19 Mar 2015

Northern Territory fracking report released

by Margaret Michaels, Stuart MacGregor, James Penrose

The Independent Inquiry into Hydraulic Fracturing in the Northern Territory has found that the environmental risks associated with fracking can be managed effectively by a robust regulatory regime.

The Report of the Independent Inquiry into Hydraulic Fracturing in the Northern Territory has been released. Its major recommendation is that, consistent with other reviews undertaken abroad and in other parts of Australia, "hydraulic fracturing can be managed effectively subject to the creation of a robust regulatory regime".

The Inquiry's terms of reference

The Northern Territory Government established the Inquiry last year to undertake an investigation into hydraulic fracturing for hydrocarbon deposits in the Northern Territory. A thorough study of the potential environmental effects of fracking was a chief concern of the Inquiry.

To that end, the terms of reference set down by the Chief Minister included:

  • to separate the proven evidence about environmental risk from the myths and to give an accurate picture based on science; and
  • to provide recommendations on whether steps should be taken to mitigate any potential impacts of fracking.

Findings and recommendations

The Inquiry noted community concern regarding the environmental impact of fracking but concluded that the weight of expert opinion indicates that there is no justification whatsoever for the imposition of a moratorium in the Northern Territory.

In the event that there are exploitable commercial quantities of shale gas in the Northern Territory, the Inquiry acknowledges that it will take some time for production to be reached. The Report canvasses a number of options for transporting product to market, including:

  • the development of an LNG train in Darwin to take the gas; and
  • extending the north-south pipeline to Mount Isa or Moomba to link with the eastern seaboard grid.

In order to ensure that environmental concerns are adequately addressed, the Inquiry recommends that a Cabinet Sub-Committee be established to oversee the processes relevant to establishing a best practice regulatory regime.

Other recommendations made by the Inquiry include:

  • that the Environmental Assessment Act be restructured; and
  • that consideration should be given as to whether the petroleum and mineral royalty frameworks should be aligned.

The Government has indicated that it broadly accepts all of the recommendations contained in the Report.


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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.