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Tamboran and Empire comments....

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The two developers at the centre of the Beetaloo Basin say the project will proceed despite Labor’s safeguard mechanism concessions, describing claims from the Greens that work would stop as “100 per cent wrong”.

While the Greens said their proposed changes to the carbon pollution scheme would stop half of the 118 resources and energy developments in the pipeline, Tamboran Resources and Empire Energy say they have already factored in required direct emissions reductions from Beetaloo projects.

There are high hopes the Beetaloo Basin reserves will help with east coast gas supplies. 

The region in the Northern Territory holds an estimated 8000 petajoules of gas, including almost 2600PJ in three principal ventures – run by Tamboran, Empire and Santos. Tamboran shares fell 6.7 per cent to 21c on Monday, while Empire dropped 6.3 per cent to 15c.

“The Greens have claimed these amendments restrict the Beetaloo Basin’s development. This is 100 per cent wrong,” Tamboran chief executive Joel Riddle said. “Tamboran’s progressive sustainability plan was and is doing everything called for in these amendments. This is a decisive political failure for the Greens who have campaigned to destroy industry, jobs and real progress on emission reductions.”

Empire chief executive Alex Underwood said the deal struck on Monday had brought “additional clarity” to regulatory requirements for developing Beetaloo gas. There was a “great opportunity” to develop the Northern Territory’s onshore gas resources to enhance energy security, he added.  

With less than 1 per cent CO2 contained in our Beetaloo gas resource, the challenge of offsetting the emissions of our development is significantly lower than other gas sources,” Mr Underwood said.

But Greens leader Adam Bandt said the proposed changes to the safeguard mechanism would add an extra $1 billion to the development of Beetaloo gas which would “derail the business case” and potentially kill it off. “It hasn’t been finally stopped, but it has been derailed. And this will be a huge, huge shot in the arm to the campaigners against the Beetaloo project,” he said.

But Mr Riddle said the amendments the Greens demanded to the safeguard mechanism – which covers 215 of Australia’s biggest polluters – was already captured under the NT government’s 2018 Pepper inquiry. That review found risks involved with the onshore shale gas industry could be mitigated and paved the way for the resumption of drilling in the territory.

“If the Greens were really committed to net-zero, they would get on board with Tamboran and the Beetaloo Basin as Australia’s greatest emissions reduction initiative,” Mr Riddle said.

Reports from the Australian Energy Market Operator and the Australian Competition and Consumer Commission have cited Beetaloo gas as crucial to help resolve looming east coast gas shortages over the next few years.

The NT gas industry expects an agreement in the safeguard deal that only “reservoir” CO2 would need to be net-zero emissions works in favour of Beetaloo gas, where CO2 levels in the resource are typically 1-3 per cent, much lower than some other fields such as Santos’ Barossa project.   

Credit Suisse energy analyst Saul Kavonic said that while the safeguard reform deal with the Greens is a far cry from a ban on new oil and gas, “it certainly doesn’t indicate new oil and gas supply is welcome”.

“It lays the groundwork for more obstacles to new investment in gas supply, contrary to Labor’s recent message that Australia needs more gas supply,” he said.

“The hard cap, the trigger, the CCA sector-specific plans, the subjective scrutiny of offset use, and requirements for net-zero for new gas fields to be exported are all collectively going to make new gas supply for both Australians and trading partners harder to develop.”

In the months of negotiations over the safeguard mechanism – the government needs support from the Greens to pass the legislation in the Senate – Mr Bandt has often warned of the pipeline of more than 100 “coal and gas” projects that were waiting to be developed.

But of the 118 publicly announced resources and energy projects outlined by the Industry Department last year, 22 are hydrogen, 18 are coal, 18 are for infrastructure-related projects like gas pipelines, 17 are for other commodities, 11 are for oil and gas, 11 are for iron ore, eight are for copper, four are for nickel and cobalt and one each for lithium and uranium.

Minerals Council of Australia chief executive Tania Constable said commentary from the Greens about halting half of the projects in the pipeline was “unhelpful”, adding that not all proposals made it to development.               They’re referring to a list that’s produced by the chief economist within government, and on that project list they range from exploration, pre-feasibility, feasible, through to developed,” Ms Constable told The Australian Financial Review.

“It’s a well-known fact that a whole lot of projects don’t go ahead for a range of reasons.”

Grattan Institute energy program director Tony Wood said a “substantial” number of the 118 projects in the pipeline would not proceed.

But Mr Wood said if even only a handful of big gas or coal projects went ahead it would cut into the 17 million reserve for new entrants into the safeguard mechanism.

“It was always highly unlikely that all of those 116 or 118 projects would be going to go ahead, but you wouldn’t require all that many of them to make a dent into 17 million tonnes,” he said.

Mr Wood said the changes to the safeguard mechanism were workable.

“There are always going to be risks because there are a lot of unknowns about what is going to happen with these projects,” he added.