Economic argument for fracking built on hot air and taxpayer subsidies

Published: May 21, 2020

The economic argument in favour of fracking the Northern Territory has suffered another blow.

Last week, The Australia Institute's Fracking and Slacking report revealed taxpayers had paid about $100 million to prop up the gas industry over the past decade. 

Far from being a “lifter”, the report exposed the unconventional gas industry as a drain on the Territory’s fragile economy. 

Report author Rod Campbell found the $94 million used to prop up the fracking industry could have instead employed roughly 100 teachers, nurses, or specialist Aboriginal health clinicians, over the past 10 years. 

According to the NT Government’s own budget figures, $60.4 million paid for subsidised exploration and gas industry promotion, while approximately $33.6 million went to unrecovered administration costs.

Despite so much taxpayer funds spent propping up the industry, it has so far failed to deliver much to Territorians. 

Companies were only exploring for gas before coronavirus restrictions brought activity to a screeching halt earlier this year. 

Public Health Association of Australia’s NT Branch President, Associate Professor Suzanne Belton described the report’s findings as “a sorry tale of poor investment and disregard for the health and well-being of Territorians”. 

“Tax money channelled into gas and oil not only harms Territorians’ health, but it fails on an economic argument as well,” she said. 

“Millions of dollars of taxpayers’ money support a lie that oil and gas are commercial winners. They are not. 

“This is a government handout paid to companies who cannot even make a profit. This is the charade of capitalism and Territorian taxpayers are paying for it.” 

Mr Campbell said it made little sense for the government to continue spending public money on the industry. 

“Economic analysis commissioned by the Fracking Inquiry found a ‘very high probability’ that unconventional gas in the Territory will never pay royalties,” he said. 

“That finding was before the coronavirus pandemic hit oil and gas markets and delayed NT fracking projects, with costs that industry analysts describe as ‘ridiculous’. 

“The Territory economy doesn’t need a subsidised gas industry that divides communities and poses risks to the environment." 


But the day after the report’s release, the Territory Government announced $12 million in new subsidies for the fracking industry. 

The government said it was for “the development of an onshore gas industry in the Territory to progress the Strategic Regional Environmental Baseline Assessment (SREBA)”. 

Protect Country Alliance spokesperson Dan Robins said there was criticism of the SREBA. 

“The SREBA had been heavily criticised by health experts for its inability to meet its stated purpose of protecting the health and wellbeing of residents of the Northern Territory affected by shale gas mining developments,” he said. 

"At any rate, we wouldn't need the SREBA in the first place if this government did the right thing and walked away from the expensive and polluting fracking industry.” 

Despite the government’s bullish attitude, opposition to fracking the NT continues to grow. 

Recently, on the ABC’s Q&A program, NT local and member of SEED Mob Ethan Taylor asked whether it was possible to reignite the NT’s economy without sacrificing land and water to the fracking industry. 

Panelist and Orange is the New Black star Yael Stone responded by calling out the gas industry’s lies. 

“We mustn’t suffer under the misinformation that gas is the solution because the enviro impacts of gas are vastly underestimated (for) processing and extraction,” she told viewers. 

“In communities like Ethan’s, in the NT where they are currently fighting a huge battle against companies that want to frack and extract gas, they’re having their chance to have their say, but they’re not really being listened to. 

“A great shame to emerge from this would be for Australian people to think that gas is a solution because it’s not. We are a country rich in sun and wind and we need to really harness that.”

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