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Proponents of fracking in the Beetaloo Basin welcome the Greens' safeguard mechanism amendments, say they create 'certainty'

Fracking in the Northern Territory's Beetaloo Basin is now in doubt, according to the Greens. (Twitter: Tamboran Resources)

The Greens are claiming the Beetaloo Basin gas project has been "derailed" through amendments to the federal government's safeguard mechanism.

But is that the case?

Leader Adam Bandt claimed credit yesterday for putting "significant hurdles" in the way of new gas, including development in the basin 500 kilometres south-east of Darwin.

The government is using the safeguard mechanism as its key policy to implement a 43 per cent cut in emissions by 2030, with the new laws to take effect in July.

The mechanism will capture Australia's top 215 biggest polluters. They will have to reduce their emissions by 4.9 per cent each year to 2030, with a hard cap on Australia's total emissions also introduced.

In announcing the amendments, Mr Bandt singled out the Beetaloo Basin.

He said all scope one Beetaloo emissions — which come through the direct production of gas — would need to be offset.

Amendments secured by Greens leader Adam Bandt will see scope one Beetaloo Basin emissions offset by gas companies. (ABC News: Matt Roberts )

Scope two and three emissions will also now be "referred" to a forum of state and territory energy ministers.

"The Beetaloo gas field will be required from day one to offset all of its emissions — scope one, scope two and scope three — for domestic use," Mr Bandt said.

But that has actually been the case for five years, as per the Pepper report.

What is the Pepper report?   

The 2018 report was the result of a 15-month scientific inquiry led by Justice Rachel Pepper. It determined that the risks associated with an industry could be "appropriately managed" if 135 recommendations were implemented. 

Justice Rachel Pepper led an inquiry into a Northern Territory fracking industry in 2018. (ABC News: Jane Bardon)

The NT Labor government promised to do so and concurrently lifted a ban on fracking.

Thirty-five of those recommendations are still yet to be implemented, including "9.8", which states that there be no net increase in Australia's life cycle emissions from fracked gas produced in the territory.

Life cycle emissions include scope one, two and three.

Scope two emissions are indirect emissions from power generated to run a company's activities, while scope three result from the use of gas after it is sold.

Proponent says changes create 'certainty'

There are three companies currently exploring for gas in the Beetaloo Basin — Tamboran Resources, Empire Energy and Santos. They are awaiting territory government approval to start production.

In a statement to the stock exchange yesterday, managing director and CEO of Tamboran Joel Riddle welcomed the Greens' amendments.

He said they created "certainty" for his company's project.

"Tamboran is already leveraging the low-carbon gas we have [in] the Beetaloo Basin to be net zero in our company's scope one and two emissions from first commercial production," he said.

"The amendments the Greens demanded to the safeguard mechanism are captured already under [the] existing … Pepper inquiry that has been guiding our development for many years."

Empire Energy CEO Alex Underwood also welcomed the "clarity" from yesterday's announcement.

"As the NT government finalises the implementation of Pepper inquiry, settling the regulatory framework for the Beetaloo is essential to building investor confidence," he said.

Scope three emissions still unclear

Although Tamboran Resources and Empire Energy have said they are committed to net-zero scope one and two emissions, no one is taking responsibility for scope three, according to the head of Grattan Institute's energy program, Tony Wood.

Mr Wood said that "depending on what technologies are used … more than three-quarters or 75 per cent of emissions could be scope three".

"The Pepper inquiry says that all of these emissions, scope one, two, and three, must be offset before production proceeds," he said.

Tony Wood says it is still unclear who will be responsible for offsetting the Beetaloo Basin's scope three emissions. (ABC News: Steve Keen)

"This new announcement … doesn't provide any clarity on who actually will be responsible for those [scope three emissions].

"I think it remains up in the air. If anything, it's even more confusing than it was before."

Mr Wood said it was also unclear how the hard cap on Australia's emissions would impact the Beetaloo Basin.

A so-called "pollution trigger" in the mechanism will require the climate change minister to test a new or expanded project's impact on the hard cap.

"If that cap looks like being exceeded … the minister will be forced to do something about that," he said.

"The minister of the day will then have a range of things they could do … it does impose a constraint that wasn't there before.

"Hopefully the rules will make it clear exactly how … the minister would deal with those situations if and when they ever emerge."

The NT Environment Centre has estimated 22 million tonnes per annum of scope one emissions will need to either be mitigated or offset from the Beetaloo Basin in a large production scenario.

"At the current [carbon credit] spot price of $36.50 per tonne, this would cost $803 million per annum to offset," executive director Kirsty Howey said.

The Greens have also claimed Santos's Barossa gas project, 300 kilometres offshore from Darwin, has been "derailed" through changes to the safeguard mechanism.

Santos has been contacted for comment.

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