Residents, environmentalists and pastoralists have welcomed a “balanced” report on fracking in the Northern Territory, which identified a number of risks associated with the industry and a loss of community trust.

The NT government enacted a moratorium on hydraulic fracturing in the NT when it took office in August, establishing an inquiry to examine if it could be done safely, following concerted campaigning by Indigenous land owners, pastoralists and environmentalists.

The NT is estimated to have more than one-third of Australia’s shale gas resources, 70% of which are found in the Beetaloo sub-basin. The site has received about half of the $505m of exploration investment since 2010 and is the main target for future development.

The interim report from the inquiry, run by a panel of experts, said its “preliminary view” was that the use of surface water for shale gas operations should be prohibited in arid and semi arid areas.

Groundwater should not be permitted for use in fracking without proof there would be no adverse impacts, it said, and fracking during the Top End’s wet season should not be allowed at all because of the potential for storage ponds to overflow.

The report noted most national parks, reserves and areas of high conservation were not currently “no go zones” and could be subject to petroleum exploration permits applications.

The panel said it would consider the risks a shale gas industry may have on those areas, as well as residential areas, agricultural land, sacred sites and tourism icons should be excluded from potential fracking wells.

The report also identified several land-related risks, including detracting from iconic landscapes, damage to biodiversity and habitat loss, spreading weeds and changing fire regimes, as well as potential risks to public health including contamination of aquifers and airborne chemicals.

The inquiry found there was community concern about environmental damage and disruptions to Aboriginal cultural traditions from fracking.

It also acknowledged proponents who argued fracking could bring jobs and much-needed revenue to the faltering economy if regulated and safeguarded but warned there were concerns about equitable royalties distribution and the long-term sustainability of shale gas industry jobs.

The NT chief minister, Michael Gunner, said the government would make its decision to either ban fracking or allow it in “highly regulated circumstances in tightly prescribed areas” once the final report was completed.

“We will make the best decision for the Territory – we will not put at risk existing fishing, farming, tourism and cattle jobs for the possibility of jobs from fracking,” he said.

Naomi Hogan, of the Lock the Gate Alliance, said the report was “a stark reminder to the federal government to back off with their uninformed pro-fracking mantra”.

“The report makes clear that every part of the shale gas extraction process does come with risks, from the chemical transportation, to a grid of thousands of wells and pipelines, to faulty well integrity causing water contamination,” she said.

“The report documents a litany of concerns that have been put forward by Territory families, pastoralists and traditional owners about the impacts surrounding the fracking industry and polluting shale gasfields across the Territory.”

Colin Ross, owner of North Star Pastoral, which holds pastoral leases on more than 2m hectares, welcomed the report.



“From a cattle station owner perspective, the interim report outlines a range of unacceptable risks to our operations, both in the short and long term,” he said.

“I am thinking about my children and grandchildren 100-plus years out. I want them to inherit the property with the natural resources of land, water and air in excellent condition. I need to know exactly how this country will be left after the gas companies have left the scene.”

The NT opposition accused the government of delaying tactics with the inquiry to avoid making a decision.



“Territorians have been blessed with abundant supplies of natural gas, which can form an important part of Australia’s energy supply and security into the future,” the opposition leader, Gary Higgins, said. “Despite inquiry after inquiry showing this technique can be done safely with appropriate regulation, all we get are more inquiries.”

The report came in the same week as the beginning of construction of the Jemena gas pipeline from Tennant Creek to Mount Isa.

The 622km pipeline will connect the Northern Territory gas fields to the east coast but currently is only intended to carry surplus gas from the Blacktip pipeline, which brings supplies from the Timor Sea.

Detractors of the pipeline – particularly Indigenous communities on or near the land it will run through – have objected on the grounds that it could eventually carry fracked gas, despite Jemena’s insistence the pipeline is viable without it.

At the NT Labor conference earlier this year, a motion was carried that pledged to support traditional owners and others who want to ensure no fracked gas is ever transported through the Jemena pipeline.

The motion, which noted the “range of views” on the Northern Gas pipeline, said the Labor party’s support for the project was not unqualified.

The motion’s final line proposed: “The Labor NT government will support traditional owners and all relevant stakeholders in their clear demand to Jemena that no unconventional fracked gas can be transported through the pipeline.”

The conference declaration has raised questions about whether the government will impose conditions on the future use of the pipeline, should the fracking moratorium be lifted.

A government spokesman said the issue was “relatively hypothetical” until the fracking inquiry was finished, noting fracking could be banned altogether depending on its findings.