Net zero policy for new gas projects abandoned after industry objected

net zero policy for new gas projects abandoned after industry objected

Photograph: Mike Bowers/The Guardian

The Northern Territory government walked away from a proposal to set net zero emissions requirements for new onshore gas developments after the industry objected, government documents show.

Letters and emails released to Guardian Australia under freedom of information laws show the Fyles government quietly consulted the gas industry in late 2022 about a plan to meet the key climate recommendation from a scientific inquiry into fracking. Other key stakeholders and the public do not appear to have been consulted about the proposal.

“It isn’t every day that we obtain this level of insight into the direct influence that the fossil fuel sector has on the climate policies of Australian governments,” said Harriet Kater, special adviser at the Australasian Centre for Corporate Responsibility.

“Unfortunately this has a strong sense of being the tip of the iceberg.

“The unchecked influence of the fossil fuel sector on policymakers is a primary reason that emissions continue to rise on a trajectory that is catastrophic for human safety.”

Territory on the frontline

Communities in the NT are on the frontline of a proposed massive expansion of the gas industry. That expansion is advancing despite science and energy agencies, including the International Energy Agency, warning there can be no more exploitation of new oil, gas and coalfields if the world is to limit global heating to 1.5C.

By the middle of the century, the number of days above 35C is projected to at least double in many places across the territory. Research published this year projected Darwin could become too hot to live in within 50 years if the planet keeps warming at current rates.

In May this year, the NT government gave the greenlight for companies to apply for approval to commence gas production in the Beetaloo basin between Katherine and Tennant Creek. The government said it was satisfied it had met a commitment to deliver on all 135 recommendations of a territory-wide scientific inquiry into fracking.

That included the key climate commitment – recommendation 9.8 – that the NT and federal governments would “seek to ensure” that new onshore gas projects in the NT did not cause a net increase in Australia’s greenhouse gas emissions.

Guardian Australia has previously revealed that the NT government knew it could not meet this recommendation and sought the federal government’s help in September 2022.

New documents show that during that same month it was also contacting gas companies with a proposal to partially meet this commitment by regulating the upstream – or direct – emissions from production activities for gas projects.

Strong objections raised by industry

According to correspondence released by the NT environment department, the former environment and climate change minister Lauren Moss notified gas companies that the government had given “in-principle support to a policy approach that would require interest holders to achieve net zero greenhouse gas emissions for all upstream onshore shale gas production activities in the Territory”.

Senior bureaucrats wrote to companies including Santos, Inpex, Empire Energy, Hancock Prospecting and Top End Energy, seeking their feedback on the idea by late October 2022 before a submission was put to cabinet.

net zero policy for new gas projects abandoned after industry objected

Multiple gas companies raised objections directly to the NT government when asked to consult on a potential net zero policy. Photograph: Mike Bowers/The Guardian

The companies raised strong objections.

Empire Energy, one of the operators in the Beetaloo basin, wrote in an 18 October email to the department it had “numerous, serious concerns regarding the NT government’s proposed approach to implementation of recommendation 9.8”.

Inpex, which operates a liquefied natural gas (LNG) processing facility on Darwin harbour, wrote in a 25 October letter to Moss about “a number of concerns”. These included that the policy could “increase cost and complexity for proponents, without necessarily achieving improved outcomes”, and that the NT government’s introduction of a specific net zero requirement for shale gas production might set a “potential precedent” that could be applied more broadly to other industries and activities.

One email shows Santos executives met with senior NT bureaucrats to discuss the proposal on 28 October. Later, in a five-page letter dated 30 November, the company stated its “strong belief that the most effective and efficient way to Australia and the NT achieving their targets of net zero emissions by 2050 is to allow industry to find the best ways to decarbonise their businesses”.

The company warned the territory government’s proposed approach would “overlap” federal emissions targets and the safeguard mechanism.

“With the federal government having ruled out international offsets, it is highly unlikely that net zero GHG emissions could be achieved from day one of shale gas production,” the letter said.

“This position will lead to impacts on investment and may result in the development of the Beetaloo being delayed or not proceeding at all because other gas development provinces in Australia do not have this requirement.”

The company wrote “net zero Beetaloo emissions could result in global emissions going up” as without this gas, Russia and the Middle East would step in to fill a supply gap in Asia and Australia might also have to import gas.

A draft cabinet submission with a policy position on how the government would meet the inquiry’s key climate recommendation was “developed following consultation with, and taking into consideration, the views of industry”, according to a 21 November departmental email.

On 14 December, a day before the submission was due to go to cabinet, an email between senior bureaucrats referenced the 30 November letter from Santos and stated “the correspondence and prior discussion with Santos has informed the submission on recommendation 9.8 of the hydraulic fracturing inquiry”.

‘A complete breach of trust’

It is not clear what was in the submission that ultimately went to cabinet because the material was withheld under a cabinet exemption in freedom of information laws.

What is clear is that a territory-level policy to restrict direct emissions from gas production to net zero was never implemented.

NT voters did not have a chance to give views on the proposal, nor did other important external stakeholders.

net zero policy for new gas projects abandoned after industry objected

‘This is a deeply alarming revelation’, says Kirsty Howey, the executive director of the Environment Centre in the Northern Territory. Photograph: Mike Bowers/The Guardian

The Central Land Council and the three environmental peak bodies that receive funding to participate in the NT government’s environmental reform program – the Environment Centre of the Northern Territory (ECNT), the Environmental Defenders Office (EDO) and the Arid Lands Environment Centre (ALEC) – all said they first learned the NT government had considered setting a net zero requirement for direct emissions from gas production activities when Guardian Australia contacted them to ask about it.

“This is a deeply alarming revelation that confirms the extraordinary influence the gas industry has on the NT government,” Kirsty Howey, the ECNT’s executive director, said. “To discover that the NT government has secretly consulted the gas industry about its most important climate policy, and not even bothered to tell the public, let alone consult us beforehand, is absolutely galling and a complete breach of trust.

“This isn’t an abstract issue for the people of the Northern Territory. We are facing unliveability due to climate change, supercharged by carbon bombs like fracking in the Beetaloo basin.”

Adrian Tomlinson, the chief executive of ALEC, said on an issue as serious as climate change the government should make decisions that were in the best interests of the public.

“It’s not just that one stakeholder was consulted. It was a stakeholder that had a very significant financial interest in the outcome of that policy,” he said.

Views of other stakeholders ‘well documented’

The public policy statement that contains the NT government’s final position on reducing the climate risks of onshore gas projects requires companies to submit a greenhouse gas abatement plan to the NT environment minister before commencing production and to demonstrate operations would be net zero by 2050 at a minimum.

This position was discussed in an internal NT environment department communications strategy dated 8 November 2022. Under “potential issues and sensitivities”, the key message suggested to justify this approach was it would give stakeholders and the community certainty and “interest holders will be able to determine how they will manage their own emissions to meet a minimum target of net zero by 2050 in accordance with NT and Australian laws and regulations”.

net zero policy for new gas projects abandoned after industry objected

The NT government says it considered the views of other stakeholders as they were ‘well-documented and known through recent consultation on other policies’. Photograph: Mike Bowers/The Guardian

None of the correspondence released to Guardian Australia suggests federal departments or ministers were aware the NT government considered setting its own net zero emissions requirement for direct emissions from gas production.

It was ultimately left to the federal climate change and energy minister, Chris Bowen, and the Greens to negotiate a similar policy as part of a deal to secure the minor party’s support for changes to the safeguard mechanism. Amendments that passed parliament in March this year legislated a requirement for direct emissions (scope 1) from new gas fields and from new entrants in the Beetaloo to be net zero.

This alone does not address the fracking inquiry’s most important climate recommendation in its entirety because it does not capture scope 2 emissions – the energy used by gas companies – or domestic scope 3 emissions from when the gas is sold and burnt.

That remains an item on the agenda for discussion at the energy and climate change ministerial council for federal, state and territory climate and energy ministers.

A spokesperson for the NT government said “it would be misleading to suggest that a single viewpoint was considered in the development of the NT’s policy on the management of greenhouse gas emissions from the onshore gas industry”.

“The minister consulted with industry to inform the NT government’s policy position,” they said.

The spokesperson said the former environment and climate change minister had considered the views of other stakeholders, including land councils and environment groups. They said these views were “were well documented and known through recent consultation on other policies” including a policy for new and expanding large emitters and a policy on carbon offsets for greenhouse gas emissions.

They said the NT government also considered the role of the federal government in regulating emissions under the safeguard mechanism and “a desire to complement the Australian government’s approach to requiring net zero scope 1 emissions from gas activities in the Beetaloo subbasin”.

“Combined, the NT policy and Australian government’s safeguard mechanism set a higher regulatory bar for greenhouse gas emissions management from this industry than other Australian jurisdictions,” they said.

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