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Business
Jane Bardon 

Industry says gas from the Beetaloo Basin could solve Australia's energy crisis. Some energy analysts question that claim

Gas companies have been ramping up exploration in the Beetaloo Basin.  (ABC News: Hamish Harty)

The Northern Territory's remote Beetaloo Basin was former prime minister Scott Morrison's gas-led recovery poster child, and the plan to develop the region has been wholeheartedly backed by the Albanese government.

The gas industry is now holding it up as one essential solution to Australia's energy crisis.

Stretching across an area more than twice the size of Tasmania, the basin contains enough shale gas to power Australia for an estimated 200 years

"The way to tackle energy needs today is to have a secure supply [and] the Beetaloo Basin can offer that secure supply," Cassandra Schmidt from the Australian Petroleum Production and Exploration Association said.

Gas companies, including Origin Energy and Santos, have been ramping up exploration in the region after the Territory Labor government lifted its moratorium on fracking in 2018. 

The Northern Territory government is keen to allow the industry to move from exploring the Beetaloo to full production next year, once a series of regional environmental baseline studies are complete.

The NT government is also pressing the case that the Basin could help plug domestic gas shortages.

"It is important that we do have reliable supply over future years," the NT Mining Minister Nicole Manison said.

"As the federal government has also stated, they see the Northern Territory as the best case of how to go about developing onshore gas."

Tamboran Resources is drilling water bores in preparation for another test well on Tanumbirini Station.  (ABC News: Hamish Harty)
NT Mining Minister Nicole Manison examining core samples from the Beetaloo and other resource projects she hopes will be developed. (ABC News: Jane Bardon)

While the industry argues extracting the Beetaloo's gas for electricity could generate thousands of jobs and a billion dollars in revenue for the NT government over the next 20 years, some experts have questioned the economic benefits as countries set more ambitious climate targets, and what it would mean for the domestic market. 

There are also concerns about whether all carbon emissions could be offset, while the federal government strives to meet its more ambitious emissions reduction targets.

Grattan Institute energy analyst Alison Reeve said increasing pressure to decarbonise, and the cost of that, meant a business case for the Beetaloo was not likely to stack up without big government subsidies.

"Internationally and in Australia we are going to see people moving away from gas," she said.

The Beetaloo covers 28,000 square kilometres of sparsely populated cattle country and Indigenous land, and nearby communities.  (ABC News: Hamish Harty)

Rick Wilkinson, a consultant at EnergyQuest, which provides strategy advice to the gas industry, also believes gas companies could struggle to find enough long-term investors, as the emissions reduction window closes.

"As we start to get within the net zero carbon commitments of governments, it doesn't take long before you start bumping into areas where the off takers are more reluctant to commit to the 20-plus years that normally underwrites a project of the size of the Beetaloo," he said.

Some Beetaloo traditional owners are worried about the risk of gas impacts to water in areas including Marlinja, while others have been reassured.  (ABC News: Hamish Harty)

Farmers argue it's not worth the risk

Farmers and some Aboriginal traditional owners are using that analysis to step up arguments that the risks to their businesses and livelihoods of allowing the industry to keep pushing towards full production are too high.

Pierre Langenhoven's Rallen Australia cattle operation on the massive Tanumbirini station, about an 800-kilometre drive from Darwin, is the unwilling host to fracking exploration wells owned by Santos, Tamboran Resources subsidiary, Sweetpea, and Origin Energy.

They are some of 18 drilled so far in the Beetaloo. 

Tanumbirini Station owner Pierre Langenhoven and manager Andrew Stubbs fear if exploration by three gas companies moves to production, their cattle operation will be damaged.  (ABC News: Hamish Harty)

Mr Langenhoven paid $70 million for Tanumbirini with Santos wells already on it, along with another nearby cattle station, two years ago.

"We went to the Santos site, it was one well pad and they were flaring gas, and I thought: that's fracking, and it doesn't look like a big problem," he said.

He said he had been told there is now the possibility of 1200 wells in the Beetaloo, on Tanumbirini and other stations, going ahead.

"We've got three gas interest holders on one property, and if all three go to full production there will be no space left for us to do our business," he said.

Tanumbirini Station owner Pierre Langenhoven has opposed Tamboran Resources Sweetpea coming onto his cattle station.  (ABC News: Jane Bardon)
Pastoralists fear fracking will cause major disruption to their cattle operation. (ABC News: Hamish Harty)

The pastoralist opposed, but couldn't stop Tamboran Resources' subsidiary Sweetpea from beginning exploration on Tanumbirini in June.

Under Northern Territory land access laws, cattle producers have a legal right to negotiate compensation, but they can't veto fracking, which means companies have the right to explore the tenements they've been granted. 

"They compensate for a well drilled or an access road bulldozed, but they don't compensate for the decrease in market value of the property," Mr Langenhoven said.

He has also questioned what a future with more gas would mean for climate change. 

"Look at all the floods. This will be the sixth-driest season we've had in 100 years, so things are not getting better. And it doesn't help to make it worse by getting gas out that, frankly, I don't think we need," he said.

Some of Tanumbirini's traditional owners have negotiated deals with the gas companies, which are all promising not to damage any sacred sites.

Johnny Wilson is among others opposing development because he's worried about sacred sites on the now dry Newcastle Creek, and underground water.

Johnny Wilson is concerned about sacred sites near the now-dry Newcastle Creek and dreaming tracks.  (ABC News: Jane Bardon)

'Are we going to be exporting all of it?'

In the north-west Beetaloo Basin, pastoralist Carina James is sceptical that Empire Energy's plan to extract gas from her Cow Creek station, near Larrimah, could help solve Australia's energy crisis.

Carina James is worried fracking could damage aquifers she relies on.  (ABC News: Jane Bardon)

"Will it really? I'm not sure it's going to work because are we keeping gas from this back for our own use, or are we going to be exporting all of it?" she said.

Like many stations on the Sturt Plateau, Cow Creek is totally dependent on bore water.

"If drilling causes water from one aquifer to mix with another, that's all fine if they're good fresh aquifers, but they're not, and you've got a high salt aquifer, how are they going to fix it?" she said.

The Northern Territory's 2018 Pepper fracking inquiry found that Beetaloo greenhouse emissions and water risks were acceptable, but must be mitigated.

"We work in a highly regulated industry, where we're required to test groundwater before, during and after our activities," Cassandra Schmidt from APPEA said.

Philip Ulamari hopes gas development will provide local economic benefits.  (ABC News: Hamish Harty)

Native title holders keen for economic benefits

In Marlinja, on the Basin's southern edge, some native title holders of Beetaloo Station said they have been reassured by Origin Energy that any environmental risks can be mitigated.

"I just hope when everything does start, that younger generation get good jobs out there and more opportunities for them to earn a bit more money for themselves," he said.

His nephew Ben Ulamari has already secured a monitoring job with Origin.

"They've said they'll help protect our artefacts and historical heritage, which they are already doing, they're already monitoring each well head with monitoring bores," he said.

'We're a long way from everywhere'

Across the Beetaloo's 28,000 square kilometres of sparsely populated cattle country and Indigenous land, local business owners are trying not to pick sides.

In Daly Waters, in the Basin's centre, pub and motel owner Tim Carter is keen to keep catering to the tourism, pastoral and gas industries.

But he's not banking on a big gas development in the Beetaloo.

"We've seen a lot of other areas where they promise things, and it doesn't eventuate," he said.

Some of the Beetaloo's tiny towns, like Daly Waters, are benefiting from tourism, the pastoral industry and now gas.  (ABC News: Jane Bardon)

Gas 'part of the energy mix beyond 2050'

It has been confirmed that there is a rich resource in the Beetaloo.

Companies are now trying to prove they could get the gas out to both domestic and export markets, at cost-effective rates.

"The Beetaloo Basin is in a good position, to be able to reach production some time next year," Ms Schmidt from APPEA said.

The gas company with the most wells, Origin, said the earliest it could go into small-scale production is 2025.

The Pepper inquiry forecast the Beetaloo's greenhouse gas emissions would be equal to five per cent of Australia's total emissions now, if most of the gas was exported.

Ms Schmidt is confident the industry will be able to reduce and offset those.

"Gas will be a key part of the energy mix now into the future and beyond 2050," she said.

"We're heavily investing in decarbonising technologies such as carbon capture and storage."

Cassandra Schmidt says the Beetaloo will be ready to begin production next year.  (ABC News: Michael Donnelly)

The Grattan Institute's Alison Reeve thinks developing the Beetaloo would take at least three to seven years, and she doubts carbon capture and storage will be proven viable in that time.

"Carbon capture and storage is a very complicated technology to use," she said.

"You don't want to move the C02 more than 100 kilometres, because after that it is very difficult and expensive to move it, so the economics would be pretty marginal."

Moving Beetaloo gas east too expensive

If a business case for the Beetaloo can be proven, Ms Reeve has doubts that it would be sent to eastern Australia, due to the cost. 

"The Beetaloo Basin is a lot closer to Darwin, and potentially then to exports, than it is to the demand centres in the south-east of Australia, and getting it down to those demand centres would mean that it is high-cost gas," she said.

Alison Reeve doubts the Beetaloo's economics stack up.  (ABC News: Greg Nelson)

Mr Wilkinson believes Australia would benefit from Beetaloo gas if it could be proved commercially viable "to keep the security of supply, and keep the cost down".

However, he said: "At the moment, as of today, there is no proof that any of the gas in the Beetaloo is commercial."

Mr Wilkinson agreed with Ms Reeve that sending the gas east would be prohibitively expensive, particularly when compared to the cost of developing already planned, more advanced gas projects nearer the market.

"If you move gas from the Beetaloo, down to Sydney or Melbourne, you add about $5 to $6 a gigajoule on current pipelines," he said.

Santos is one of the companies carrying out fracking exploration on Tanumbirini Station. (ABC News: Hamish Harty)

Mr Wilkinson thinks sending Beetaloo gas to Darwin instead could make the project stack up, particularly if the gas companies were able to extract condensate oil as they hope.

"If they get some of the heavier gases like ethane, propane, butane, or some the lighter oils associated, that's a great basis for building petrochemical plants, plastics, polyethylene, [and] all of that is very valuable feedstock to be processed and exported from Darwin," he said.

The gas companies have promised to rehabilitate all of their old Beetaloo wells.

Mr Langenhoven fears that even if the Basin doesn't reach full production, his business will suffer.

"If it doesn't work out, they can pull up stumps and leave, and we're going to be left to fix everything that they've destroyed," he said.

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