Regulation of shale gas in the Beetaloo Basin, the federal Safeguard Mechanism and Pepper Inquiry recommendation 9.8

Key points

• The 2018 Pepper Inquiry was unequivocal: Australian lifecycle emissions from development of the shale gas industry in the NT must be fully offset. Wherever they occur in the country, the firm opinion of the expert panel was that mitigating the risks associated with development of the shale gas industry in the Northern Territory (NT) required the full lifecycle emissions from producing, processing and use of the fossil fuel to be fully offset.
• Despite their promises to meet this recommendation, it has almost entirely been repudiated by the federal and NT governments. Notwithstanding past bipartisan commitments made at both the NT and federal level, neither government has taken the necessary steps to deliver against this Inquiry recommendation. The federal Safeguard Mechanism is manifestly insufficient to deliver against recommendation 9.8 in full and is the only relevant scheme in place at either level of government.
• More than 95% of emissions from the Beetaloo Basin this decade attract no offset requirement. Aggregate lifecycle emissions across the four most advanced shale gas projects in the NT will reach well over 6 million tonnes across the projects’ operating lives: an amount roughly equivalent to the climate pollution created by the NT’s power sector every year. Under recommendation 9.8, these emissions should be offset in their entirety. Instead, across the projects’ operating lives just 269,000 tonnes will be offset: less than 5%.
• As poor as this performance already is, even this is a likely overestimate. The 6 million tonne figure given above does not include end-use emissions from appraisal gas expected to be sold from Santos’s Beetaloo operations to the NT Government. While not yet disclosed, these end-use emissions are also likely to be exempt from offsetting requirements in their entirety, pushing the share of emissions that avoid offset requirements higher still.

This analysis was produced with the support of Environment Centre NT in line with their charitable objects.

Offsets expected from the four most advanced projects in the Beetaloo Basin

Important information: It should be noted that there are long-standing critiques of offsetting as an approach to managing greenhouse gas emissions, both in Australia and overseas. These criticisms are principled, important, and most often simply correct. Even before considering multifarious discrete scientific and bureaucratic integrity issues within individual offset methods, the trade in offsets is at its heart based on a false equivalence that is frequently irredeemable, particularly when those offsets straddle the difficult barrier between fossil fuel emissions sources and land sector carbon sequestration.

However, these issues go further than what was considered by the Pepper Inquiry, and as such were set aside for the purposes of this analysis. Instead, this analysis tests whether existing policy measures are capable of meeting recommendation 9.8 on the final report’s own terms without applying an additional interpretive lens over the top.