Growing Environmental Concerns over Empire Energy (ASX: EEG)

A feature in The Saturday Paper has highlighted growing opposition from NT traditional owners to fracking development of the Beetaloo Basin gas reserve. New developments in the McArthur River region off the Gulf of Carpentaria could threaten underground aquifers, on which many regionally significant waterholes and sacred sites depend.

The Beetaloo Basin is the NT’s major fracking gas reserve, and its prime mover at present is Empire Energy (ASX: EEG). Empire’s Carpentaria-1 site, just 30km from a Gundanji Country waterhole and sacred site, has already drilled to a depth of more than two kilometres since setting up operations in September.

The Northern Territory has become fracking’s latest frontier, ever since Northern Territory Labor ended a moratorium on fracking in the territory in 2018. The Beetaloo Basin is one of the world’s major shale gas reserves. Empire Energy claims Beetaloo has the potential to “rival the prolific US Marcellus Shale” reserve, which produces about 25 billion cubic feet of gas daily. 

Earlier this month, the Federal Minister for Resources and Water, Keith Pitt, announced a further $50m subsidy for NT gas. According to The Australia Institute, the development hoped for by the federal government would be equivalent to an 18 percent increase in Australia’s carbon emissions. 

The gas rush is now being further spurred on by the Federal LNP government. Energy Minister Angus Taylor visited Empire Energy’s site in October to announce a $28m subsidy for development of Beetaloo Basin gas. This policy makes the name of the department, the “Federal Ministry for Energy and Emissions Reduction” feel very Orwellian indeed.

Carpentaria fracking site, via EEG ASX announcement.

While this is certainly not intended as financial advice, it is fair to say that it is an open question whether development on the scale envisaged by the company should be allowed to occur. Some major mainstream financial institutions are looking to divest from fossil fuels in line with Paris Climate Agreement targets, and the low price of oil will not make the risk-reward calculation favourable for gas production.

With traditional owners of the EEG Carpentaria concession site becoming more active, investors may also be wary of similar legal challenges taking place on the Beetaloo Basin. If nothing else it is fair to say that the battle continues between those who would prioritise gas extraction, and those who would prioritise the protection underground aquifers on this dry continent.