The gas mess
By ERWIN CHLANDA
Territorians are told by the CLP Government that there is enough gas in the Beetaloo Basin to keep the lights on in all of Australia for 200 years. Unsurprisingly they are expecting a bonanza. Now they find out that they have to underwrite $75m worth of loans for the mining companies that are likely to make billions from the resource.
The money, part of a $180m borrowing, will be used by Tamboran and Beetaloo Energy Australia for a compression facility.
Economist Don Fuller, who has extensive experience at top government levels in the NT, asks: "Why should the government be exposed to risk?
“The Northern Australia Infrastructure Facility has loan funds available.
“If things are as rosy as that, the private lending market is there. The government’s intervention in that market is not necessary."
Prof Fuller says after gas purchases from several companies, the NT is now saddled with multiple “take or pay arrangements” – obliged to meet payments, at a high price, for gas it does not need.
Mining Minister Gerard Maley would not answer questions from the Alice Springs News about the form of the underwriting, why is it necessary, what happens if Tamboran defaults on its repayment of the $180m loan or part of it?
What will be the “royalties flowing into Territory services”?
Mr Maley claims: “The government is delivering tangible results to ensure gas for Territory homes, businesses, industry, and manufacturing."
But Prof Fuller asks: “What gas led economy?” Recent governments have not succeeded in establishing industries that could use the NT’s gas.
Darwin-born Andrew Liveris, who rose to chairman of Dow Chemicals and was an advisor to US Presidents Barack Obama and George Bush Jnr, formulated industry development plans for the Territory, but was ignored.
Meanwhile Lock the Gate Alliance NT spokesperson Pete Callender says information obtained through freedom of information reveals Empire Energy – now named Beetaloo Energy Australia – likely knew it was legally required to isolate two groundwater sources from each other and may have benefited from not doing so when it drilled and fracked in the Beetaloo Basin.
The Land, Planning, and Environment Department found the company was “moderately culpable”, "may have benefitted from non-compliance" and “the impact or risk of impact was due to poor standards of operation”.
Despite this, the department responded to the breach by sending a letter reminding the company that it needed to comply with its Environmental Management Plan. A fine was considered “insufficient as a deterrent”.
[Prof Fuller is preparing a comprehensive report on Beetaloo gas for the Alice Springs News.]