The announcement of a deal about the Safeguard Mechanism today sounds the death knell for new gas projects in the Northern Territory – including the Beetaloo and Barossa projects - claims the NT’s peak conservation body.

The Greens announced today they have secured a deal which places a hard cap on emissions, and:

• requires all scope 1 (extraction and processing) emissions from the Beetaloo to be net zero, with scope 2 and 3 emissions to be referred to the Ministerial Energy Council;
• requires all new gas fields for LNG export (including Santos’ Barossa project) to have net zero carbon dioxide emissions from day 1.
• requires corporations to justify their use of offsets if they use offsets for more than 30% of their baseline.

The Environment Centre NT says that this deal makes the NT’s keystone gas projects – the Beetaloo and Barossa projects – unviable due to the prohibitive cost of mitigating and offsetting the emissions from these projects. Under the deal:

• up to 22 million tonnes per annum of Scope 1 GHG emissions will need to be fully avoided/mitigated/offset from the Beetaloo Basin. At the current spot price of $36.50 per tonne, this would cost $803m per annum to offset (but could be as high as $1.65 billion per annum at the cap of $75 per tonne).
• Up to 5.43 million tonnes per annum of Scope 1 GHG emissions will need to be fully avoided/mitigated/offset from the Barossa gasfield. At the current spot price this would cost $198 million per annum to offset (but could be as high as $407 million if it hits the cap).

Kirsty Howey, Executive Director of Environment Centre NT:

“The Safeguard Mechanism deal sounds the death knell for the Northern Territory’s flagship carbon bombs – the Beetaloo and Barossa projects.”

“The emissions associated with these projects are so huge that requiring extraction and processing emissions to be fully offset will make them financially unviable. Investors are on notice: the Barossa and Beetaloo projects are dead and buried.”

“It leaves the Northern Territory Government’s Morrison-era plans for a gas-fired recovery out on a limb. It’s completely irresponsible for the Northern Territory Government to be pursuing these projects. They’ll leave Northern Territory taxpayers with nothing but more debts, stranded assets and climate disaster.

“While the Safeguard Deal is a welcome improvement, it doesn’t go far enough. The science is clear: we can’t have new fossil fuel projects and a safe climate.

ENDS 

For media enquiries contact Dave Krantz [email protected]

BACKGROUND

Emissions from the Beetaloo Basin Project

The emissions which will be generated by fracking the Beetaloo Basin are likely to be very significant, and could increase Australia’s emissions by up to 13% (per Professor Nerilie Abram’s analysis provided to the Beetaloo Senate Inquiry).

Various production scenarios (high, medium, low) have been used to model possible emissions that could be generated by fracking the Beetaloo Basin. A report prepared by Reputex (relied upon by Professor Nerilie Abram, and drawing on the Fracking Inquiry’s modelling) provides the following analysis:

Utilising the “high” scenario, fracking the Beetaloo Basin would thus generate:

• 16 million tonnes per annum of upstream (scope 1) emissions;
• 6 million tonnes of processing emissions (scope 1) emissions;
• 12 million tonnes per annum of downstream (scope 2 and 3) emissions produced in Australia.

Pursuant to the Safeguard Mechanism deal, up to 22 million tonnes per annum of GHG emissions will need to be fully avoided/mitigated/offset from B. At the current spot price of $36.50 per tonne, this would cost $803m per annum to offset (but could be as high as $1.8 billion per annum at the cap of $75 per tonne).

Barossa Gas Project

Santos’ Barossa Gas Project is located north of the Tiwi Islands in the Arafura Sea. It will pipe gas from this location to Santos’ existing Darwin LNG facility at Middle Arm in Darwin Harbour, which for the last 20 years has processed gas from the Bayu Undan field (in East Timorese waters). Thus, gas from the Barossa gasfield will “backfill” the Darwin LNG facility.

In 2021, Santos revealed plans for an “alternative” to the base case described above, which will entail a carbon capture and storage (CCS) facility at the old Bayu Undan field. Currently, Santos has no approvals in place for this project, and it should be treated as speculative only.

The Barossa Gas Project will, if it proceeds, be one of the dirtiest gas projects in Australia, producing more CO2 than LNG. This is the case even if Santos’ proposed CCS facility is successful (which is unlikely). This is primarily because the Barossa gasfield contains very high CO2 content (approximately 18%), the majority of which must be vented offshore.

The emissions profile of the Barossa Gas Project is as follows:

• Offshore (FPSO) – total emissions 3.38 million tonnes per annum (scope 1)
• Onshore (Darwin LNG) – total emissions 2.05 million tonnes per annum (scope 1).