Origin Energy has restarted fracking activities at its mammoth Beetaloo Basin project in the Northern Territory – after a pause triggered by Covid-19. It is a project that could single-handedly blow through Australia’s emissions reduction targets.
Origin Energy announced on Monday that it would commence fracking activities at the Kyalla well site, located nearby to Daly Waters, having completed drilling at the site in January before works were paused. The company said that it would undertake production testing over the coming months following ‘fracture stimulation’ (aka, fracking), at the site.
Origin had been forced to pause work at the Beetaloo site when Covid-19 hit earlier in the year, a decision which was likely motivated by a collapse in global gas prices in addition to concerns of spreading the virus in remote areas of the Northern Territory.
The controversial Beetaloo basin project has faced significant opposition, from environmental groups who fear the impacts the project will have on groundwater and greenhouse gas emissions, from Native Title holders over the process undertaken to gain consent for the project, and from energy market analysts who question the viability of pushing more gas into a volatile international gas market.
Origin’s general manager for Beetaloo and growth assets, Tracey Boyes, said that the company would undertake the work in line with both environmental and Covid-19 controls.
“Origin is pleased to be resuming exploration activity in line with the Northern Territory’s strict regulations to protect the environment and groundwater,” Boyes said.
“We have a robust COVID management plan and additional controls in place so we can continue to safely carry out our work. Our Beetaloo project is already creating local jobs and opportunities and if successful, has the potential to deliver long term economic benefits for the Northern Territory and Australia.”
The massive Beetaloo Basin project is seeking to tap into substantial gas reserves located south of Darwin, with estimates suggesting the basin holds enough gas to supply Australia for more than 200 years.
Beetaloo is one of up to five ‘Strategic Basin Plans’ being pursued by the Morrison government as part of its wider ‘gas led recovery’, which would also extend to developing the Narrabri gas reserves in New South Wales, and the North Bowen and Galilee Basins in Queensland.
The development of the Beetaloo Basin gas project appears to stand in contradiction with prime minister Scott Morrison’s claim that Australia could achieve a target of net zero emissions by the second half of the current century.
Origin’s announcement comes as The Guardian reports on the findings of a Grattan Institute report on gas markets, set to be released later in the year, which finds that less than 1 per cent of Australian manufacturing jobs are reliant on gas.
The early findings of the report raise serious questions about the ability for a boom in gas production to drive any significant economic recovery. The report found that around two-thirds of the gas currently used by Australian manufacturers is consumed by just 15 facilities that employ a little over 10,000 workers combined.
Australia’s major competition regulator, the ACCC, has described the Australian gas market as ‘dysfunctional’, with Australian consumers often paying significantly more for gas than overseas export customers, despite a massive surge in gas production.
Origin Energy has faced calls to cancel the Beetaloo basin project, given both the challenging economic environment for gas projects, which has seen more than $20 billion written off from the value of Australian gas projects this year, including $1.2 billion in write-downs to Origin Energy’s gas investments, as well as the substantial contribution the project will make to global greenhouse gas emissions.
The emissions caused by the Beetaloo basin project could also jeopardise Australia’s ability to meet its emissions reduction targets under the Paris Agreement.
Documents released in response to a freedom of information request showed that governments had been warned that fracking activities in the Northern Territory could produce an extra 39 to 117 million tonnes of greenhouse gas emissions in Australia, in addition to the emissions created when the gas is burnt.
Representing an increase in Australia’s emissions of between 7 and 22 per cent respectively, the Northern Territory fracking developments could more than undo any progress Australia has made towards meeting its emissions reduction targets.
Shareholder groups will gain press Origin Energy to review its plans to undertake gas fracking in the Northern Territory and will bring a motion to the company’s Annual General Meeting to be held in October. Shareholder groups will call on Origin to re-engage with Aboriginal Native Title holders and review the processes by which informed consent was obtained to undertake fracking on lands subject to Native Title.
