This week’s announcement by Pangaea Resources that it is suspending its NT onshore gas exploration drilling program and laying off 140 workers, following the Labor Opposition’s indication that it will impose an indefinite moratorium on fracking, has provoked predictable responses from the Giles government and some mining industry types.
However you don’t need to be a one-eyed greenie to doubt the extent to which Pangaea’s announcement was actually caused by Michael Gunner’s fracking moratorium announcement. Only 6 out of a planned 25 onshore exploration wells were drilled throughout the Northern Territory during 2015, and oil and gas prices have fallen further since then. Only a very naive person would fail to realise that rock bottom oil and gas prices are the dominant factor in Pangaea’s decision. Nevertheless, Labor’s announcement may have been a subsidiary factor, if only in the timing of the announcement. After all, Labor currently looks odds on to win government in the Territory come August’s election, so if you’re a resource company now is the time to exert political pressure.
Whether Labor should take any notice is another question.
On the one hand it appears that shale fracking is a lot less risky than coal seam gas (it’s an issue I’ve written about before). However that hasn’t been enough to assuage widespread public concern. The recent NT government-commissioned Hawke Report found that “the environmental risks associated with hydraulic fracturing can be managed effectively subject to the creation of a robust regulatory regime.” It’s that final bold text [my emphasis] qualification that creates the problem as far as I’m concerned. The CLP government’s record for environmental regulation of the mining industry (and for that matter Labor’s) can hardly be described as “robust” and does nothing to inspire public confidence. Nor does the practical enforcement record of the NT Department of Mines and Energy inspire any greater confidence. Environmental disasters like the Montara oil spill and McArthur River Mine immediately spring to mind, not to mention running sores like the Ranger Uranium Mine, Redbank Copper Mine and numerous other examples.
Given Labor’s record in government of being just as gung ho about mining and just as lax about environmental protection as the CLP (e.g. it was the Martin Labor government that approved the disastrous move to open cut mining at McArthur River), a cynic would strongly suspect that Michael Gunner’s moratorium announcement is almost wholly electorally driven. However even if that is the case, a period when very little exploration or production drilling is likely anyway (due to rock bottom prices) is an ideal time to examine the situation thoroughly and put in place a genuinely robust regulatory regime that will ensure fracking takes place safely. Environmental groups will need to try to ensure that Labor does indeed implement a real review and regulatory/enforcement upgrade and doesn’t just use the moratorium as a cynical device to curry public favour and put off a decision to proceed on a “business as usual” basis until after the election.
That said, there will still be quite a few people who will continue to oppose shale fracking irrespective of the outcome of any review or the stringency of actions taken as a result. My own view is that onshore shale gas extraction should be facilitated if it can be done safely. Converting Australia’s dirty coal-fired power stations (especially the brown coal stations in Victoria) to a cleaner fuel is an essential part of any plausible greenhouse gas reduction strategy. Until totally clean, renewable baseload energy sources are developed and commercialised, converting existing coal-fired stations to gas (which will reduce carbon emissions by 30-50%) is the only obvious transitional strategy for achieving major reductions in Australia’s greenhouse footprint.