NT fracking report

NT fracking inquiry: Economic benefit uncertain, Australia Institute think tank warns
By Georgia Hitch
Posted yesterday at 4:48pm

PHOTO: Jemena is currently constructing the Northern Gas Pipeline that will link Tennant Creek with Mount Isa in north-west Queensland. (Supplied: Jemena)
RELATED STORY: NT fracking report predicts 500 jobs if industry flourishes

A new economic assessment of the impact hydraulic fracking would have on the Northern Territory shows the financial benefit does not warrant a lifting of the current moratorium, a Canberra-based think tank says.
A report released by economic consulting firm ACIL Allen late on Friday evening looked at what effect allowing fracking in the NT would have on employment numbers and revenue — for both the Government and private companies.
Different fracking scenarios put forward in report:
'Calm': Exploration and appraisal carried out, but commercial quality shale gas reserve is not found.
'Breeze': 103 wells drilled, 82 new jobs and $757 million in revenue to the NT Government.
'Wind': 267 wells drilled, 252 new jobs and $2.1 billion in revenue to the NT Government.
'Gale': 670 wells drilled, 524 new jobs and $5.8 billion in revenue to the NT Government.
*Note* Scenarios are based over a 25-year period
Source: ACIL Allen report
Research Director at the Australia Institute think tank, Rod Campbell, said the assessment showed even in the best-case scenario the economic development for the NT was not outstanding.
"It points out... that an unconventional gas industry in the Northern Territory is very uncertain and likely to be quite small," he said.
"Economically this is a small marginal potential benefit for potentially significant costs."
Mr Campbell said while the headline figures appeared large, they needed to be considered at an annual level.
"What the Territory Government gets is between $29 [million] and $143 million a year. That's got to be seen in the context of the $6 billion a year Territory budget," he said.
Table that shows the prospect of shale development occurring under different possible scenarios
PHOTO: This table from the report shows that even if restrictions are fully lifted, the chances of the top production target being reached is low. (Supplied: ACIL Allen Consulting)
"Let's put that in context of your average Territory household … your average Territory household has an average income of about $100,000 a year.
"If a gas company came along and said can we dig up your backyard and frack in your backyard, and mess around with your potential drinking water supply, for $1,000 a year, would you do it?
"I don't know, maybe you would, but you'd really weigh up those risks of what if my drinking water goes bad versus that 1 per cent change in my income."
Mr Campbell said the assessment's note of "more than usual uncertainty" around a potential NT industry also needed to be carefully considered by the scientific inquiry.
"We don't know how much gas there is, we don't know how easy or how expensive it is to get to, we don't know what price we might get for it," he said.
"And crucially for every industry in the NT, it's likely to be very expensive to get to market."
Assessment is "conservative", industry group says
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VIDEO: Which way is the NT going to go on fracking? (ABC News)
The Australian Petroleum Production and Exploration Association (APPEA) described the assessment as "conservative" but said it did highlight potential for "significant" growth for the NT's economy.
"We think the actual reality will be significantly greater than that," director of the NT branch of APPEA Matthew Doman said.
"But nonetheless they're very significant job numbers, it'd be a very significant economic boost to the Territory."
Mr Doman said the report also reflected the small geographical footprint fracking would have on the NT.
In the Gale scenario, fracking would occupy 475.9 square kilometres of land out of the Territory's 1,421,000 square kilometres.
Opponents of fracking used assessment to argue any potential boost to the Territory's economy would not outweigh environmental and community concerns.
"The report makes it really clear that fracking is no saviour for the Territory's economy," said Naomi Hogan from the lobby group Lock the Gate Alliance.
"We're not going to see a big increase in jobs... even if we were going to go full pelt with their best-case scenario for fracking wells.
"I think this report asks more questions than it answers but certainly makes clear that [fracking] will not be a jobs or economic saviour for the Territory."