The future of hydraulic fracturing in the NT to be decided - Inquiry's Final Report released

The Final Report of the independent Scientific Inquiry into Hydraulic Fracturing of onshore unconventional reservoirs in the Northern Territory, released this week, provides expanded recommendations and specifies timing for implementation to mitigate the identified risks associated with any onshore shale gas development in the Territory to acceptable levels.

With the release of the Final Report, Justice Pepper who chaired the Inquiry, has stated that the Panel made its findings and recommendations based on the best most recent and relevant available evidence, which included the views of the community expressed during the consultation process.

The Panel has concluded that the NT Government needs to implement all of the recommendations presented in the Final Report and if this is not done, there can be no certainty that the risks associated with any onshore shale gas development in the Territory can be mitigated to acceptable levels.

What does the Final Report say?

We previously examined, the Inquiry's draft Final Report  in which the Panel concluded that if its recommendations in that report were adopted and implemented in full, the risks associated with hydraulic fracturing in the Territory will be mitigated or reduced to acceptable levels and in some instances avoided altogether. The Final Report reaffirms this conclusion.

The Final Report makes 135 recommendations compared to the 120 recommendations included in the draft Final Report. Generally, the recommendations in the draft Final Report have been brought forward into the Final Report, the key items of which were discussed in our review of the draft Final Report. However, more detail has been included in the Final Report, the aim of which is to strengthen many of the recommendations made in the draft Final Report.

Some key differences between the draft Final Report and the Final Report which we have identified at a glance include:

• Implementation timing: the inclusion of a timing trigger for the implementation of certain recommendations, being either 'prior to any further exploration approvals being granted' or 'before any production approvals are granted' when previously such timing was not specified. The specific details with respect to implementation timing are outlined below;
• Recommendation 7.1: this recommendation relates to amendment of the Water Act to require gas companies to obtain water extraction licences under that Act. Under the draft Final Report this recommendation was to be implemented before any production licence is granted to extract onshore shale gas, however under the Final Report the timing for implementation is now prior to the grant of any further exploration approvals;
• Recommendation 7.13: a new recommendation requiring a gas company undertaking any exploration activity or production activity to monitor the groundwater around each well pad to detect any groundwater contamination, adopting the monitoring outlined in Recommendation 7.11. If contamination is detected, remediation must commence immediately.
• Recommendation 7.14: a new recommendation that the NT Government undertakes a review to determine whether:
  • restrictions need to be placed on the transport of hydraulic fracturing chemicals and wastewater during the wet season, particularly on unsealed roads, to avoid the risk of spills; and
  • rail transport of some or all of the hydraulic fracturing chemicals and other consumables required, be used to avoid the risk of spills.
• Recommendation 7.19: The strategic regional environmental and baseline assessment (SREBA) that is to be undertaken for the Beetaloo Sub-basin must now, in addition to taking into account groundwater dependent ecosystems in the Roper River region, including identification and characterisation of aquatic ecosystems, provide measures to ensure the protection of these ecosystems;
• Recommendation 9.8: a new recommendation which requires that the NT and Australian governments seek to ensure that there is no net increase in the life cycle GHG emissions emitted in Australia from any onshore shale gas produced in the NT;
• Recommendation 10.2: the appropriate setback distances to minimise risks identified in HHRA reports, including potential pathways for waterborne and airborne contaminants, for all shale gas development (exploration and production) should not be less than 2 km. This was not less than 1,600m in the draft Final Report;
• Social impacts: a range of changes have been made with respect to the recommendations relating to social impacts. Most notably, ongoing monitoring and measurement of social and cumulative impacts is to be undertaken, with the results being made publicly available online as soon as they are available (Recommendation 12.5) and a strategic social impact assessment (SIA) is to be conducted as part of any SREBA to obtain essential baseline data (Recommendation 12.6) and that as part of the SREBA for the Beetaloo Sub-basin, a strategic SIA be conducted to obtain essential baseline data prior to the granting of any further production approvals (Recommendation 12.20);
• Recommendation 14.3: priority rather than just consideration, as required by the draft Final Report, is to be given areas of high tourism value, towns and residential areas (including areas that have assets of strategic importance to nearby residential areas), national parks, conservation reserves, areas of high ecological value, areas of cultural significance, and Indigenous Protected Areas with respect to not approving an application for an exploration permit where co-existence is not possible;
• Recommendation 14.5: this new recommendation requires that the NT Government immediately considers and implements mechanisms to retrospectively apply Recommendation 14.4 (declaring those areas listed above for recommendation 14.3 as reserved blocks, each with an appropriate buffer zone) to exploration permits hat have already been granted;
• Recommendation 14.30: a new recommendation that prior to the grant of any further production approvals, the Government is to enact provisions establishing a chain of responsibility for gas companies and related parties to ensure compliance with environmental obligations;
• SREBAs: new recommendations:
  • that the regulator oversees the auditing and the data-collection processes and provides a central repository for all data informing any SREBA (Recommendation 15.2); and
  • that a SREBA should be completed within five years from the first grant of exploration approvals and must be completed prior to the grant of any production approvals.

Implementation

In addition to the above changes, the Final Report contains a new implementation chapter which clarifies the timing for the implementation of various recommendations but, also notes that some risks must be mitigated immediately.

Of particular note, the Final Report specifies that the following recommendations must be implemented prior to any further exploration approvals being granted:

• Recommendation 5.1: Development and implementation of a code of practice for the decommissioning of onshore shale gas wells.
• Recommendation 5.3: Development and implementation of a code of practice to ensure the integrity of onshore shale gas wells.
• Recommendation 5.4: Well integrity management systems and plans mandated for all onshore shale gas wells to be hydraulically fractured.
• Recommendations 5.5 and 7.12: Development of a wastewater management framework, including an auditable system for tracking movements of wastewater.
• Recommendation 7.1: Gas companies must have a water extraction licence under the Water Act to extract water for hydraulic fracturing.
• Recommendation 7.6: Prohibition on the use of surface water for hydraulic fracturing.
• Recommendation 7.8: Prohibition on the installation of groundwater extraction bores to supply water for hydraulic fracturing within 1 km of an existing or proposed domestic or stock water supply bore.
• Recommendation 7.9: Prohibition on the reinjection of wastewater into deep aquifers and conventional reservoirs.
• Recommendation 7.10: Mandatory disclosure of all chemicals (including metals, salts and NORMs) in hydraulic fracturing fluids, flowback and produced water.
• Recommendations 7.11 and 7.13: Petroleum wells be constructed to at least Category 9 or equivalent. Prohibition on petroleum wells being drilled within 1 km of an existing or proposed groundwater supply bore. Groundwater must be monitored using multilevel monitoring bores.
• Recommendation 7.17: Prohibition on the discharge of treated or untreated wastewater into waterways.
• Recommendation 8.2: Completion of a baseline weed assessment in all areas of the exploration permit accessed by a gas company.
• Recommendation 8.3: Gas companies must have a dedicated weeds officer.
• Recommendation 8.4: Gas companies must have an approved weed management plan in place.
• Recommendation 9.2: Development and implementation of a code of practice for the ongoing monitoring of methane from shale gas wells.
• Recommendation 9.3: Monitoring of methane concentrations for a six month period.
• Recommendations 9.5 and 9.6: Requirement for ongoing methane monitoring and reporting.
• Recommendation 10.2: Prohibition on all exploration and production activity within 2 km of any habitable dwelling.
• Recommendation 11.1: Existence of an Authority Certificate.
• Recommendation 14.4: "No go zones" declared.
• Recommendation 14.15: The community must be given an opportunity to comment upon all draft environmental management plans submitted to the Government for approval.
• Recommendation 14.16: Requirement that all reports and notices on environmental incidents are publicly disclosed.
• Recommendation 14.18: Enforceable codes of practice be mandated for drilling and hydraulic fracturing activities.
• Recommendation 14.19: Cumulative impacts of petroleum and other activities in the region must be considered by a decision-maker.
• Recommendation 14.23: Open standing for judicial review of decisions made under the Petroleum Act and Petroleum Environment Regulations.
• Recommendation 14.26: A monitoring and compliance strategy must be developed and implemented.
• Recommendation 14.27: A whistleblower hotline must be established and any reports to it must be immediately investigated.
• Recommendation 14.34: There must be a clear separation between the agencies responsible for environmental and promotional approvals.

The Final Report states that the remaining recommendations in the Final Report are to be implemented before any production approvals are granted.

The Final Report also makes the following additional recommendations with respect to implementation:

• an implementation framework be completed within three months from any lifting of the moratorium;
• a Unit be established immediately within the Department of Chief Minister to coordinate the development of the implementation framework; and
• a Community and Onshore Shale Gas Industry and Business Reference Group be established.

What does the Inquiry's Final Report mean for fracking in the NT?

The draft Final Report does not recommend whether or not the NT Government should lift the moratorium as this was outside the scope of the Inquiry.

Chief Minister Michael Gunner has stated that the NT Government will now carefully consider the report’s recommendations and take as long as is needed to make the right decision for the Territory and will not put at risk existing fishing, farming, tourism and cattle jobs for the possibility of jobs from fracking.

Consistent with the NT Government's position throughout the duration of the Inquiry, Chief Minister Gunner has reconfirmed that once the NT Government has considered the Inquiry's Final Report it will make its decision to either ban fracking in the Northern Territory or allow it in highly regulated circumstances in tightly prescribed areas.

If you would like any further information regarding the Inquiry's Final Report please contact us.

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