A Northern Territory environment group has launched a Federal Court challenge to millions of dollars of federal government funding awarded to gas companies to fund controversial exploration works in the Beetaloo Basin.
Earlier in July, federal resources minister Keith Pitt signed off on $21 million in grants to Imperial Oil and Gas, to fund the drilling of three new gas wells in the Northern Territory’s Beetaloo Basin.
Plans to develop the Beetaloo Basin have attracted strong opposition from environment groups due to significant greenhouse gas emissions the new gas projects would cause and opposition from some First Nations groups to developments in sensitive parts of the NT.
A legal challenge to the grant funding has been launched by the Environment Centre of the Northern Territory in the Federal Court, where it will argue that the grants provided by the Morrison government are in breach of federal grant laws.
The environment group will argue that the grants are inconsistent with legislative requirements that seek to ensure the expenditure of public funds is in the public interest and that Pitt failed to properly consider the climate change related risks of increasing fossil fuel use.
“We want to see taxpayers money used wisely and with all the consequences being fully considered. Granting $21 million to a private fossil fuel company should only be done after all care is taken to examine the impacts on climate change, the environment and the community,” co-director of the Environment Centre NT Dr Kirsty Howey said.
“The law requires the Minister to be satisfied that the expenditure is a proper use of money having made reasonable inquiries. We say that means inquiries into the risks of a heating climate if the heart of the Northern Territory was opened up to fracking.”
“It’s not apparent from the available public documents that the Minister made any inquiries about the climate change risks of gas developments in the Beetaloo,” Dr Howey added.
All federal government grants are subject to the Public Governance, Performance and Accountability Act, which requires that federal ministers do not approve the use of public funds unless the minister “is satisfied, after making reasonable inquiries, that the expenditure would be a proper use of…money”.
The Act defines ‘proper’ as being “efficient, effective, economical and ethical”.
The Environmental Defenders Office, which will represent the environment group during the proceedings, said that it will argue that Pitt had failed to in his duties as a minister to consider the environmental and economic risks of giving public funds to gas companies to exploit new fossil fuel resources.
“This case is about whether the proper process has been followed in respect of the Federal Government’s decision to grant $21 million to Imperial Oil and Gas for exploration activities in the Beetaloo sub-basin in the Northern Territory,” Environmental Defenders Office CEO David Morris said.
“Our client will argue that before making a decision to grant these funds, the relevant Minister needed to make reasonable inquiries into a range of risks, including climate and economic risks, that may arise from the expenditure.”
“We will argue on behalf of our client that the Federal Government did not make these reasonable inquiries, and thus the Minister’s decision is invalid.”
The company receiving the grant funding – Imperial Oil and Gas – is a subsidiary of Empire Energy, a gas company chaired by Paul Espie, who has established strong ties with the federal Liberal party, including as chair of the party-aligned think tank the Menzies Research Centre.
The grant, and Espie’s potential involvement in the decisions to award the funding to Empire Energy, have attracted significant scrutiny, given that Espie is also a substantial financial contributor to Liberal and Nationals parties.
Empire Energy executives were pressed about the circumstances of the grants being awarded to the company during parliamentary committee hearings on Wednesday.
The executives acknowledged the close links between the company’s chairman and the Liberal party but denied that there had been any improper influence over the decision to award the $21 million in grant funding to fund the drilling of gas wells in the Beetaloo Basin.
The legal challenge comes as federal environment minister Sussan Ley is in the process of appealing an earlier ruling of the Federal Court, which ruled she owed young people a duty of care to protect them from the impacts of climate change when exercising powers under federal environment laws.
Ley disputes that she owes young people that duty.