A new in-depth economic and climate analysis reveals it is unlikely gas companies could make money from fracking the Northern Territory’s Beetaloo Basin while also fully and accurately offsetting their domestic lifecycle greenhouse gas emissions.
The Reputex report, "Analysis of Beetaloo Gas Basin Emissions and Carbon Costs", highlights very high pollution, high costs and a high risk of stranded assets from fracking in the Beetaloo.
It also shows how fracking the Beetaloo at the scale promoted by governments and industry would massively contribute to Australia’s greenhouse gas emissions, at a time when climate commitments are under an international spotlight. Despite this, the Morrison Government continues to funnel public money towards fracking companies operating in the NT.
RepuTex is a leading provider of modelling and forecasting services for the Australian renewable energy, electricity, and carbon markets and state and federal governments.
The Reputex Report - Analysis of Beetaloo Gas Basin Emissions & Carbon Costs - was commissioned by Lock the Gate Alliance. It calculates potential NT fracking industry growth and the climate mitigation required under three scenarios - low, mid, and high.
Fracking expansion 2.5 times annual greenhouse emissions. Australia’s overall annual emissions are now around 520 Mt, meaning if the fracking industry expands in the NT as governments plan, it would be responsible for about two and a half times Australia’s annual greenhouse emissions. Based on government and industry gas resource estimates, the report finds Beetaloo GHG emissions would be up to 1.4 billion tonnes under a high production scenario over 20 years.
Cost of offsetting will be $3-$22 Billion. Based on conservative emissions calculations for methane, the report then calculates the ‘carbon liability’, i.e. the cost of offsetting emissions using Australian Carbon Credit Units (ACCUs), to range from $3 Billion (low scenario) to $22 Billion over 20 years.
Gas will be commercially unviable. The Reputex Report concludes, “In line with NT policy and Recommendation 9.8 of the Pepper Inquiry, the inclusion of carbon costs is likely to have significant implications for the commercial viability of Northern Territory gas basin projects, with potential for emissions liabilities to add between $1 - $2.5 per GJ to the cost of Beetaloo basin gas, varying with the modelled production scenario.”
In terms of Australia’s carbon budget in the event global warming is kept to Paris Agreement levels, the report notes: “The development of the Beetaloo Sub-basin under a mid to high scenario... is likely to have a significant impact on Australia’s remaining carbon budget, with modelled outcomes representing between 3 to 5 per cent of Australia’s remaining carbon budget remaining (2°C scenario). For a 1.5°C scenario Beetaloo Sub-basin gas could represent 10 to 27 per cent of Australia’s total carbon budget.”
The report notes in its conclusion: “Beetaloo basin gas emissions represent a large source of additional GHG emissions entering the Australian economy at a time when rapid global emission reductions are necessary to limit the effects of global warming. To this end, new oil and gas fields from 2021 have been modelled by the IEA to be inconsistent with a net-zero pathway.”
Darwin based Protect Country NT spokesperson Graeme Sawyer said, “This timely Reputex report confirms what we have long suspected and what the NT Gunner Government likely already knows - there is no cost effective way to mitigate the climate catastrophe fracking the Beetaloo would unleash.
“The cost of fracking is out of the ballpark even before you add costs associated with offsets and carbon capture and storage, as the Morrison and Gunner governments plan.
“Gas from the Beetaloo will be among the most expensive gas in the world. This report is a conservative calculation of what all the real costs actually are, and it’s clear fracking the Beetaloo is madness both economically and environmentally.”
Lock the Gate Alliance national coordinator Naomi Hogan said investors pumping money into companies that want to frack the Beetaloo should pay heed to the Reputex report’s findings.
“The Gunner Government is bound by its promises to uphold the recommendations of the Pepper Inquiry, which set in stone the need for fracking companies to not cause a net increase in emissions,” she said.
“This report reveals trying to frack the Beetaloo does not stack up economically. No wonder fracking companies have so eagerly asked for handouts from Australian taxpayers.
“It’s expensive gas and it’s highly polluting. Fracking the Northern Territory will take Australia in the wrong direction.
“This report clearly outlines that the push by governments and gas companies for large-scale fracking across the Northern Territory will lead to a massive increase in Australia’s pollution. There needs to be a reality check here. We can’t frack our way out of the climate crisis.
“Offsets are often dubious at best - this report now proves there’s no way it can be done that makes any business sense whatsoever.”