Fracking in NT would increase gas emissions at no economic benefit, trial told

Plans to frack for natural gas in a tract of land in the Northern Territory would increase Australia’s greenhouse gas emissions by 13 per cent but fail to generate any economic benefit, a trial has heard.

The Morrison government plans to open up the Beetaloo Sub-basin – about 500 kilometres south-east of Darwin, between Katherine and Tennant Creek – to shale gas exploration. It has awarded $21 million in grants to Imperial Oil and Energy to explore through three drilling wells. The NT government has also approved plans for gas projects in the area.

The gas mining project in the Beetaloo Sub-basin in the Northern Territory.

As the leaders of world’s largest economies focused on climate talks in Glasgow, a trial began in Sydney’s Federal Court, where environmental groups challenged the Beetaloo project and the validity of decisions made by federal Resources and Water Minister Keith Pitt supporting exploratory drilling. The environment groups hope the court will rule to prevent the drilling projects.

The groups, headed by the Environment Centre NT, said fracking in the Beetaloo would emit greenhouse gases and undermine Australia’s obligations to comply with the Paris Agreement.

The federal government has said the Beetaloo project had the potential to create 6000 jobs and generate billions of dollars of economic activity.

But barrister Perry Herzfeld, SC, for the Environment Centre NT, told the court Mr Pitt’s decisions to award grants to Imperial did not comply with his obligations to give reasonable consideration to risks under the Public Governance, Performance and Accountability Act.

“There is no suggestion that in any of the material considered by the minister, inquiries were made into climate-change risks,” Mr Herzfeld told Justice John Griffiths, after lawyers for both sides tendered their evidence through affidavits.

Mr Herzfeld said under the legislation, Mr Pitt could award grants to the project once he had made reasonable inquiries that it was an “efficient, effective, economical and ethical” use of public money. He said the minister could have sought those answers from officials in his own department.

A report by Associate Professor Hugh Saddler, an expert in energy and environmental policy, found the combustion of gas from the Beetaloo shale reserve “would equate to a 13 per cent increase on Australia’s 2020 gas emissions”, Mr Herzfeld said.

Another report, by economist Nicki Hutley, also rebutted an analysis of the Beetaloo project by consultancy firm Deloitte.

Minister for Resources and Water Keith Pitt.Credit:Alex Ellinghausen

Deloitte’s report didn’t consider the risks to the climate, Mr Herzfeld said, and so Ms Hutley’s report found the project would result in a net economic loss if it went ahead.

The federal government argues exploratory drilling would not in itself increase Australia’s global emissions, and that the initial drilling would not guarantee further development. It also argues Mr Pitt’s decisions were lawful, and that companies awarded grants have to meet eligibility requirements.

Tom Howe, QC, for Mr Pitt and the Commonwealth, told the court on Tuesday that Justice Griffiths likely faced a decision on how to interpret the Act in regard to the minister’s considerations before he awarded the grants.

The trial will continue on Wednesday, when lawyers for the government and Imperial Oil and Gas make further submissions. Justice Griffiths is expected to reserve his ruling.

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