Discussion paper

Fracking and slacking

NT Government subsidies to onshore oil and gas
Coal seam gas Shale gas Environmental monitoring Fracking Government accountability Oil Northern Territory
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The onshore oil and gas industry in the Northern Territory is subsidised by the Territory Government. This was highlighted by the NT Fracking Inquiry which showed that costs of administering the industry are not recovered by the fees paid according to the Territory’s budget papers. Costs of administering the applications, fees and titles of the industry average $2.7 million while fees paid are almost certain to be less than $500,000 per year. The Fracking Inquiry recommended implementing a cost-recovery fee system but, two years on, these reforms are “still at the planning stage”.

The Fracking Inquiry only scratched the surface of assistance to onshore oil and gas shown in the NT Government budget papers and beyond. Wider administrative costs, including running the Fracking Inquiry, implementing its recommendations and improving assessment capacity, have cost the Territory Government $11.6 million over the last decade.

Key findings:

  • The NT Fracking Inquiry recommended industry fees should cover growing administration expenses. The government’s process is “still at the planning stage”.
  • Unrecovered administration costs totalled at least $33.6 million.
  • Subsidised exploration and industry promotion cost at least $60.4 million.
  • Instead of funding the onshore oil and gas industry, this money could have paid the salaries of 104 nurses, 94 teachers or 94 Aboriginal health practitioners.
  • Royalties are unlikely to ever cover these costs according to the Fracking Inquiry economic assessment.
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