More than 500 million years ago, long before dinosaurs roamed the Earth, a unique formation began developing in what is now the Northern Territory.
Over time, layers of ancient mudstone and sandstone created the Beetaloo Basin, a giant underground source of shale gas that can be used to generate electricity.
Today, a public hearing will be held in Darwin as part of a Senate inquiry into the basin, which covers about 28,000 square kilometres southeast of Katherine.
It is mainly examining the Australian government's decision to hand out $50 million worth of grants to oil and gas companies looking to explore the gas-rich Beetaloo.
What are the grants for?
The federal government views the natural gas buried deep in the basin as a reliable source of energy that is arguably cleaner to burn than coal or oil.
The gas could be used domestically for heating, cooking and manufacturing, and it could also be exported overseas.
To speed up Australia's post-COVID "gas-led recovery", the federal government created the multi-million-dollar grants program as a way to boost private investment in gas development projects.
Federal Resources Minister Keith Pitt has said gas production in the Beetaloo Basin could create more than 6,000 jobs in the region and will help firm up Australia's energy and economic security.
What's the problem?
Unlike conventional gas reservoirs, which migrate closer to the Earth's surface, shale gas is trapped inside the tiny cracks of a rock.
To extract it, gas companies must perform hydraulic fracturing, known as fracking, a controversial well-stimulation technique that produces large amounts of potentially toxic wastewater.
Fracking also releases large amounts of methane, a potent greenhouse gas that is accelerating the warming effects of climate change.
Environmental groups have argued that any benefits of fracking and shale gas production will be outweighed by the resulting pollution and increase in carbon emissions.
They are opposed to the federal government offering taxpayers' money through grants to the fossil fuel industry.
Mining companies, however, have said these risks can be safely managed by using advanced engineering techniques and complying with strict environmental regulations.
The companies have also said they are engaging with traditional owners and will monitor environmental risks.
Has fracking started?
Yes, it has — for exploration but not for gas production yet.
In 2018, the Northern Territory government lifted a temporary ban on fracking following a 15-month-long inquiry led by judge Rachel Pepper.
Known as the Pepper Inquiry, its final report made 135 recommendations to mitigate the risks associated with any onshore shale gas development in the NT.
All of them were agreed to in full by the NT government.
So far, the NT government said it has introduced 47 per cent of the recommendations, and has started working on all the others.
But there is one commitment that could have global implications if it is not met before fracking begins: Recommendation 9.8.
It states that:
"NT and Australian governments must seek to ensure that there is no net increase in the life cycle greenhouse gas emissions in Australia from any onshore shale gas produced in the NT".
To meet this obligation, both governments must find a way to fully offset all lifecycle carbon emissions produced by fracking.
Neither government has done that yet.
The key players
At least nine gas companies have registered their interest in exploring the region for natural gas, with several test drilling operations already underway.
They include:
- Armour Energy
- Empire Energy Group
- Falcon Oil and Gas Australia
- Hancock Prospecting
- INPEX Oil and Gas Australia
- Origin Energy
- Santos
- Tamboran Resources
- The Energy and Minerals Group
These companies will be represented at the inquiry by the Australian Petroleum Production and Exploration Association (APPEA).
The inquiry will also hear from environmental groups and local traditional owners, who want the federal and NT governments to invest taxpayers' money into renewable energy instead.
Anti-fracking groups include the Environment Centre NT, Lock the Gate Alliance, GetUp, Nurrdalinji Native Title Aboriginal Corporation and the Environmental Defenders Office.
Other stakeholders opposed to fracking the Beetaloo include cattle producers who have said their land will be affected by gas production activities.
The 11-person committee overseeing the inquiry has a Labor majority and will be chaired today by WA Greens Senator Dorinda Cox.
The final report is due to be handed down on April 21.
