Over the last two years, the Senate Environment and Communications Committee have gathered data and views from stakeholders concerning the oil and gas industry in the Beetaloo Sub-basin of the Northern Territory. 

The inquiry was chaired by Greens senator Sarah Hanson-Young and included one other Greens senator, Dorinda Cox. There were four Labor members, five Liberal-National members, and one independent (former Greens member Lidia Thorpe) included in the inquiry. 

Over recent months, the Greens have campaigned against gas production in the Beetaloo, with little success. The Albanese government has not struck out any form of new oil and gas during negotiations.

In their dissenting report to the inquiry's final publication, the Liberal-National members of the committee declared the inquiry an "ideological crusade" run by the Greens against development of the Northern Territory's onshore gas resource potential. 

"Coalition Senators remain unable to support the majority report, which offers no substantially new evidence or perspectives since the August 2021 Interim Report and continues to be ‘characterised by overtly political and ideological selection of evidence, resulting in biased conclusions and recommendations being made on the basis of unfounded imputations," dissenting members wrote. 

The final report, supported by the Greens and Labor members, makes 14 additional recommendations to the six contained in the interim report tabled over a year ago. The federal government will consider each recommendation in turn, in due course. 

The Russian Oligarch 

The inquiry found it was inappropriate for Tamboran Resources' joint venture partner Falcon Oil and Gas to be 4% owned by a Russian oligarch, Viktor Vekselberg, and receive funds from the Commonwealth Beetaloo Cooperative Drilling Program, which helped finance exploration drilling activities in the Beetaloo.

However, the report noted the Department of Foreign Affairs and Trade found the venture was not in breach of sanctions. 

"The committee is not able to determine whether Australia's sanctions law captures Mr Vekselberg's beneficial interest in Falcon," it said. 

The committee recommended the government increase the transparency of beneficial ownership of companies and make this public. This recommendation is partially complete, with a new foreign ownership register to be established from July 1. 

This register will require all foreign domiciled companies to notify the Australian Tax Office of their ownership of any Australian assets, including exploration and production tenements. However, the register will not be made publicly available, as recommended by the Greens-Labor committee. 

Middle Arm as a Beetaloo gas export point 

During the dying months of the former Morrison government, then-Treasurer Josh Frydenberg committed A$2 billion in the annual budget for the development of gas infrastructure at Middle Arm of Darwin Harbour. 

In a "mini-budget" after the following election when Labor swept to power, the Albanese government reaffirmed this, but cut $100 million from this expenditure, with a $1.9 billion in investment for Middle Arm.

This has been a sticking point for the Greens, which hold a balance of power in the Senate and have previously attempted to wedge the government on the issue. 

In the report, the committee said it recognised consecutive governments' support for LNG exports from Middle Arm. 

"In view of the significant Commonwealth and Territory investment, the committee suggests that the Senate should exercise more detailed oversight of the Australian Government's expenditure on this project," the committee said. 

This "detailed oversight" according to the Greens-led committee, should take the form of a further inquiry. 

Water supply for Beetaloo gas producers

In the final report, the committee declared Australia the "driest place on the planet" and said any expanded onshore gas industry needed to pay substantially for access to water reservoirs. 

As part of the Northern Territory's regulatory framework, based on the Pepper Inquiry into fraccing, the Georgina Wise Water Allocation Plan was installed. 

Currently, the NT government charges gas companies a $3,000 flat fee for groundwater licences for fraccing operations. This is an interim measure, while the government considers future legislation. 

However, documents dating back to 2020 written by the then director of water planning, Tim Bond, warned that current water allocation rules could eventually cause water flows to the Roper River to move in the opposite direction. This was based on industry using 80% of the Mataranka Tindall Limestone Aquifer in the Beetaloo over a 100-year period. 

A key recommendation by the Senate inquiry was to update the Environment Protection and Biodiversity Conservation Act (EPBC). Previously, the EPBC Act - which is the nation's overarching environmental law - did not include a water trigger for unconventional oil and gas production. 

The government has taken this recommendation and is amending the EPBC, however the committee demanded in its report that the government act faster to have the trigger in place by end of year. 

Additionally, the committee called on the government to fund an inter-departmental study of the impacts to water resources in the Beetaloo. 

"Given the importance of water to the various communities in and around the Beetaloo, as well as First Nations people with cultural connections in the area, the committee considers that the Australian Government should fund a further research study of the impacts to water resources in the Territory arising from the gas exploration and potential production in the Beetaloo," the committee said. 

"The committee recognises that it would be highly detrimental to deplete or contaminate the valuable water resources of the Territory." 

Scientific Inquiry into Hydraulic Fracturing in the Northern Territory

The Northern Territory's independent Scientific Inquiry into Hydraulic Fracturing of Onshore Unconventional Reservoirs (Pepper Inquiry) in the Northern Territory handed down its final report in March of 2018. 

It contained 135 recommendations to be implemented to ensure safely regulated fraccing operations across the Beetaloo. The committee found 75% of the Pepper Inquiry recommendations had been completed and the remaining 25% were still underway. 

The Territory government said these would be completed soon, allowing for production approvals to be granted to Beetaloo explorers as soon as this year. 

The committee said the NT government needed to "expedite full implementation" of all outstanding recommendations. 

Enacting the Safeguard Mechanism reforms 

Last month, the Albanese Labor government secured support from the Greens, which hold the balance of power in the Senate, to pass its Safeguard Mechanism reforms.

As part of the deal, the Greens were successful in lobbying for a "climate trigger" requiring the climate change minister to personally assess and approve gas projects. The Greens also locked in a provision that all new oil and gas project in the Northern Territory Beetaloo Sub-Basin would need to be net-zero scope 1 emissions from day one of production. This means, all CO2 from reservoirs needs to be mitigated from first commercial production. Not scope 2, or scope 3. 

Following the announcement of the deal, the two project developers in the Beetaloo - Tamboran Resources and Empire Energy - both experienced share price falls by close of trade.

However, when questioned by Energy News following the safeguard mechanism announcement, both Tamboran and Empire management said their respective projects were in no way compromised.

CO2 content in Beetaloo reservoirs is marginal compared to offshore projects such as Santos' Barossa project. 

The 2017 Northern Territory Pepper Inquiry into Beetaloo gas found that reservoirs in the sub-basin typically amounted to between 1% and 3%. In stark contrast, the Barossa fields have between 20% and 30% reservoir CO2.

Tamboran CEO Joel Riddle said in a statement to Energy News, he welcomed the safeguard mechanism requirement, as it provided investment certainty.

"The Safeguard Mechanism amendments legislate the existing Net Zero vision Tamboran has for the Beetaloo Basin and is a vindication of our industry-leading plan for sustainable development," Riddle said.

"Tamboran is already leveraging the low carbon gas we have the Beetaloo Basin to be Net Zero in our Company's Scope 1 and 2 emissions from first commercial production."

Fellow Beetaloo gas developer Empire Energy was of a similar opinion.

"With less than 1% CO2 contained in our Beetaloo gas resource, the challenge of offsetting the emissions of our development is significantly lower than other gas sources," managing director Alex Underwood told Energy News.

The final report handed down by the committee inquiry demands the NT and federal governments to create a "regulatory framework" to implement net zero scope 1 emissions laws for Beetaloo gas companies. 

"The committee recommends that the Australian Government, in collaboration with other members of the Energy and Climate Change Ministerial Council, prioritise developing a national approach to offsetting all Scope 2 and Scope 3 greenhouse gas emissions from shale gas production in the Beetaloo," it said. 

The safeguard mechanism requires Australia's biggest emitters to reduce their emissions by 4.9% every year to 2030. 

The committee claimed in the report that Beetaloo gas developers could quickly become major emitters, and that production facilities may need to be classified as such. It recommended the NT government reconsider the industrial project threshold to capture Beetaloo projects. 

Inquiry finds no major pastoralist problem 

During the two-year long inquiry, the committee heard evidence from activist pastoralists including Rallen Australia. 

Cattle business Rallen Australia is owned by one of South Africa's richest families - the Langenhovens.

The pastoral company has a long running dispute with Beetaloo gas proponent Tamboran Resources which ended in the Supreme Court, ultimately won by Tamboran allowing it to continue its exploration activities. 

When giving evidence, Rallen owner Pierre Langenhoven claimed oil and gas exploitation in the Beetaloo could not co-exist with running cattle.

"Where the cattle industry cares about what happens on top of the land, including the water, the gas industry cares about what happens underneath and they use the water as a commodity," he claimed. 

"With the seismic testing, they cut the paddock up into segments, so we won't be able to muster, the cattle won't go to the water because there's too much traffic … it will have an impact on managing our herd."

While Rallen was vocal about its opposition to gas production in the Beetaloo, other pastoralists were supportive during hearings. 

The owner of Birdum Creek Station, Rohan Sullivan, described his positive experiences with the gas industry, including in negotiations with Empire Energy for a land access and compensation agreement. 

"I believe there's recognition of the rights of the different parties to operate on the land and the need to coexist and cooperate, provided that certain conditions are met," Sullivan said. 

The Northern Territory Farmers Association also gave evidence during the inquiry. 

NTFA chief executive Paul Burke advised that his organisation would support the development of the gas industry in the Territory but on the "very big proviso" that all recommendations of the Pepper Inquiry are fully implemented. 

Elsewhere in the Beetaloo, billionaire pastoralist Brett Blundy has put his world-famous cattle Beetaloo Aggregation and Walhallow stations in the Beetaloo Sub-Basin on the market.

Blundy's Beetaloo Aggregation is regarded as one of the best stations in the Top End and covers a significant portion of Tamboran's exploration permit EP136. Walhallow meanwhile covers EP169 operated by Empire. 

Native Title Holders and Traditional Owners need more consultation 

An area of improvement identified by the Senate inquiry was consultation with Traditional Owners and Native Title Holders in the Beetaloo region. This is not for lack of trying, Empire Energy MD Alex Underwood went so far as to fly his family to the Beetaloo to meet Traditional Owners and Native Title Holders before the company began physical activities in the basin. 

The Aboriginal Land Rights (Northern Territory) Act 1976 gives Traditional Owners the right to be consulted about, and to consent, or refuse to consent, to the grant of an exploration permit. However, these stakeholders cannot withhold consent. In cases where gas companies and Native Title holder's cannot reach agreement, arbitration is conducted.  

Activists from the Environmental Defenders Office claimed this inability to simply veto projects, created an "inherent power imbalance".

The committee said consultation processes are either failing, or perceived to be failing, some of the Traditional Owners and Native Title holders in the Beetaloo.

"The committee acknowledges the complexity in identifying who must be consulted for consent purposes," it said in its report. 

"However, in the committee's view, this appears to be a long-standing, deeply-rooted and highly contentious issue that must be more fully investigated and resolved."

Part of the issue, according to the report, was that different Aboriginal entities had difficulty identifying who was a legitimate Native Title Holder in the region. 

"Given the concerns expressed by the Nurrdalinji Corporation, the committee is of the view that the NLC and the Top End PBC must work more constructively with the Traditional Owners and Native Title holders in the Beetaloo, to ensure that there is a common understanding of who must be consulted in relation to proposed gas activities," the committee said. 

The core recommendation by the inquiry was that if need be, a new prescribed body corporate for Traditional Owners with native title interests and rights would have to be established. 

The committee also found there is scant mapping of sacred sites in the Beetaloo. 

"These knowledge gaps could lead to inadvertent and irreparable damage to the sites by shale gas developments, and ultimately operations, in the region," the committee said in its report. 

It called on the NT government to increase funding for the Aboriginal Areas Protection Authority to identify, manage and protect sacred sites. It did not stipulate how much this could cost, however. 

Further, the inquiry called on the Territory government to strengthen its Northern Territory Aboriginal Sacred Sites Act 1989. This would introduce "stop work orders" where sacred sites were at risk of damage. 

Industry could repay grants

While the final report contains significant recommendations which could take time to implement, if recommendations from an earlier interim report are adopted gas companies in the Beetaloo could be forced to pay back grants obtained under the Beetaloo Cooperative Drilling Program. 

The grant scheme allowed explorers to apply for a $7.5 million rebate on drilling costs and was established under the previous Liberal government. 

In the interim report, the committee recommended that the federal government require repayment of "any grant funding" if recipients discover and produce commercial quantities of gas from the Beetaloo.