Northern Territory Treasurer Eva Lawler has insisted an ambitious economic target is still on track despite disruptions to major gas projects.
Core items:
- Two large NT gas projects experienced disruptions last week
- The NT government relies on large gas projects to meet its 2030 goal of a $40 billion economy
- Experts say the government should focus on investing in renewable projects
Recent decisions involving gas giants Origin and Santos have raised questions about the future of gas in the area, where mining and manufacturing accounts for about a quarter of the state’s gross product.
But Ms Lawler said she remains confident the territory’s economy will grow to the $40 billion target by the end of the decade – up from the current $26 billion.
“To move this forward, we have been working on a number of major projects, both government and private sector,” she said in a statement.
“We haven’t pinned all of our prospects to a single company or resource.”
However, some observers say the separate restructurings have highlighted the risk of a continued focus on the oil and gas sector.
“You’ve seen how quickly the carpet can be pulled – two big projects in a single week,” said Eytan Lenko, a renewable energy advocate who recently served on a government economic task force.
“We’re on much safer ground as we face the future and foster projects that are future-proof and benefit the economy over the long term, as opposed to things we know we need to phase out.”
Tamboran Investment shows vote of confidence: Industry
After years of exploring the region, Origin sold its gas exploration interests in the Beetaloo Basin at a multimillion-dollar loss last week to focus on other priorities, including the clean energy transition.
Days later, federal court vacated a permit for a major offshore project spearheaded by Santos after traditional owners halted drilling on a $4.7 billion project the company previously described as the largest investment in the US Australian oil and gas industry for almost a decade.
The national top oil and gas regulator has dismissed suggestions that Origin’s exit heralds a diminishing role for gas, instead rewording a decision by gas company Tamboran to buy its shares as a vote of confidence.
“The gas industry has been a key driver of the Northern Territory’s economy and that hasn’t changed in the past week,” said Samantha McCulloch of the Australian Petroleum Production and Exploration Association.
“Among the announcements we saw this week was Tamboran’s intention to invest $60 million in the Beetaloo Basin so the industry will continue to invest in the territory now and in the future.
“Onshore and offshore gas can play a very important role in this [2030] Target.”
Santos announced his intention to appeal the court decision, saying: “The uncertainty surrounding project approval is a public policy issue that should be urgently addressed by Australian governments to reduce risk to trade and investment in projects across the country to reduce”.
A spokesman for Federal Resources Secretary Madeleine King said the federal government is considering the implications of the ruling.
“It is up to Santos to consider what the decision on the Barossa project means,” her spokeswoman said in a statement.
Renewable energies could help to achieve the goal
The post-coronavirus economic taskforce that set the 2030 target encouraged the government to achieve it by aggressively targeting private investment.
Their report emphasized the role of the territory’s gas reserves in sustaining the economy during the transition to renewable energy.
But Mr. Lenko, who was a member of the taskforce, said investing in renewable energy could get the government on track.
“Hopefully the penny of this gas isn’t as safe as they thought and there are a lot of resources in government working to develop the gas industry,” he said.
“Those resources really should be repurposed to help push the renewable energy side of the economy much further.”
APPEA said gas would play a long-term role as coal-fired power generation phased out nationwide.
The government has signed a number of deals related to green hydrogen, carbon capture and storage, and electric vehicle battery manufacturing with private companies in recent months.
The territory’s gross government product grew 6 percent to $26.3 billion in 2019-20, then declined slightly to $26.2 billion in the following fiscal year.
