Economies of shale: submission on the draft report of the Scientific Inquiry into Hydraulic Fracturing in the Northern Territory

Energy resources Natural gas Fracking Shale gas Northern Territory

The Australia Institute welcomes the opportunity to make a submission on the Draft Report of the Scientific Inquiry into Hydraulic Fracturing in the Northern Territory (the Inquiry). This submission focuses on Chapter 13 Economic Impacts of the Draft Report and the report by ACIL Allen, The economic impacts of a potential shale gas development in the Northern Territory (the ACIL report), commissioned by the Inquiry. A separate Australia Institute submission addresses the Draft Report’s treatment of methane emissions.

The Australia Institute has been involved in earlier parts of the Inquiry, making a written submission, appearing at a Darwin public hearing and in consultation with ACIL. Overall, our view is that unconventional gas in the Territory is unlikely to provide significant economic benefit and comes with substantial risks. Our view is supported by the ACIL report which states that there is “very high probability” that an unconventional gas industry would “fail to commercialise” in the NT (“Shale Calm” scenario). It also states there is “very low” or “low” probability of their highest production scenario (“Shale Gale” scenario).

Even in the low-probability Gale Scenario, ACIL estimate direct and indirect employment in the NT would be only 524 full time equivalent jobs higher than their baseline case. This represents just half of one percent of employment in the NT. Similarly, ACIL estimates that the Gale Scenario would see an increase in Territory Government revenue of $143.2 million per year, just 2% of budget revenue. The high or very high probability scenarios would increase Territory revenues by between zero and $29.1 million per year, a fraction of one percent.

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