A Northern Territory government promise to ensure all greenhouse gas emissions from fracking the Beetaloo Basin will be offset is in doubt, according to a government-appointed policy watchdog.
And, the watchdog says, the commitment will not be fulfilled unless the new federal government steps in to help with stronger climate action than what Prime Minister Anthony Albanese has said he will take to the new parliament, which sits next week.
It comes as federal Greens leader Adam Bandt flags development of the gas-rich basin as a potential sticking point in negotiations for the minor party's support for Labor's climate bill.
The comments by policy watchdog David Ritchie are in the latest report card on the implementation of strict reforms recommended by a landmark inquiry, which was held before Territory Labor lifted its temporary fracking moratorium in 2018.
Gas companies are ramping up exploratory drilling in the massive region south-east of Darwin — which they say contains enough shale gas to power Australia for an estimated 200 years — however the NT government has repeatedly said all 135 recommendations from the inquiry will be implemented in full before any production begins.
In his latest advice, Dr Ritchie — who was appointed as the "independent overseer" of the promised reforms — said there was now "a clear path" to putting most of them in place.
However, he said that was "with the exception" of the inquiry's main recommendation on limiting the climate impacts of the basin's development.
The recommendation said that the NT and Commonwealth governments should "seek to ensure" there is no net increase in lifecycle greenhouse gas emissions in Australia from developing the Beetaloo.
The inquiry's authors said that would be a "challenging" but necessary task that the Northern Territory would be unable to achieve on its own.
In his oversight letter Dr Ritchie writes that:
The NT government's proposed emissions reduction measures alone "will not meet the objective of recommendation 9.8: to ensure that there is no net increase in the lifecycle GHG emissions emitted in Australia from any onshore shale gas produced in the Territory."
"For recommendation 9.8 to be implemented, the Territory must have the support of the Commonwealth Government to make the necessary legislative and policy changes."
The letter covers work undertaken between November and April, confirming that Territory Labor had not secured an agreement with the Coalition government before the federal election.
The government had publicly maintained that negotiations on the agreement were ongoing, while departmental officers privately said the Commonwealth had been "clear" that it would not be taking responsibility for a promise made by the NT government.
The ABC's request for an interview with independent watchdog Dr Ritchie was knocked back by the Chief Minister's department.
Federal Labor says emissions promise is 'the NT government's commitment'
Since the change of federal government in May, the fracking inquiry recommendations have been raised with the new climate and environment ministers, according to a NT government spokesperson.
Climate Change and Energy Minister Chris Bowen's office said he was not available for interview this week.
Asked if federal Labor would accept and commit to the Pepper inquiry's emissions recommendation, a spokesperson for Minister Bowen said:
"Labor welcomed the Northern Territory Government’s commitment to implement all 135 recommendations of the Pepper Review before any production begins, including in relation to offsets and consulting Traditional Owners.
"The Albanese Government’s position remains the same today."
The spokesperson said federal Labor was committed to reducing Australia's emissions by 43 per cent by 2030 and strengthening the safeguard mechanism for large emitters.
The new government is hoping to enshrine the target in legislation as one of its first acts in parliament, but will need crossbench support to do so.
Federal Greens leader Adam Bandt told the ABC's Insiders program on Sunday that the party was open to supporting the government's target, which is much lower than the Greens policy of 75 per cent.
However, he said the Greens' concerns about new oil and gas projects — including the Beetaloo and Western Australia's Scarborough project — would "have to be on the table" during negotiations.
"You don't put the fire out while you're pouring petrol on it," he said.
"Because it could potentially blow the 43 per cent [target] out of the water.
"Just one of those projects could blow it out of the water."
Mr Bandt said the NT government's request for federal funding for gas industry infrastructure would also be a "test" for the Albanese government.
Industry says reforms 'important to get right', green groups warn of broken promise
A spokesperson for gas industry peak body APPEA said the implementation of the Pepper inquiry recommendations was "important to get right" so that the basin's economic benefits can be realised.
But they said questions about the implementation and funding of the emissions recommendation "are a matter for the NT and Commonwealth governments."
"We welcome the NT Government's strong progress implementing the Pepper Inquiry reforms – including those relating to climate change and emissions – to ensure production can proceed in an environmentally safe and responsible way once finalised," the spokesperson said.
The association said gas companies would work with the NT government on a proposed carbon capture and storage hub in Darwin and could retire other assets in their portfolio's to offset emissions.
But the Environment Centre NT's Kirsty Howey said Dr Ritchie's letter was damning.
"This is perhaps the most significant recommendation of the entire Pepper inquiry, it's the biggest in terms of cost and impact on the environment," she said.
"The Gunner government — as it then was — made the promise it would implement all recommendations of the inquiry.
Estimates vary on the volume of emissions likely to come from development of the basin.
Internal documents have previously revealed concern within government that the emissions would swamp even the previous Coalition's government's weaker emissions reduction targets.
Bureaucrats have also expressed doubt about whether there are enough carbon credits in Australia to offset the basin's emissions.
The spokeswoman said the NT government was continuing to work on "satisfactorily" implementing all recommendations by the end of the year.
It did not respond to a question on whether fracking would go ahead without the Commonwealth's commitment to recommendation 9.8 or another plan to fulfil its objective.
