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NT government bureaucrat warns fully implementing fracking recommendation 9.8 could scare off gas industry in confidential email

Energy companies are expanding exploration in the Northern Territory's Beetaloo Basin. (Supplied: Empire Energy)

A senior Northern Territory environmental bureaucrat warned that fully implementing a key commitment to limit fracking emissions could scare off the gas industry, confidential government correspondence reveals.

The document, obtained by the ABC under Freedom of Information, also warns there might not be enough carbon credits in Australia to offset all emissions from fracking in the Beetaloo Basin. 

The basin, about 500 kilometres south-east of Darwin, is a large shale gas field that has formed a critical part of the federal government's post-COVID "gas-led recovery".

When the NT government lifted a ban on fracking in 2018, it agreed to "seek to ensure" there would be no net increase in Australia's life cycle greenhouse gas emissions from producing gas, a recommendation known as "9.8" in a landmark fracking inquiry. 

However, in an email from within the NT Department of Environment from March last year to Chief Executive Joanne Townsend, public servant Paul Purdon asks "how ambitious" the government wants to be, saying the "preferred approach" was to focus on emissions within the NT's control, as well as the net-zero by 2050 target.

The Beetaloo Basin is being pegged as a future hub of Australian gas production. (Supplied: Empire Energy)

In response to questions about the email, an NT government spokeswoman said all public policy advice "should include analysis of how it applies, intersects or conflicts with other policies and policy commitments".

Environmentalists claim the correspondence raises serious questions.

"It's not appropriate for the environmental regulator to be factoring in questions of whether or not the gas industry is going to appreciate having to offset their emissions," Hannah Ekin from the Arid Lands Environment Centre said.

"We see this again and again — [the government] are bending over backwards to facilitate this gas industry, regardless of what the impacts are on our community.

Ms Ekin says the correspondence isn't appropriate. (ABC News: Xavier Martin)

'Questionable' whether there are enough carbon credits to offset emissions

The correspondence has escalated long-standing concerns that Recommendation 9.8 to offset emissions could be weakened.

The fracking inquiry's recommendation specifically related to limiting life cycle greenhouse gas emissions – that is, all emissions created from the production of gas in the NT as well as its transportation and consumption elsewhere.

Many of those emissions will occur outside of the Northern Territory, so the inquiry made the Recommendation a responsibility for the Commonwealth government too.

The NT government has previously said gas companies will play a significant role too, and it has recently progressed policies that would require companies to use mechanisms like carbon credits to offset their emissions.

However, in the email, Mr Purdon wrote that a key question for the government was "how ambitious [it] wants to be in implementing recommendation 9.8 in the NT itself".

He wrote that one option would be "to require the offsetting of all production emissions (petroleum companies only)" and another would be to "require the offsetting of all production, transportation and consumption emissions in the NT".

He also wrote that it was "questionable" whether the national supply of recognised carbon credits would be enough to offset life cycle emissions from NT gas.

The Beetaloo Basin is being pegged as a future hub of Australian gas production. (Supplied: Empire Energy)

'Damning' if emissions can't be offset, climate advisor says

Mark Ogge, a climate and energy advisor with the Australia Institute and observer in this space, said it was "absolutely damning that there's not enough offsets in all of Australia to offset the potential emissions from fracking in the Northern Territory."

"If that's the case and there's not enough offsets, it simply means — if the emissions can't be offset — then fracking shouldn't be able to go ahead," he said.

Other challenges Mr Purdon listed in the email include:

  • "Our regulatory powers only apply to activities in the NT, so we have no ability to regulate emissions from the transport and downstream consumption of Territory gas outside of the NT."
  • "The Australian government has not accepted the recommendation and has been very clear that it is for the Territory to implement."
  • "Gas companies have set their own greenhouse gas emissions targets across their portfolios. These targets only apply to the emissions within their control, so they won't address full life cycle emissions."

"The preferred approach to delivering recommendation 9.8 is to focus on the emissions that are in the Territory's control, in the context of the net zero by 2050 target and the pathway required to achieve the target," the email said.

Confusion over joint agreement

There is also confusion over the extent of the Morrison government's support for the recommendation.

The federal government holds that the fracking inquiry's report was not a report for the Commonwealth, but said it would work with the NT government to honour its commitment.

Ms Lawler said the Commonwealth was supporting the recommendation. (ABC News: Felicity James)

NT Renewables and Energy Minister Eva Lawler has denied the federal government has distanced itself, pointing to a bilateral energy and emissions deal signed last month.

"Recommendation 9.8 means that we all have to work together to achieve that recommendation," she said.

She said her government had taken many steps to achieve the recommendation, including progressing emissions offsets policies which require companies to address climate change.

Ms Ekin from the Arid Lands Environment Centre said she was concerned the government's focus was shifting to its broader target of net zero emissions by 2050.

But she said failing to honour the commitment before production begins could call "into question the viability of living in the Top End of Australia into the future".