NT fracking economics report could be marred with conflict of interest

Published: May 26, 2017

The announcement that ACIL Allen is the successful tenderer for the Economic report to the NT Fracking Inquiry has drawn criticism and concern due to a perceived conflict of interest over its major clients in the oil and gas sector.

"The independence of the NT Fracking Inquiry could be jeopardized by economic analysis by ACIL Allen," said Naomi Hogan of Lock the Gate.

"ACIL Allen has a long list of mining and gas companies for clients, including Jemena, a key advocate of fracking in the Territory. Clearly there is huge potential for a conflict of interest here.

"ACIL Allen is no innocent economic bystander - they have a history of aggressive economic claims to push the gas fracking industry. 

"Most recently, fracking giant Santos used ACIL Allen to push through the economic rationale for their 850 well coal seam gas project in NSW. An assessment of their modelling reveals that ACIL Allen ignored financial and environmental costs to exaggerate the economic value of their client’s project.

"Gas company AGL commissioned ACIL Allen to write a 2014 report pushing for increased coal seam gas development across NSW.

"The Fracking Inquiry should reconsider the engagement of ACIL Allen to do the review, as the community can have no confidence whatsoever in its independence,” she said.

Rod Campbell, Research Director of the Australia Institute added, “ACIL Allen has a track record of overstating expected tax revenues of their client’s projects,” he said.

"In 2015 ACIL Allen estimated Chevron’s gas projects would generate tax revenues of $355 billion. Chevron now says it will pay between $60-$140 billion, but will not begin paying for decades. 

"If Territorians are going to have any faith in this economic analysis then the Fracking Inquiry must ensure there is a transparent process around this report. There must be a multi-stakeholder panel that oversees the economic modelling assumptions that ACIL Allen use.

"Without this oversight the fox is guarding the henhouse of the NT’s gas and water resources.

"The community must be able to see and provide feedback on the economic model assumptions that ACIL Allen is using to create their projections,” he said. 

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