Fracking can’t fire up NT manufacturing

Research published today by The Australia Institute highlights that employment in gas-related manufacturing declined while gas in the Northern Territory was very cheap. Fracked gas will be far more expensive, making petrochemical manufacturing in the Territory unviable without massive taxpayer subsidy.

Key findings:

  • The NT Government’s Power and Water Corporation had large surpluses of gas from the late 2000s.
  • NT governments spent millions trying to find takers for this gas and would likely have provided it at near-zero prices to projects that could provide significant employment.
  • Yet employment in gas-related manufacturing sectors declined from 209 people to 193 people between 2006 and the 2016 census.
  • Now with new supply from fracking likely to be high cost, and links to export and east coast markets in place, the era of cheap gas in the NT is over.
  • Developing petrochemical industries in this context is very unlikely. Economic stimulus should be directed to labour-intensive service industries like tourism and healthcare.

“This report raises serious questions around the credibility of the Gunner Government and its plans for a major fracking industry,” said Terry Mills, former Chief Minister and leader of Territory Alliance.

“Territorians need an honest conversation about fracking, not pipe-dream promises to develop industries that have been very difficult to establish in the Territory,” Mr Mills said.

“If gas-based manufacturing couldn’t develop in the NT with near-free gas, it can’t be viable with expensive fracked gas,” said Rod Campbell, report author and Research Director at The Australia Institute.

“Employment in gas-related manufacturing sectors actually declined while the NT taxpayer was paying for gas that the Territory couldn’t use.

“Taxpayer-backed, foreign-owned gas projects like Blacktip and the Northern Gas Pipeline have already cost Territorians dearly.

“The subsidies that would be required to establish petrochemical manufacturing based on fracked gas would throw good money after bad.

“The NT Government should direct stimulus spending to households and labour-intensive industries, such as tourism, health and education.

“Government support should not be provided to industries like unconventional gas that divide communities and risk damage to groundwater resources and the climate,” Mr Campbell said.

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