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Unconventional Gas Mining
Adequacy of Australia's legislative, regulatory and policy framework for unconventional gas mining

HARRIS, Mr Ian Mervyn, Director, Environment Centre NT

HOGAN, Ms Naomi, Coordinator, Lock the Gate Alliance Northern Territory

MORRIS, Mr David, Principal Lawyer, Environmental Defenders Office NT

ROTH, Ms Charmaine, Vice-Chairperson, Don't Frack Katherine

TAPP, Mr Daniel, Private capacity


CHAIR: Welcome. Information on parliamentary privilege and the protection of witnesses and evidence has been provided to you. I invite you to make a short opening statement, after which I will invite members of the committee to put questions to you.

Ms Hogan : The Lock the Gate Alliance in the Northern Territory has made a clear submission in regard to some of the regulatory reforms that we feel would be improved upon if the federal government were to assist the state and territory governments in protecting land and water resources. We have also attached many peer reviewed scientific articles pertaining to the water contamination issues that have been measured by the industry and governments around the world, particularly in the United States, where shale gas fracking in particular has taken place.

I wanted to make some short statements that are not in the submission in order to help with any questions that might come forward. One is in relation to the way in which the industry promotes the need for onshore gas in order to facilitate gas to the eastern states of Australia, in particular in New South Wales. Something that has happened since we made our submission is that the Gas statement of opportunities has been released by the Australian Energy Market Operator, AEMO. I have copies here of a page from their recent report. It states:

Despite the projected rising demand and limited local production, no supply shortfalls are forecast for New South Wales under the medium scenario.

AEMO's medium scenario does not include gas from the Northern Territory. They are saying there that we do not need any onshore gas development of shale in order to meet the demands for New South Wales. I wanted to put that out, and we can discuss that later if you wish.

The other point I wanted to raise that has also come up recently is that, in just the last few weeks, we have seen a new peer reviewed report come out of Stanford University. I have the abstract of that here for you as well. Basically, it shows that there is a clear link between the fracturing fluids and the process of fracturing for shale that has led to contamination of underground drinking water resources. That is in stark contrast to a press release put out last month by APPEA, the gas industry body, which states clearly on 11 March 2016:

But the reality is there have been no proven cases of groundwater contamination directly linked to hydraulic fracturing anywhere.

I bring that up because it is a concern to community members and advocacy groups on their behalf when the government is listening to APPEA, the oil and gas industry, and relying on them for factual information when in fact they are making comments that have been found to be untrue. I will leave it there for now. I am happy to answer any questions.

CHAIR: Thank you, Ms Hogan. Mr Harris.

Mr Harris : Senators, I come here today as somebody who has worked in the oil and gas industry. I have worked in Canada, the North Sea, Norway and shortly Australia. Some of the concerns that I have, and thus the centre has, are at what the scale of this industry will be, if it gets a head. Currently, I liken it to a bull at the gate. The bull can kick the gate open or we can lead it through. We can put a halter on it and lead it through. At present, the regulatory system in the Northern Territory is way too inferior to look after this type and scale of activity. I do not think a lot of our government people understand the scale of the operations involved if large fields of gas are discovered. I will leave it at that, and we can move on to questions.

CHAIR: Thank you, Mr Harris. Mr Tapp, just give us a brief outline of the experiences you are having as a pastoralist.

Mr Tapp : My first concern, obviously, and major concern is water security. As we all know, every industry relies heavily on water. My experience makes me very doubtful of the shale gas industry. For instance, I had a government geologist come down to my property a few years ago. He was studying old rocks for the government. I just happened to ask him what his thoughts were on fracking, and he said to me: 'You won't have to worry about it here. The landscape is too fragile and it would be very, very risky for fracking as there are too many fault lines in the area.' A couple of weeks after that I went to a meeting in Katherine held at the Cinema Cafe, and lo and behold I find that I am in the middle of one of the hot spots. I have just had a geologist tell me that it is too risky to be fracking in this area.

I am just basically very concerned about water issues and regulatory issues. Just going on what I have witnessed of people living in the industry—living in the gas fields, if you want to call them that—down south and overseas is that no-one is happy about it. If it is safe and there is money to be made, why are these people not happy? Why have they got serious water problems?

CHAIR: Thank you, Mr Tapp. Why would you support a moratorium? Anyone?

Mr Morris : I am happy to kick off. All of the scientific reports, which are referred to by the Northern Territory government and various other state and territory governments around Australia, have said that this industry is only safe if there is a robust regulatory regime in place, and we are not there yet. There has been a lot of talk by the Northern Territory department and there has been some action, but we are not there yet. The Hawke report came out, I think, in late 2014 and since then there has not been a single piece of regulatory reform in this area in the Territory. There have been guiding principles. There have been some draft regulations, but that is very different, vastly different, to actual legislative reform in this area. I do support a moratorium and I support it because of the very facts that these reports have come to find, which is that you must have a robust regulatory regime, and we are not there yet.

The other thing that I have significant concerns about is the capacity of the regulator in an environment where what we continue to have is a huge amount of onus placed on the operator doing the right thing. I am not sure that history tells us that we should have a great deal of confidence in oil and gas operators doing the right thing, unless they are required to, or they see an incentive in doing so.

CHAIR: The Hawke report comments on baseline testing. Why do you consider this the best practice?

Mr Morris : I have a list of litigation cases in America if anyone wants to see them. The Columbia Law School did a digest of hydraulic fracturing cases. There is a huge amount of litigation in this area. And we know that one of the big issues with litigation in this area is establishing the cause of contamination. If you do not have proper and transparent baseline data, it is very difficult to later hold someone to account for the damage they have done. One way of addressing that through legislation in some parts of the world has been to simply say that, if there is water contamination in an area, it is assumed it is the gas operator who has caused it—and the onus is shifted on to them to prove that they did not cause the contamination. That is one way of dealing with it. And if it is as safe as the industry says it is, I would assume they would welcome that kind of reverse onus provision in our legislation.

CHAIR: What do you think could be achieved if we had third-party appeal rights implemented in relation to permits or licences granted?

Mr Morris : Third party appeal rights do an enormous amount for the integrity of process. A merits appeal allows a community group to assess whether a decision made by a minister is good or bad. All of us who have spent much time in the Territory have probably come across decisions made by ministers that may be lawful but we do not think they are good decisions; they do not really stack up. I believe that having third party review rights creates an extra layer of rigour in the process. It provides better decision making and it provides more community support for the decisions that are ultimately made; they have a greater level of confidence in those decisions.

CHAIR: You say you do not want in the Northern Territory evaporation pits such as those in New South Wales. Do you want to elaborate on that.

Ms Hogan : We have major concerns that there is currently no prescribed minimum standard on what we would need from ponds. The areas that have been identified as the hot spots for shale gas in the Territory are subject to seasonal variation; there is a wet season and a dry season. It should be remembered that a commercial gas field requires thousands of wells; in fact, there will be tens of thousands of wells if we see shale gas like they are talking about and the volumes we have seen in the United States. That means thousands of ponds. The issue with these waste ponds, through the scientific literature, is that they are one of the leading causes of contamination to surface water, to underground water—these ponds leak into underground aquifers—and also to soil and land, which can be devastated when these ponds overflow and pollute neighbouring areas. We have seen that in Australia already and it is well documented in the United States. If we had those ponds here, they would be overflowing in the wet season. The cumulative impact of thousands of ponds across the landscape could have a huge impact on areas that are reliant on tourism, fishing and good, clean cattle country. That is a concern to many of the community members we work with here in the Territory.

CHAIR: The EDO Queensland, in its submission, talked about projected royalties of $411 million in Queensland in the 2015-16 budget papers and then revealed the almost $7 billion in subsidies to industry from 2007 to 2012 had a further $25.5 billion for rail, port and water infrastructure. Are you aware of whether subsidies exceed the projected royalties for the government in Queensland over the same period of time? What is your opinion of the government's policy to subsidise the industry beyond the expected royalties and are you concerned about the same thing in the NT?

Mr Morris : Sorry, but I do not have the answer to your question. I am concerned about the inadequacy of security bonds and environmental bonds that apply to oil and gas activities in the Northern Territory. As to the economics of the industry as a whole, and the subsidies provided by government, it is not within my area of expertise to add to that.

CHAIR: Senator Waters, do you have some questions?

Senator WATERS: Forgive me, I am just trying to bring up the submission. Is there something that I am missing? Do we have any submissions made by these witnesses?

CHAIR: I do not think so.

Senator WATERS: Can I get clarification on that?

Mr Morris : If it assists, I can indicate that the EDO of the Northern Territory did not provide a submission to this inquiry, but I believe that the EDOs of Australia did. I could be wrong about that. It was guided by the EDO New South Wales policy team.

Senator WATERS: Okay, great. I did not think I had seen one, but then I thought I heard a reference to a submission. Anyway, I will push on. Thank you for your outline. Firstly to you, Mr Morris. You mentioned that you do not think that there is a robust regulatory regime, and then I think it was Ms Hogan who went into the inadequacy of the evaporation ponds and the lack of standards for them. Given we do not have the benefit of a written submission from you, could you just outline for us here what the deficiencies in the regulatory system are, which fail to ensure that environmental and community rights can be protected?

Mr Morris : I will certainly try, although I am not sure we are going to have sufficient time for me to go into great detail about all of the deficiencies of the current regulatory regime. I suppose the first thing that is critical to note at the outset is that the Petroleum Act, which is the governing legislation, places economic interests—and I should say short-term economic interests, I believe—above environmental protection. There is no legislated objective under the Petroleum Act that these operations be undertaken with ESD or ecological sustainable development principles at their core. If you drill further down into the legislation, there are no environmental protection regulations in existence at the moment. We have draft discussion environmental regulations which are out for public comment at the moment. As I said before, I do not think they are there yet in terms of enshrining and embedding ESD principles into the regime.

As I understand it, at the moment there is also an approach by the government to basically set out the means, which is to have only gas operations with acceptable environmental impacts, but they are going to leave it to operators to work out what the means are to justify those ends—namely acceptable environmental impacts. I do not believe that that is an appropriate way to deal with this particular industry and we do need to set minimum standards. Those minimum standards would go to things like how pits are to be appropriately lined and the minimum requirements for well integrity—particularly testing or ongoing monitoring and testing of decommissioned wells where we know there can be potential problems into the future.

As I said, we need to be very careful about outlining in the legislation exactly what the minimum standards are for this industry. If your concern is that industry might be able to innovate and do a better job, you should be able to include in your legislation some mechanism by which they could come to the government with an alternative approach that would result in better environmental outcomes. I believe that there should be some form of independent body that could then assess whether or not that proposed departure from the minimum standards in legislation was going to result in better environmental outcomes or just cost savings. But I might leave it there because I am taking up a great deal of time. I should note that the EDO of the Northern Territory did a 45-page report which looked at the Northern Territory's regulatory regime for this industry and, given there has been no legislative amendments since then, all of the recommendations and things we identified in that 2014 report remain valid and current.

Senator WATERS: Great. Could you email us a copy of that once you are able to?

Mr Morris : Certainly.

Senator WATERS: Thank you. In relation to the precautionary principle, is that required anywhere in either the current laws or in the draft discussion regulations that you referred to?

Mr Morris : I believe it is referred to in the draft petroleum environment regulations. It is not in the current Petroleum Act.

Senator WATERS: Can you expand a bit further on that? Have they done so adequately? Is there a requisite information base on which to then use the precautionary principle? Have they done it well enough?

Mr Morris : We are in the process of making our comments on the environment regulations. My overall comment would be that there remains a reliance on the minister making a good decision and that is not a process that, in and of itself, gives me great confidence. I believe there should be some independent assistance to the minister to ensure that they do make a good decision and that the principles of ESD, and the precautionary principle essential to that, are taken into account when making decisions about this industry.

Senator WATERS: Perhaps once you have finished preparing the submission on the draft regs you could slip that to our committee, assuming we are still underway at that stage. That would be great. I have one last question and I do not mind who on the panel answers it. Part of the problem in Queensland has been not only our woefully inadequate regulations but the pitiful enforcement of those regulations. I am wondering whether or not your environment department and the departments with responsibility for regulating this industry are well resourced. Do they have a history of good enforcement and compliance, or are they like most other environment departments around the country, which are under-resourced and not given a lot of teeth to do their jobs properly?

Mr Morris : I think your question raises two points. The first is whether or not the Department of Mines and Energy is a body that is sufficiently independent to regulate this industry, and I do not believe it is. It is, through both legislation and government policy, the body that is created to promote the industry and regulate it. They singlehandedly have to be the people who try to tell industry to come here and why it is such a great place to come to but also the ones who hold them to account. In my opinion, that does not lead to good outcomes. I think, however, it is best not to take my word for it but potentially to look at the recent report by the Northern Territory Environment Protection Authority. I might be slightly misquoting them, but essentially they found that there was an ongoing tension within government departments which are forced to both promote and regulate industry. They said that in the case of Redbank mine, which is a copper mine in the Gulf of Carpentaria, the regulator had failed.

Also, if you look further, the Department of Mines and Energy, I understand, was also the regulator in charge of the Montara debacle. So we do need to ensure that government departments are adequately resourced. It is a big problem in the Northern Territory to both retain and recruit staff who stay around for long periods of time. That is a challenge. It is also a challenge, given the vast geographic size of the Northern Territory, to ensure that industry operations have adequate oversight. We do need to be very certain—and I am not—that the department that regulates this industry is both sufficiently independent and sufficiently resourced.

Senator WATERS: Thank you for that; it has been great. Can I just check something? The Northern Territory EPA does not have any formal role at all in the regulation of this industry; is that right?

Mr Morris : The Northern Territory EPA would have a role if an operation by this industry triggered some form of environmental assessment under our Environmental Assessment Act. They may also be involved through offsite pollution type issues or through the need to obtain a wastewater discharge licence to discharge some kind of waste to a water body.

Senator WATERS: With the first instance, are there any of those environmental requirements that need the Northern Territory EPA to issue that permit?

Mr Morris : I think it would depend on the magnitude of the operation that was proposed. I do not understand that exploration activities have thus far triggered the need for an environmental impact assessment.

I do not have information before me as to whether or not this industry has required the issuing of a wastewater discharge licence, but I think someone mentioned earlier that they potentially had. I can try and find out as a question on notice, but I cannot guarantee that I will be able to find out.

Senator WATERS: We might put that to the department to answer, because I know your resources are stretched as they are, doing the excellent work you do.

CHAIR: Ms Hogan, you were going to add to that?

Ms Hogan : I just wanted to jump in to back up some of those points. With the proposed revised regulation here in the Territory, there still isn't the need for environmental management plans to go through an assessment process by the EPA. There are also grounds in their proposed assessment to split the assessment into parts, where parts of proposals can be approved in segments. There are large concerns there about the cumulative impacts of the gas field. If you were to propose a thousand wells, but have them approved 100 at a time, you can often slip things through that do not look at the full impact on a landscape, on pollution that comes out through the air, water pollution et cetera.

The other point I wanted to make is in regard to the Department of Mines and Energy being both the regulator and the promoter of the industry. From having done detailed work to look through the proposed regulation and from reading the newspaper—which comes out with an advertisement every day from the Northern Territory government promoting shale gas and groundwater safety—I think it is safe to say that their advertising, which is just half a page, actually contains more stringent regulatory proposals than their actual regulation. Their actual regulation does not legally require any of the things that they are talking about in here around cement casing and the like. In fact, their regulation just talks to the mining company itself—the gas fracking company—being able to put forward what they think is best practice, and then the minister has the discretion to sign off on whether that is appropriate and whether it has an acceptable level of risk. There are concerns that the promotion of the industry does not stack up against the proposed regulation and that the minister has far too much power and potentially not enough information to make these critical decisions on behalf of Territorians.

Senator PERIS: Mr Morris, do you think there are sufficient independent sources of expertise available to the Northern Territory to oversee gas operations?

Mr Morris : I do not believe there currently are. Under our legislation there is no creation of an independent body of information that the minister could go to to seek some independent advice before making a decision. I also note, importantly, the difference between operations occurring on the east coast with CSG, where there is a trigger under the Commonwealth Environment Protection and Biodiversity Conservation Act. One of the results of that trigger, which looks at the impact of large coal operations and coal seam gas operations, is the creation of an independent body. That independent body is able to provide advice to the Commonwealth environment minister and also to the ministers involved in the relevant states—Victoria, New South Wales, Queensland—that have CSG operations. We do not have that same independent option to seek advice; our minister does not have the benefit of that. I would support both an inclusion of a trigger under the EPBC Act for shale gas and the creation of independent bodies to provide assistance to our decision makers in the Northern Territory, who, as we have heard before, often suffer through the inability to hire and retain good staff who have good understanding and knowledge of the area. Having that independent body would be a major improvement on the current scheme we have here.

Senator PERIS: The Northern Territory government has issued extensive groundwater extraction licences from some of the Territory's major aquifers. Can you explain how the gas industry's water use is currently regulated and what impact the current entitlements will have on the potential gas developments?

Mr Morris : Ron Kelly, who I heard earlier, indicated that the current exemption for mining and oil and gas operations will be removed from the Water Act. Like other industries, they will have to apply for groundwater extraction licences in the same way other operators do, such as the large sandalwood plantations that we have seen arising down in Katherine and the Mataranka area. That is a definite improvement that they will be required to obtain licences under that same regulatory regime.

I understand that, for the moment, the water use is regulated by the Department of Mines and Energy and there is an memorandum of understanding between them and the Department of Land Resource Management. We need to understand that in some areas of the Northern Territory, and this is my understanding, some of the aquifers are already at capacity. The government has already issued groundwater extraction licences that take those aquifers to their limits and in some places take them past those limits.

One of the other things we know is that the gas industry requires water to go ahead. We need to understand that the government—by abandoning the National Water Initiative approach, and issuing major groundwater extraction licences in areas such as the Oolloo Aquifer, which is near Katherine, and the Tindall Limestone Aquifer, which runs down to Mataranka—has placed significant constraints on what the gas industry can do. What they have done is already allocated all of that water. If you are going to extract more water from those aquifers, common sense tells you that the only way that can occur is by putting environmental health at risk.

I think that one of the things government fails to understand in the Northern Territory is we cannot have everything. We cannot have the food bowl; we cannot have the perfumery—which is the sandalwood plantations; we cannot have a big tourism industry with healthy Mataranka hot springs; and we cannot have a gas industry and a healthy environment. We cannot have it all. When you make decisions about water extraction licences for one industry, you necessarily place restraints on another. I cannot help but feel like our current regulatory environment does not adequately assess the cumulative impacts of all of those things.

Senator PERIS: Hearing Mr Morris speak about that—that a lot of the aquifers are at capacity and the water licences go beyond that—how does that make you feel within your industry?

Mr Tapp : This is exactly my concern: aquifers in our area are at maximum and over-applied for in some areas. The baseline study that they have used on this 80 per cent/20 per cent for use thing has been done on a 40-year rainfall average. The last 40-year average rainfall is almost double the hundred-year average rainfall. If you take that into consideration, it puts extra strain not only with the mining companies—I am a pastoralist. This central area of the Sturt plateau and Beetaloo Basin, where a lot of this activity is most likely to take place, basically waters the central half of the Northern Territory. All these cattle need water—there are hundreds and hundreds of thousands of cattle there. None of that water is being monitored at all. Basically, water has already been allocated to the farmers, but the pastoralists and the mining companies are unmonitored. There is only a certain amount of water that we can use.

Ms Hogan : I think this gets back to the point around the moratorium as well. We have major concerns that the appropriate mapping of aquifers and understanding of how much water is available and that there are proper regulations in place to protect water, and protect other water users, are not currently in place. We feel that potentially a national standard approach for a Water Act would be beneficial to Territorians and other community members across Australia, who are grappling with this. It is certainly time to put those baseline studies in place so that we can measure water quantity and quality before we start putting in hundreds and then thousands of gas wells through these aquifers that risk water contamination through well failure and other things that have been measured and through the large quantities of water that the gas industry will use. We need to know exactly which aquifers that water will come from, because it can have very adverse local impacts, which I am sure you will have heard about in Queensland.

Senator PERIS: Are the wells they intend to use public knowledge?

Ms Hogan : It is not public knowledge at this point and that certainly needs to be put in regulation—that they need to be up-front with that and they need to be able to show the independent modelling of that aquifer to be able to know that there is water available. Currently, that information is not being discussed or adequately mapped. We absolutely feel that we need a pause to gather this sort of information so that people are not left guessing. To date, the industry has not even needed to report how much water they are using, let alone where they are getting it from.

Senator PERIS: According to your submission, the Northern Territory government reports a further 25 wells are anticipated to be drilled, with many of them likely to be hydraulically fracked. Do we know where these are?

Ms Hogan : They are around the Beetaloo Basin, as Mr Tapp has mentioned, which is in the northern central part of the Northern Territory. Since that submission was written, we have had word from Ron Kelly from the Department of Mines and Energy that only five wells are likely to go ahead this year, predominantly because of the low international oil and gas price. It means that the companies operating do not have a lot of cash flow at the moment to do new operations. Those international and economic considerations are important because, if companies have limited financial resources or if they are subject to boom-bust economic realities, which we have seen, there is a large concern that they may go in with best intentions but, if the cash flow dries up then, we are concerned that the long-term health of communities and other industries will be put at risk by a mining company that runs out of money and does a runner. We have seen that time and time again in the Territory.

Senator PERIS: You also say in your submission that the drilling ponds around the Daly Waters region overflowed during the recent flooding events of late 2015 and that the contamination was released into the surrounding environment. Earlier I asked Mr Kelly whether he was aware that any gas drilling ponds had overflowed and he said, 'No.' Is he not correct?

Ms Hogan : It does not surprise me. It gets back to the issue of funding and having officers on the ground to look at this. Those ponds were there after the Saxon drillers for the Origin site left. The whole area was reported by the ABC to be underwater and so we can presume that those ponds would have overflowed. If that is the case, the fact that the Department of Mines and Energy did not know about that is a concern—the Territory is a vast area and there are not enough people on the ground to go out there to have a look before and after and measure what is going on. That is a No. 1 concern for many people.

Mr Harris : We have just been talking about the changes that need to occur with regulation within the Territory, but at the same time that DME is issuing licences to go ahead and frack. Wells are still being drilled and are going ahead, even though the legislative framework has not changed. It is quite concerning that this is happening. As Ms Hogan said, initially it was going to be 25 for the current year and now it has dropped down to five. We still do not know if those five will go ahead or not, but it is quite concerning that this is all happening prior to regulation change.

Senator PERIS: This goes back to what you were saying, Ms Hogan: you have a department that is the regulator as well as the promoter of the industry, and there is a huge conflict of interest in that.

Ms Hogan : Absolutely. What we would hope to see is an independent, expert scientific committee to oversee those decisions here in the Territory. We also appreciate the Senate taking the time to do this inquiry because we feel there needs to be federal oversight to ensure that our state and territory governments can properly regulate. To reiterate the point that Mr Morris made around shale gas and tight gas needing to come under that EPBC water trigger: it is crucial so that we can have that oversight and the benefit of the scientists and experts to provide advice here. According to the gas companies, shale gas is the next big boom for Australia. They want to see huge gas fields developed, for a large resource, with thousands and then, likely, tens of thousands of wells, if what happens in the shale gas fields of the United States happens here. So we need as much oversight as we can before that takes place.

Senator PERIS: Mr Harris, you did not go into detail in your opening statement, but is the Northern Territory prepared for a big boom in this area?

Mr Harris : My experience, particularly in Alberta and Saskatchewan, in Canada—when I was working there in 1988 and 1989, where there are hundreds of thousands of wells being drilled—is that there is a huge problem. With methane leakage, from both wells that were in production and wells that were abandoned, integrity of the well itself is a very difficult thing to achieve, to get full integrity. Not only is it the methane emissions that will be of large concern, depending on whether the wells sour, which means whether they have a hydrogen sulphide content—I worked in fields where people have died because of the lack of integrity on wells—but also we heard Mr Kelly from DME say that there will not be the need for so many wells. What he did not mention was the need for infrastructure to support those wells.

If wells are going to be approximately three kilometres apart, I think he said, and you have 1,000 wells, pretty soon the kilometres of road for access add up. When you extrapolate that across tens of thousands of wells, over time, that is a huge proportion of the landscape getting impacted on. Not only that, it opens up that area of the landscape for weed contamination and problems for pastoralists, with people accessing their land without their consent. Emissions from the wells, whether it be through leakage or flaring off of unwanted gases or controlling pressures in the wells, it is really big. With the exception of maybe one person in DME, I do not think our regulators have enough experience, in this area, to unleash this type of industry on the scale that will be required to make it profitable.

There has been a bit of talk about moratorium. That is the chance to get it right. We have seen from numerous government departments, over the past couple of years, activities occurring within the environment without proper approvals. We have seen simple things, like clearing undertaken without a clearing permit and departments posting comments for the clearing permit online. It is crazy to think that we can run ahead with this project, at such short notice, without the proper legislation being in place. As for DME and the conflict of interest, it is a huge conflict of interest. They are actively promoting this industry and they are going to be regulating it without the expertise that is required. I do not think the territory is ready for it at all.

CHAIR: Mr Morris, I want to talk about the expenses to landowners. I know that they ultimately, from what I gather, will not be able to refuse. They can go to court over compensation and things, but what problems do you see that farmers or families will have in this sort of negotiation?

Mr Morris : The first thing to note is that approximately 50 per cent of the territory is Aboriginal land, under Aboriginal land rights, and they do have a veto right at the exploration stage. That is a process that Mr Morrison and Mr Dalton outlined earlier. I do know, from experience with my clients, that many of them find that a heavy burden, to have to give up that veto right at the earliest stage, the exploration stage, where they are unable to have a complete picture of what a full-scale operation may look like. That is my experience with my clients.

In terms of the access agreements required, I appreciate that Mr Kelly has said that the Department of Mines and Energy will not look at those agreements. I have some level of concern that, potentially, an agreement could be arrived at with a great disparity, in terms of the particular party's legal expertise or the people who are able to assist them in negotiating that agreement. That is a concern to me.

It also should be pointed out that we were told recently that, if a matter were to go to arbitration, a party that, say, was not represented by the Northern Territory Cattlemen's Association would be able to choose a representative of their own. It is important—Mr Kelly spoke about not having the panel stacked at that arbitration and having equal representatives from government and industry. We have a government that supports this industry, so, in effect, you are stacking the panel if it only contains representatives of industry and government, because this government is pro this industry. That is fine, but, if you want to have a balanced panel, you have to have someone with independence—someone with an evidence based, scientific understanding of this industry who is able to provide some balance to that arbitration panel if there is disagreement. But, as you have outlined, if it is not on Aboriginal land, the landowner, whatever the land status, will not have a right, ultimately, to say no to this operation on their land.

CHAIR: Mr Tapp, have you any consultation with or approaches from mining companies? What were those dealings?

Mr Tapp : None at all. My property is under an exploration licence, but I have not had any interaction with them at all. It is probably because of my stance and they know they are not welcome. They have been next door and talking access agreements. I do not know the finer details of that.

I have a couple of points. On the flooding of waste-water dams, I was actually an eyewitness to the ones down at Daly Waters. I flew over in a helicopter and you could not see a waste-water dam; it was just literally two or three metres underwater. I have seen them in the dry, with the little ponds they have had there. I had witnesses with me. They are not lined; they are just dug out of the dirt and basically bodgie. We have been conducting frack-free surveys around the Territory over the last six or 12 months. We have had four signed up frack-free communities. There is Mataranka, which is just about to be done, the Katherine area, the Adelaide River and the Coomalie region, all with in excess of 95 per cent opposed to fracking. That says to me that this government ain't got a social licence to be fracking up here.

Ms Hogan : I think the gas field-free survey really demonstrates that community members, because they are not given the right to say no, are having to go to other means to try and have some sort of say in this process. They are feeling very disempowered, which is why people are talking amongst themselves, talking to their neighbours and wanting to declare their own communities gas field free. Astoundingly, what we have seen in the Territory, in relation to both the traditional owners of the Watarrka-Kings Canyon national park area who made that stand and also the Coomalie region, was that the government then came out and said, 'Oh, don't worry, we'll get rid of those applications, and that area, in my political part of the world, can be gas field free.'

So we are seeing an ad hoc approach from a government who are responding in a knee-jerk way to people when they do stand up. Good on them for listening to their constituents, but, at the end of the day, we are calling for a pause so that we can map out where the really important community values, cultural values and tourism values are. Where are the rivers that fishos need to be able to conduct the tourism businesses that should not have overflowing frack ponds next door? That sort of work has not been done to really map that out in a consistent way, so we are seeing community members throw their hands in the air and have to do their own work to talk to one another and try to get their own declarations through, because they have no right to say no to this industry. As we have heard from Mr Tapp, I find it astounding that there is a granted application for gas field fracking over his property, and yet he has not had any discussions with the company that has been granted that licence.

CHAIR: We have run out of time, so I thank you all for coming here today and talking with us.

Proceedings suspended from 10:29 to 10:42