Recovery: No help from oil and gas, says study

By ERWIN CHLANDA

 

The Territory’s two conservative parties are supporting calls from peak industry bodies for an economic recovery commission as The Australia Institute describes the onshore oil and gas industry – meant to be an answer to the NT’s financial fiasco – as “a leaner, not a lifter in the Northern Territory”.

 

The institute’s research director Rod Campbell says: “Territory taxpayers pay far more to the onshore oil and gas industry than they receive from it.”

 

NT Government budget papers reveal that over the last decade $94m in subsidies and assistance measures have benefited the industry.

 

Key findings are:-

 

• The NT Fracking Inquiry recommended industry fees should cover growing administration expenses. The government’s process is “still at the planning stage”.

 

• Unrecovered administration costs totalled at least $33.6m.

 

• Subsidised exploration and industry promotion cost at least $60.4m.

 

• Instead of funding the onshore oil and gas industry, this money could have paid the salaries of 104 nurses, 94 teachers or 94 Aboriginal health practitioners.

 

• Royalties are unlikely to ever cover these costs according to the Fracking Inquiry economic assessment.

 

The director of the Arid Lands Environment Centre Jimmy Cocking (at left) describes as a disturbing revelation documents which appear to show the NT Government is preparing to use public money to fund a gas pipeline from Tennant Creek to Darwin.

 

He says this is despite the increasingly dire state of the industry and at a time when gas fracking companies are indefinitely putting their operations in the NT on hold.

 

“Maps associated with the government’s call to tender show the pipeline would travel from Tennant Creek to a gas hub near Darwin where it could then be exported to Asian countries,” says Mr Cocking.

 

“It’s bad enough the NT Government would spend public money propping up the fracking industry,” he said.

 

“But to do so at a time when companies, like Origin Energy, are announcing indefinite pauses on their projects is just madness.”

 

Meanwhile Opposition Leader Lia Finocchiaro (at right) says the peak industry bodies’ proposal has merit “but it also demonstrates clearly that business has lost confidence in the Gunner Government to fix the Territory economy.

 

“The Gunner Government isn’t focused on the economy and isn’t focused on scrutiny,” Mrs Finocchiaro says.

 

Territory Alliance Leader Terry Mills says critically important decisions will need to be made, and the peak industry groups groups “need to be at the same table empowered to act together”.

 

They are aligned with the Territory Alliance’s pandemic recovery plans, he says: “Our proposed Territory Economic Rebuild Committee has representatives of key industry groups at the table. Importantly though we believe it is crucial for the Commonwealth to be included due to the significant infrastructure investment required.

 

“It beggars belief that with all our resources, pastural businesses, proximity to Asian market and past major projects that the CLP and Labor governments have managed to effectively bankrupt the Territory Government,” says Mr Mills (at left).

 

“We need to bring back the can-do approach that has worked.”

 

The following areas of the economy are, and will remain, significantly affected by the measures taken, says Mr Mills, and that will continue to exist as a result of the health imperative:

 

● The tourism, events, hospitality and arts sectors and foreign worker programmes.

 

● Construction and Resources sectors.

 

● Non-government and government services sectors.

 

● Retail and service industries sectors.

 

● Professional and social sporting activities, including kids sports.

 

● Education sector, including childcare and higher education, vocational training sectors.

 

The direct impact on these sectors will continue to affect employers, sole traders, employees, rental and mortgage payments and will continue to result in a further economic downturn in the Territory Economy over the coming 12 to 24 months, says Mr Mills.

 

“This is compounded by the seasonal impact of the loss of a Dry Season peak trade. In addition, the Territory was already in recession before the COVID-1 9 health imperative measures decreased economic activity.”

 

Related reading.

 

Photo Environmental Justice Australia.

 

 

UPDATE May 13 at 9.30am

 

Chris Zipf provided the following statement: I’d like to clarify and correct the misleading statement made by Arid Lands Environment Centre’s Jimmy Cocking about Origin putting operations in the NT on hold indefinitely.

 

In late March we announced that we would temporarily pause exploration activities at our Kyalla well site and reschedule further work to the second half of the year.

 

Our plan is that Northern Territory based employees and contractors will undertake the civil works like preparing roads and other activity necessary to move equipment in preparation for this.

 

We remain committed to our Beetaloo project which, if successful, has the potential to deliver long-term economic and social benefits for the Northern Territory and Australia, though for now we will continue to play our part in protecting the health and safety of communities across the Territory.

 

 

 

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5 Comments (starting with the most recent)

NB: If you want to reply to a previous comment, start your comment with this notation: @n where n is the number of the comment you want to reply to.
  1. Frank Baarda
    Posted May 14, 2020 at 9:43 am

    A Tennant Creek to Darwin pipeline duplicates the existing Mereenie / Palm Valley pipeline to Darwin.
    There is probably a rational explanation for this.
    Can anyone help with this?
    As for the need to subsidise huge capital intensive projects, I’m not so sure.
    I have serious doubts about the level playing field and the trickle down effect and think the NT is far too willing to encourage outsiders to make a shit load of money from our non-renewable resources.

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  2. Posted May 13, 2020 at 10:43 am

    The US and Russia are still grappling with COVID 19 while the situation in developing countries is likely to be out of control.
    Hence oil prices can be expected to remain low for several years due to a lack of demand and oil companies will be unlikely to commit resources to developing projects in this climate.
    Given that on shore oil and gas projects are not labor intensive nor a current major contributor to the NT economy – why should the NT Govt. provide funding support at this time if is not going to kick start the economy? The NT Govt. would be best placed focusing on existing industries.

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  3. Ken
    Posted May 12, 2020 at 1:26 pm

    @JohnJansen: You appear to be rusted in politically. I am conservative too but I can see more perceptively about Robin Lambley.
    I align somewhat with Terry Mills who was white anted by Adam Giles while attending to NT business away from Australia.
    The CLP exploded and the then treasurer Robin Lambley resigned to become independent (now TA) when Adam Giles with the CLP sold the Port of Darwin to the Chinese Communist Government.
    Is there anything more left than the Chinese Government.
    Lambley and Mills are straight right wing conservatives. They are both dyed on conservative and Robin Lambley is certainly best tor Central Australia and Alice Springs.

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  4. Jack
    Posted May 12, 2020 at 12:29 pm

    Internationally the gas industry is in a dire state but not in Australia where East Coast prices in particular are holding up.
    With the exception of Origin Energy at Beetaloo NT gas fracking companies are not indefinitely putting their operations on hold.
    For example Central Petroleum is pushing ahead with its Dukas project.
    The gas industry in the NT is one of the very few opportunities for us to reduce our crippling debt in the longer term.
    Being land based the NT gets the royalties and they could be massive in the future.
    It is far from madness for the NT Government to support the gas industry.
    In fact it makes good economic sense.
    Fair enough to make the case against fracking but not by using a false economic argument.

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  5. John Jansen
    Posted May 12, 2020 at 12:03 pm

    Territory Alliance is not a conservative party.
    Just look at there staff Delia Lawrie, Jeff Collins, Robin Lambley, Terry Mills all very left leaning people.

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