15 Jan 2023
Opinion Article: David Slama writes in The Sunday Territorian about the year ahead for NT gas
The plan to develop the Northern Territory’s Beetaloo Basin into one of Australia’s great resources regions has started its most exciting year to date.
In coming months, gas companies will start applying for production licences to develop onshore gas projects in the Beetaloo, a 28,000-square kilometre area south east of Katherine.
With an estimated 180,000 petajoules of gas – more than 1000 times Australia’s current annual domestic consumption – the Basin is one of the world’s largest known opportunities to develop onshore gas reserves.
This is an important step and comes amid strong progress by the Northern Territory Government to finalise the recommendations of the 2018 Pepper Inquiry, which found that hydraulic fracturing can be done safely with any potential risks managed.
Last month, the NT Parliament passed new legislation that completes another 13 of the inquiry’s 135 recommendations, advancing efforts to unlock gas in the Beetaloo in an environmentally safe way and in consultation with stakeholders.
The moves highlight the government’s ongoing commitment to growing the Territory’s gas industry, which already employs around 11,000 Territorians along the supply chain and enables $19 billion of economic activity annually.
As highlighted by Deputy Chief Minister Nicole Manison’s recent comments about the critical role of gas supporting renewables, the government understands the fundamental challenges and opportunities of the energy transition, as recognised by national and international energy authorities.
There is a strong appreciation of the huge economic and energy security benefits of the gas industry and its long-term role in delivering a cleaner energy future.
This is shown in three key areas as we move forward.
First, the Beetaloo Basin is an opportunity to develop a resources sector that, for the NT, can be as important to our economy as those great powerhouse regions just across our borders.
Nearby, Western Australian has the Pilbara. And Queensland has the Bowen Basin.
The Beetaloo could be that important for our economy, boosting the gas industry’s already intrinsic relationship with NT life.
One in every 11 jobs in the NT is supported by the gas industry supply chain, from offshore rig workers to gas fitters in the suburbs of Darwin.
But research has estimated that development of the Beetaloo could create up to 6,300 jobs and deliver $1 billion a year in revenue to the NT Government by 2040.
This is on top of the tens of millions of dollars that are already supporting local businesses.
New gas supply like that in the Beetaloo is critical to getting to net zero by 2050 because it can replace higher emitting fuels like coal, back up rising renewable generation for electricity, support major industries like manufacturing and be a feedstock to hydrogen.
The second area of future focus is the planned Middle Arm Sustainable Development Precinct, a multi-purpose hub near Darwin, a key cog in bringing decarbonisation technologies to market while providing a home to the innovation required to achieve net zero commitments.
The precinct is aimed at low-carbon fuels like hydrogen production and emissions reduction infrastructure alongside other critical commercial manufacturing and processing operations.
We support this precinct because these are all areas where the gas industry can play a central part on top of its traditional roles given its established expertise and infrastructure.
This includes a hub for carbon capture utilisation and storage (CCUS), creating local jobs and help a raft of industries reduce their emissions by capturing emissions and storing them to protect the environment.
To understand that the NT may be at international forefront of CCUS implementation is extremely exciting. By 2040, at least 90 per cent of the precinct’s emissions would be captured, according to the NT Government.
Finally, with all the excitement about onshore development potential, we must not forget the already established offshore operators in the NT including our exporters.
This financial year, Darwin’s LNG cargoes being shipped around the world will help propel Australia to a record $90 billion worth of gas export earnings, according to the latest Australian Government Resources and Energy Quarterly report.
With only the US and Qatar rivalling our export muscle globally, our LNG terminals like that in Darwin are delivering substantial economic benefits to Australians.
More opportunities loom.
Indonesia could move from being a net exporter of LNG to an importer from 2030.
According to the International Enery Agency, Indonesia could be importing an estimated $10 billion worth of LNG by 2050 – a $10 billion market – a new market – sitting on the NT’s doorstep in coming decades.
Importantly, this is in a pathway consistent with Indonesia meeting its net zero goals, underscoring the role of Australia’s exports in helping our Asian neighbours decarbonise.
The Federal Government has estimated Australia’s LNG has the potential to lower emissions in LNG-importing countries by around 166 million tonnes of carbon dioxide each year, the equivalent of reducing Australia’s total annual greenhouse gas emissions by more than a third.
This is achieved by replacing higher-emissions fuels like coal with the cleaner fuel of natural gas.
This balance between energy and economic security while moving towards net zero is the challenge of our times.
It is one the Northern Territory oil and gas industry has embraced as an opportunity and is working with stakeholders, investors, governments and community to realise in 2023 and beyond.
David Slama is the Northern Territory Director of the Australian Petroleum Production & Exploration Association (APPEA)