Giles on fracking: Sovereign risk a red herring?


p2147-Adam-Giles-1By ERWIN CHLANDA
A claim today by Chief Minister Adam Giles that Labor’s onshore gas moratorium is “creating sovereign risk in the NT” appears to be in direct contradiction to the view of Ron Kelly, the Chief Executive of the NT Department of Mines and Energy.
Mr Giles (pictured), who does not elaborate on the “sovereign risk” claim in a statement he issued this morning, appears to suggest the NT Government may be faced with claims from oil and gas companies if fracking is stopped.
But Mr Kelly told the Alice Springs News Online in August last year that the Minister of Mines is empowered to refuse the renewal of a licence, without risk of litigation, even if all conditions of the permit have been met.
The News report, which was published after its draft had been fact-checked with Mr Kelly, said: “Sovereign risk” can also play a role, defined as “the probability that the government of a country (or an agency backed by the government) will refuse to comply with the terms of a loan agreement during economically difficult or politically volatile times”.
Mr Giles said in his release: “Pangaea Resources has cited Labor’s moratorium as the reason it’s scaling back NT operations, costing Territorians their jobs.”
An aide to Mr Giles says the Chief Minister relied on a report in the Murdoch NT News for this information.
Mr Giles said: “A major oil and gas company has announced it intends to sack 140 workers in Central Australia because of the uncertainty created by Labor’s anti onshore oil and gas agenda.”
The Alice Springs News Online directed several several requests for information to a spokesman nominated by Pangaea but he did not provide any. We will update this story if information comes to hand.
The Australian Petroleum Production & Exploration Association (APPEA), when asked for comment, said it doesn’t “comment on specific activities of individual companies, but clearly the uncertainty created by Labor’s moratorium policy will have a direct impact on the gas industry’s near term investment in the NT”.
Says Mr Giles: “Labor’s hypocrisy knows no bounds. In Government they opened the gate on 95 per cent of the Territory for onshore oil and gas exploration, including on Aboriginal communities, tourism areas and sites of ecological value.
“My Government has been winding back Labor’s open gate policy to ensure areas of significance and population will not be subject to onshore gas activities.
“In Government Labor approved 33 ‘well activities’ but now they say they don’t support gas. What cowardice and hypocrisy.
“The facts are there are 55 wells producing gas right now powering the Territory. Does Labor really want to turn the power off right now or are some wells okay? Which wells are okay? The ones Labor approved?
“Labor can’t even say how long they plan to close the industry for. Answer that one Michael [Gunner, Opposition Leader].
“Labor’s moratorium is purely poll driven. It’s a cynical way of chasing votes at the expense of the Territory’s future.”
The Alice Springs News Online reported on Labor’s fracking policy earlier this month in a story headed “Labor on fracking, a part answer”.


  1. The question we have to face is, is it in our interest to supply a mandatory product to Australia like energy.
    Labor sold all this offshore asset to international friends. Time to forget. Time to act for Territorians.

  2. “Labor’s moratorium is purely poll driven. It’s a cynical way of chasing votes at the expense of the Territory’s future.”
    So, in a democracy chasing votes is a good thing, isn’t it?
    Votes mean the people agree, and chasing them means you recognise the people are the ones you represent.
    I think dictators are the ones who know better than the people, are they not?
    Just saying.

  3. Pathetic scaremongering at its best, tell your mates we don’t want to frack the Territory, pretty simple stuff, the radio advertisement is an insult to the intelligence of Territorians.
    1 Territory will ban fracking in the Northern Territory, if Pangea want to have a dummy spit go right ahead.
    1 Territory will ban fracking and the exploration licenses are just that – exploration licenses, so my friend from ducks nuts, you do not have a public lisense and you certainly cannot put your hand on your heart and say its 100% safe for the environment. Well, we know your environmental scientists couldn’t. Close the door behind you.

  4. Another Liberal fear based campaign! Let’s be clear:
    1. There is a BIG difference between CONVENTIONAL gas fracking and UNCOVENTIONAL shall gas fracking. Aside from exploration wells which there are roughly seven, unconventional shale gas is not currently in operation in the NT.
    2. There is no shortage of conventional gas, that is gas that is utilized to power the territory power stations.
    3. The majority of onshore gas is bound for export market not domestic use.
    4. Regardless of what politicians claim or how much they bully, the majority of Territorians overwhelmingly do not want this invasive and unsafe industry to go ahead.
    5. There is no safeguarding this industry, sas leaks, that is fact.
    6. 90% of the Territory is under license of exploration license for fracking, this includes areas that all municipalities get their water supplies from. Water supplies are not safe from unconventional fracking. This includes national parks and any area of significance. No where is safe.
    7. A moratorium on fracking would not decrease jobs, rather save jobs. In QLD where unconventional fracking is prolific, for every 10 jobs created in the industry, 18 jobs in agriculture were lost.
    It is clear that Chief Minister Giles and he cohorts have so much invested in this industry, it is way to late to turn the tide and loosing face is not an option.
    Why doesn’t Mr Giles and his Ministers put themselves on the line and personally hold themselves accountable for the safety and risk of this industry if they believe in it so wholeheartedly.
    They are spending gross amounts of tax payers’ money on an industry that is proven not to be of economic value to the tax payer.
    It is dirty, unsafe and out of date. We don’t want to be pushed down by your fear mongering on an issue that is revealing more and more devastation day after day. Poll driven or not, at least Labor are listening to the constituents. Wake up Mr Giles; realise people want a clean future!

  5. It must be getting desperate at Giles and co HQ.
    A financial decision by a company based on the low oil price is then trumped up to be the result of the ALP moratorium policy. What a crock! This embellished front page story in the NT News shows the bias of the News Ltd family, including the Advocate, in favour of the frackers.
    The greatest risk to the NT is the poorly considered “investments” of the current government. Given the failure of the taxpayer funded “Oil and Gas: it’s about all of us” advertising campaign to allay people’s concerns about the impacts of fracking, we must prepare ourselves for the misinformation onslaught from vested interests as we approach the election in August.
    In brief, this is a case of risk not sovereign risk. But to risk our groundwater for a gas company’s profits is to risk it all.

  6. Sovereign risk is a term whose meaning seems to have changed over time, but now it is thrown about by pollies to dress up weak arguments.
    Voters should prick up their ears and turn on their bull dust detectors whenever a pollie uses the term.
    We should encourage them to drop the jargon and say what they mean in unambiguous language.

  7. Rubbish Adam. You and your mob should get on the page and support the renewable energy opportunities of the present and future.
    You CLP mob appear to be all about money, not people. Get your priorities right!
    Phil Walcott
    Parliamentary Candidate for Braitling.

  8. This whole debate is generating enough hot air to run a fleet of geothermal generators and from the smell of it, most of the gas is methane from the southern end of a northbound male bovine.
    At the heart of it all is the fabled Northern Gas Interconnector, which any normal person would call a pipeline.
    The gas pipeline will happen but when is the operative question. Forget the election year spin about moratoriums, thousands of jobs and a royalties cheque in every mailbox, I simply can’t see it any time soon.
    There’s a meeting in about a fortnight with traditional owners to get some agreement on the route and then there’s the question about whether any of that route endangers habitat of critters that aren’t supposed to be alive any more. It does, so we will see where that goes.
    If you go back over the Chief Minister’s comments, he has only ever said that it was expected gas would be flowing in 2018. It’s a variation of “it’s always five o’clock somewhere” thinking.
    The government – and of course, its pet rent boy at the daily American newspaper – keep screaming the mantra “900 jobs, 900 jobs” but in reality, there’s a handful of short-term jobs in it for Tennant in construction phase.
    The real issue is Jemena has an agreement that it can build a pipeline. Jemena, of course, will want to maximize the amount of gas it is sending through the pipeline to make more money.
    At present, there is just enough to make a small pipeline viable. Even then, that is probably relying on at least one of the planned or potential projects coming on line.
    The only hydrocarbon project close to some form of reality is Origin Energy’s Beetaloo prospect. That is in exploration phase until 2018 and so far, five wells have been spudded. It all looks promising but they haven’t even started thinking about how much gas they can pull out of the ground, how they are going to do it or even when they are going to do it. However you slice it, it is years away.
    Pangaea has been in the news this week for halting its exploration program in the Beetaloo Basin, allegedly because of “uncertainty over Labor’s moratorium” and that it has had to cancel its program this year at a loss of 140 jobs. It’s rubbish, there is no hard evidence that it has even started drilling yet, nor had they planned to be. It’s still listed on the projects website as “potential”.
    Perhaps the spokesperson for Mr Fudge was referring to the Origin project. There were only two wells planned to be drilled on that this year anyway; if it takes 140 blokes to drill two holes in the ground they must have sub-contracted the Town Council to do the work.
    Don’t forget, Pangaea’s owner Paul Fudge famously made $660 million in a single day for selling an exploration permit for coal seam gas in Queensland when he had absolutely no evidence there was any of the stuff in the lease. Anecdotally, he bought it in the morning and sold it in the afternoon.
    Crux, Caldita, Borrossa, Pedirka and prospects in the McArthur, Beetaloo, Georgina and Amadeus basins are still listed as potential with some aerial surveying under way; Wiso exists only as a media release under Mr Giles’ hand (along with the “thousands of jobs, thousands of jobs” mantra).
    Of course the Opposition is playing politics on this, that’s their job. They can propose a moratorium because at this stage, there are no approved projects to actually pull commercial quantities of gas out of the ground.
    A moratorium will not affect exploration, I am sure.
    The Chandler salt mine seemed to get some sort of approval this week, which is a good thing. Can Mr Elferink place his hand on a Bible and swear that slave labour in the form of unpaid prisoners won’t be used in either construction or production phase?
    Can he keep the Bible in his hand and give the same guarantees that materials used in the construction won’t be made by prisoners at the expense of Alice businesses?
    Nah, didn’t think so.
    In the meantime, can someone please generate some genuine, long-term jobs for Territorians that don’t involve us all moving interstate?

  9. I try to attend parliament sittings at least one day each session but also watch online and at last count I can still only see seven labor MLAs out of Twenty Five total elected members.
    Yet the government still hurl all the abuse to “Labor” and blame everything on “Those Opposite”.
    Surely there is an advisor up in the 5th floor that can call down to them “the enemy is the others sitting in the independent seats”! Look! over there to the right, “The deserters!”.
    Oh well, at least Adam Giles is providing our Editor Erwin with many fiascoes to report on.


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