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Updated July 31, 2017 19:03:17

Government support for the fracking industry in the Northern Territory is a misallocation of resources that is "like following a rabbit down a hole", an energy analyst has told an inquiry.

It would be a mistake to allow hydraulic fracturing and gas development in the NT, said Bruce Robertson from the Institute for Energy Economics and Financial Analysis (IEEFA), which promotes the transition to a "diverse, sustainable and profitable energy economy".

A global gas glut, cost blowouts at other Australian plants, and disappointing royalty returns for governments were other reasons the Territory should steer clear of the unconventional gas extraction, he told the inquiry in Darwin on Monday.

"Government support for the industry is a misallocation of limited government resources," he said.

"I think we shouldn't be following this rabbit down the hole, that's why it's a misallocation of resources.

"You shouldn't actually be here, because the decision should've been made before this inquiry was done that it wasn't a wealth-creating industry for the Territory."

This is the second round of hearings for the inquiry, which will also travel to Alice Springs, Katherine and Tennant Creek, before the final report is drafted in late 2017.

The Labor Government instituted a moratorium on fracking until it could determine whether the practice could be done safely.

Remaining globally competitive

If the NT did allow fracking, Mr Robertson said one its biggest issues would be to remain competitive in a global marketplace.

"Producing high-cost onshore gas is not economic in a low-cost gas world," he said.

"Qatar is the world's lowest cost producer ... the fields that they were looking at developing in the NT, the production costs were $7.50 a gigajule. In Qatar, they're 20 cents.

"This is what we're competing against."

Mr Robertson also said global overestimations of gas demand had resulted in a glut that could extend until around 2030 and have dire consequences for some of Australia's existing gas plants.

"East coast Australian plants [are] the highest-cost plants in the world," he said.

"We have had a global gas boom and after a boom comes a bust. Who is the plant that usually closes first? In the resources industry it's usually the high-cost plants."

'It's absolutely a fabrication'

But some argued the economic benefits of fracking would not take as long to develop as Mr Robertson suggested.

Mark and Bill Sullivan run MS Contracting and were working with gas company Pangaea on its infrastructure needs before it suspended drilling last year ahead of the moratorium.

"The NT Treasurer recently said that even if the moratorium were lifted immediately and work start immediately there would be no benefit to the NT economy for four years," Bill Sullivan said.

"Well we dispute that, it's absolutely a fabrication."

Mark Sullivan told the inquiry the benefits of their work with Pangaea extended beyond economics.

"Late 2015 we were in the planning stages of constructing a bitumen road on the Western Creek Road, which services about 13 pastoral properties," he said.

"The idea of it was to seal that road to get wet season access and operate 12 months a year, but then obviously that would then provide all-year-round access to those pastoral properties and other people wanting to go through those areas."

Fracking dividing the community

An interim report released two weeks ago by a panel of experts listed numerous issues that must be managed if fracking is to go ahead in the NT, including water, land, greenhouse emissions, public health, Aboriginal people and culture, and social and economic impacts.

The report said that effective water management was necessary to develop any unconventional onshore shale gas industry in the Territory, while noting that a potential detraction from iconic NT landscapes was one of seven land-related risks of fracking.

Other land risks included inappropriate placing of infrastructure in development areas, poisoning of plants and animals, and soil contamination from chemical spills, the report found.

The panel of 10 scientists, led by Justice Rachel Pepper, has been travelling around the Northern Territory and consulting with community members about fracking.

"The anxiety, if not hostility, surrounding fracking was on display during the first round of community consultations held by the inquiry," the report said.

The issue has been highly divisive in the NT over recent years.

The report called for a robust regulatory framework if fracking were to go ahead.

"It's the principle way in which the Northern Territory Government can ensure that the development of any onshore unconventional shale gas industry is consistent with the principles of ecologically sustainable development," it said.

The Government said there would be two final reports: a draft expected around October, and a final report by the end of the year.

Topics: mining-industry, business-economics-and-finance, mining-environmental-issues, government-and-politics, darwin-0800, nt

First posted July 31, 2017 17:50:12

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Support of fracking in NT a 'misallocation' of Government's resources

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Updated July 31, 2017 19:03:17 Government support for the fracking industry in the Northern Territory is a misallocation of resources that is "like following a rabbit down a hole", an energy analyst has told an inquiry.

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Updated August 02, 2017 14:53:55

Tasmania's Wilderness Society is warning six out of every 10 trees cut down as part of a state government plan to unlock special species timber will be unusable.

The Government released a draft plan for public consultation which sets out future access to special species timber.

The Government said the plan would simplify the application process to harvest speciality timbers and balance conservation needs while assisting the forestry sector.

The Wilderness Society's Vica Bayley said based on a Forestry Tasmania report released in May, more than half of the trees cut down under the proposal would be wasted.

"We have digested this report and it demonstrates that there is a log product recovery of 0.4 applied and that is because it is impossible to detect internal defects in some of these trees," he said.

"What this means is that six out of every 10 trees that are cut down under this plan would be wasted, woodchipped or otherwise of very low value."

The plan outlined a log product recovery factor which was applied in order to account for undetected internal defect.

"A log product recovery factor of 0.4 was applied for all species in this report," the report states.

Mr Bayley feared this would mean old-growth rainforest trees could be woodchipped and wasted if the plan went ahead.

"This plan talks about 420,000 hectares of old growth and rainforests within Tasmania's Reserve Estate," he said.

A Tasmanian Government spokesman did not confirm whether six out of every 10 trees cut down would be unusable.

"The draft management plan, which was developed by members of the Ministerial Advisory Council, makes clear that there are a range of challenges for the special species timber sector in accessing the volumes of timber it needs in order to sustain the industry," he said.

"The plan is currently out for public consultation and we look forward to receiving feedback."

Unlocking forests remains aim: Barnett

In June the Government's contentious Forestry (Unlocking Production Forests) Bill 2017 was voted down in the Legislative Council.

The bill would have allowed logging in 356,000 hectares of forests two years earlier than a moratorium would have allowed.

When the Special Species Management Plan was released for public consultation a fortnight ago, Resources Minister Guy Barnett said harvesting could start as soon as possible after the Government's legislation passed.

"Unfortunately, while the plan sets out a way forward for the sector, a large proportion of the resource identified will not be able to be accessed in practice until our legislation to unlock production forests and fix up the unworkable application process for special species harvesting is passed," he said.

"The Liberal Government is continuing to back the special species sector by seeking a fresh mandate from the Tasmanian people for this legislation at the next election.

"By releasing a draft plan for public consultation now, we are ensuring that we will have an approved Special Species Management Plan in place so that harvesting can commence as soon as possible after our legislation passes."

Tree waste claim 'farcical'

Specialty timber user Andrew Denman, who is also on the advisory council, said the Wilderness Society's claim that 60 per cent of trees would be wasted was "farcical".

"They're saying if you cut down 100 trees, 60 per cent will go to the chipper but that's not the case," he said.

"These days harvesting methods are much better and we have a much better sense of whether a tree is worth it.

"There is no market for these trees to be woodchipped. The draft management plan is all about moving away from broad scale harvesting to sustainable harvesting."

First posted August 02, 2017 09:11:25

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Claims old-growth trees will be wasted under specialty timber plan

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Updated August 02, 2017 14:53:55 Tasmania's Wilderness Society is warning six out of every 10 trees cut down as part of a state government plan to unlock special species timber will be unusable. The Government released a draft plan for public consultation which sets out future access to special species timber.