Fracking: NT Government subsidy for onshore gas worth $94 million over decade, Australia Institute finds

THE NT Government could hire about 100 extra nurses or teachers a year using the money that goes to subsidising the onshore oil and gas industry, a new report has found

THE NT Government could hire about 100 extra nurses or teachers a year using the money that goes to subsidising the onshore oil and gas industry, a new report has found.

A report by progressive think tank Australia Institute, with funding from environmental group Frack Free NT, found $94 million of taxpayer money had been spent subsiding the onshore oil and gas industry in the Territory over the last decade.

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A chunk of that comes from the “cost of administering” applications, fees and titles of the industry at an estimated $2.7 million a year, while the industry pays fees of less than $500,000.

A spokesman for Primary Industry and Resources Minister Paul Kirby, arguing the industry was still in its infancy in the NT, said a full cost recovery system for the regulation of the onshore shale gas industry, as recommended by the Pepper report, was on track to be in place by 2021.

Kyalla 117, 600km south-east of Darwin, between Daly Waters and Elliott, is the first of two new Origin Energy appraisal wells to be drilled and fracture stimulated to help determine the potential of the resource in the Beetaloo Basin. Picture: Supplied

Gas royalties raked in $445.6 million for the NT’s economy in 2018/19, almost exclusively from offshore gas.

“The onshore petroleum industry is still largely an emerging industry in the NT with only one company producing onshore gas in the Territory – Central Petroleum near Alice Springs,” the spokesman said.

“Further exploration is needed to quantify the Territory’s resources, particularly in the Beetaloo Sub-Basin.”

Rod Campbell, Research Director at The Australia Institute

The NT Government lifted its three-year moratorium on exploration fracking for onshore shale gas in the Beetaloo Basin in June last year.

Best case scenario modelling commission for the NT’s Hydraulic Fracturing Inquiry — better known as the Pepper report — found fracking the Beetaloo Basin could result in $3.72 billion in revenue to the NT Government over a 25 year development period, including 13,611 direct and indirect jobs.

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The possibility of this happening was classed “low” in ACIL Allen’s modelling. The more likely scenario according to the study was $12.2 million in revenue to the NT Government over 25 years.

Australia Institute economist and research director Rod Campbell said the cost of subsidising the onshore gas industry was “significant” at a time the NT Government was facing budget pressures.

“These costs make it harder for the NT Government to fund schools and hospitals. This money could have paid the salaries of around 100 nurses or teachers,” he said.

“Territory taxpayers pay far more to the onshore oil and gas industry than they receive from it.”