­ity of the Depart­ment of Pri­mary In­dus­tries and Re­sources.

The re­port pre­sented two op­tions – for en­vi­ron­men­tal reg­u­la­tion to be taken over by the En­vi­ron­ment Depart­ment with op­er­a­tional ap­provals to re­main with DPIR; or for the cre­ation of an en­tirely new in­de­pen­dent agency to take over all as­pects of reg­u­la­tion.

The NT Gov­ern­ment has cho­sen the eas­ier first op­tion. While the power to ap­prove or re­ject en­vi­ron­men­tal man­age­ment plans will rest with En­vi­ron­ment Min­is­ter Lau­ren Moss, those plans will first be as­sessed by DPIR ex­perts who will present the plans to the EPA. Mr Gun­ner re­jected sug­ges­tions DPIR in­volve­ment could po­ten­tially con­tam­i­nate the process.

“EPA is in­de­pen­dent, re­mem­ber. If they’re not happy with the in­for­ma­tion they are re­ceiv­ing, that’s some­thing they can act on,” he said.

Whether it makes me po­lit­i­cally vul­ner­a­ble or not, that can be some­one else’s assess­ment Michael Gun­ner, Chief Min­is­ter

This is a great day for Ter­ri­to­ri­ans and in­deed all Aus­tralians Mal­colm Turn­bull, Prime Min­is­ter

(The mora­to­rium) was one of the worse po­lit­i­cal stunts foisted on any ju­ris­dic­tion in Aus­tralia Nigel Scullion, NT Se­na­tor

It is hard to get ge­ol­o­gists ex­cited. I have a lot of ge­ol­o­gists in my depart­ment and they are ex­cited about the gas re­sources in the North­ern Ter­ri­tory Matt Cana­van, North­ern Aus­tralia Min­is­ter

Pic­ture: JUSTIN KENNEDY

Chief Min­is­ter Michael Gun­ner at Par­lia­ment House yes­ter­day, an­nounc­ing the frack­ing ban will be lifted

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