Billions in royalty revenues, thousands of jobs as Beetaloo kicks into gear

Seven years on, the ACIL Allen economic analysis into the Beetaloo Basin still makes compelling reading. Recap what it said.

In the dry economist-speak that weaves through its October 2017 NT fracking industry review, ACIL Allen noted if various development scenarios were fulfilled, “the shale gas industry could have an overall net positive impact on the future growth of the Northern Territory economy”.

An appendix to Justice Rachel Pepper’s fracking inquiry and sometimes laughable in its blandness, the 230-plus page report nonetheless contained the economic dynamite that blasted a centre-left Labor government to defy critics from within its own base and support expansion of an onshore Territory gas industry.

The report modelled scenarios that showed potentially billions of dollars in total revenues and tens-of-thousands of jobs throughout the life of the project.

ACIL Allen’s forecast assumptions spanned from 2018 to 2043, making them inherently out of date because not a molecule of gas has yet been produced seven years since its release - but the numbers behind the report make compelling reading.

Justice Rachel Pepper, who authored an independent scientific Inquiry into hydraulic fracturing in the Northern Territory.

ACIL Allen workshopped potential production scenarios resulting from an onshore shale gas industry in the Northern Territory.

Scenario one, Breeze, modelled revenue from 100TJ (terrajoules) of shale gas production per day, scenario two, Wind, modelled 400TJ a day and scenario three Gale modelled 1000TJ production a day - equivalent to one-billion cubic feet of gas per day

Under the Breeze production scenario, onshore gas was forecast to generate $937.2 million to the NT over the modelling period, Wind would generate $2.8 billion and Gale would generate $5.8 billion.

Annualised, this equates to between $36 million, $108.4 million and $222.2 million per year into the NT economy.

“This equates to a net real income per capita modelling period, which is mostly caused by increased Northern Territory Government revenue,” the report said.

“The rest of Australia also sees a lift in real income of between $3.4 billion (Breeze), $9.1 billion (Wind) and $12.5 billion (Gale) over the modelling period, on account of the flow on impact of lower gas prices across the economy and the increase in Commonwealth taxes associated with the development.”

But what’s energising the NT Government and investors is that the Breeze, Wind and Gale scenarios appear to fall well short of the actual production potential.

At a recent visit to Beetaloo Energy Australia’s Carpentaria site, somebody joked ACIL Allen should have also modelled a Cyclone scenario.

Work is underway at Beetaloo Energy Australia’s Carpentairia site. Picture: Stephanie Hanlon

The current projections, which go back to 2018, were based on Beetaloo delivering 1000TJ or one-billion cubic feet of gas a day.

Meanwhile, Tamboran Resources is forecasting extracting four-billion cubic feet a day at its Shenandoah South field in the western Beetaloo by 2030 in addition to Beetaloo Energy Australia’s one-billion cubic feet a day.

Then there’s the players who entered the mix late.

In May, Santos chief executive Kevin Gallagher announced the company would invest $200 million in exploration at the Beetaloo next year and Texan-player Bryan Sheffield, already a partner with Tamboran and Beetaloo Energy Australia, has also committed tens-of-millions of dollars investment with his company Daly Waters Energy.

While ACIL Allen’s revenue projections have been understated, its jobs forecasts point to decades of employment for Territorians if the Beetaloo projects reach production.

Under Wind’s 400TJ extraction model about 6600 jobs would be created in total, with an average 252 workers on site each day.

Under Gale’s 1000TJ a day extraction model, there would be 13,611 jobs created, with about 520 workers at the Beetaloo each day.

NT Mining Minister Gerard Maley said by 2030 the Beetaloo could be producing 4000TJ of gas per day, enough to power Australia for at least 200 years.

“An abundance of low carbon gas at the Beetaloo can make the Beetaloo and the Northern Territory the powerhouse of australia’s energy solutions for decades to come,” he said.

“More than $170m invested into onshore gas exploration and production at the Beetaloo so far over the past 10 years. The momentum has never been greater and it is now attracting world leading shale gas expertise to the Territory.”

Originally published as Billions in royalty revenues, thousands of jobs as Beetaloo kicks into gear