Northern Territory to cut red tape for gas development

MICHAEL Gunner’s Northern Territory government will slash red tape for the oil and gas industry in an attempt to keep the domestic economy afloat and take advantage of its vast resources in the onshore Beetaloo Sub-basin.
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Australia's Northern Territory is betting on a gas-fired recovery.

Paul Hunt

Senior Journalist: Energy & Commodities

Paul Hunt


On Friday, the Territory government announced a new Economic Reconstruction Commission, headed up by leading business figures, to slash red tape, create jobs, attract investment, and strengthen ties with trading partners. 

Martin Parkinson, a former secretary of the federal Department of the Treasury between March 2011 and 2014 will head up the commission.

He will be joined by Infrastructure Australia CEO Romilly Madew, former Westpac chief Gail Kelly, renewable energy expert Eytan Lenko, former Territory chief minister Paul Henderson and the former leader of the opposition Gary Higgins. 

Incidentally, Eytan Lenko appeared on the ABC Thursday night claiming that "gas was not the answer" to an economic recovery. This obviously flies in face of the Northern Territory government's position. 

The Commission will work under a scope outlined in the government's ‘Operation Rebound' green paper.  

In the paper the government signaled it would streamline development of critical industries, with a focus on "secure long-term domestic gas supply."

"The new economic circumstance has threatened delayed opportunities for greater development in some core sectors such as tourism and onshore gas," the government said. 

It comes as LNG exports to Japan fall to decade lows and Australia-China relations waiver in the face of an independent inquiry into the outbreak of COVID-19. 

"While economic activity and employment levels began to grow towards the end of 2019, the combination of travel restrictions and a collapse in oil and gas prices has delayed anticipated growth in key prospective sectors." 

In the Territory, the resources sector has suffered a 9.3% decrease in employment between March 14 and May 2, according to the NT Department of Treasury and Finance, a mix of both COVID-19 restrictions and general economic concerns to blame. 

Over the coming months the Territory government will support gas explorers "innovate and adapt to new market conditions." 

Exactly what these reforms will be rests at the feet of the new commission to work out. 

However, the government noted that it would try and expand its gas resources for other uses rather than just LNG exports. 

"Gas can not only be utilised to expand our LNG production capability, it can be a key industrial input for a variety of petrochemical products that can then be transformed into advanced manufactured productions." 

The Gunner government said it would look to use its "new onshore gas and large scale solar generation" projects to push a manufacturing hub in the Territory. 

The greenpaper specifically named Darwin as the home for an "advanced industrial cluster." 

The announcement of the new commission for economic recovery comes just a week after the Territory threw nearly $12 million at the oil and gas sector in the hope it could help fast-track onshore gas exploration. 

The leaked NCCC report from Canberra's COVID-19 recovery taskforce recommendations, of yesterday, suggest spurring Beetaloo development, and that Geoscience Australia could play a role in partnering with explorers, and a pipeline could be a key piece of infrastructure. 

The Territory's quarterly fiscal report shows a deficit of $540 million. 

As part of the government's recovery plan post COVID-19, it had brought forward $11.79 million worth of funding for oil and gas explorers and producers to encourage investment. 

The cash will be made available through the Strategic Regional Environmental Baseline Assessment program. 

Treasurer Manison said the costs would be "recouped through cost-recovery arrangement with industry."

Manison said the wad of money would provide "funding certainty" for the oil and gas industry. 

She also noted the government remained committed to implementing the Hydraulic Fracturing Recommendations from the scientific inquiry into fraccing which led to the lifting of the fraccing ban in the NT.