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Beetaloo Basin's 'absolutely immense' potential spruiked at oil and gas conference, but big fracking tests loom

Companies like Tamboran Resources, are taking big strides to prove up Beetaloo gas reserves.  (Supplied: Tamboran Resources Limited)

After years of inertia, the small highway town of Katherine is suddenly on the brink of a boom, according to the titans of Australia's oil and gas industry.

Buried deep in the Beetaloo Basin, it is estimated there is enough shale gas to power Australia for 300 years, and right now, it is in demand as the war in Ukraine continues.

Extracting it for electricity could generate thousands of jobs, a billion dollars in revenue for the NT government over the next 20 years, and rapid economic growth in the closest service town, Katherine, according to Australian Petroleum Production and Exploration (APPEA) Director, Cassandra Schmidt.

But at a major oil and gas conference in Katherine this week,  Origin Energy's exploration and appraisal manager, Alexander Côté, said there were still many challenges ahead.

He said how to deal with wastewater could turn out to be one of the biggest and most expensive conundrums the industry will have to face.

The prospects of the Beetaloo are "absolutely immense", Mr  Côté said.

"It's going to be a question of can we demonstrate the deliverability? And can we actually drive costs down to where they need to be?"

Mr Côté says the goal is to reduce wastewater costs and demonstrate it can be done safely.  (ABC Katherine: Roxanne Fitzgerald)

2022 a big year for the Beetaloo Basin

At the conference, Mr Côté said after almost two decades of gas production in North America, where "they've done a good job of drilling out a lot of their top tier inventory," now was the perfect time for the Beetaloo to progress beyond the exploration phase.

Origin, Australia's largest gas explorer, has plans to drill two more wells this year close to its original Amungee well — between Borroloola and Daly Waters.

Alexander Underwood, the CEO of Empire Energy, said almost five years after the NT government controversially lifted a moratorium on fracking, the company was looking to move into production licences next year and then look to get into production and cash flow by 2024.

"Our company is very focused on getting into production as quickly as possible because the quicker we get into production and get some revenue flowing, the more money we can reinvest into continuing to build this massive resource base," Mr Underwood said.

But the vice president of Tamboran Resources, David Close — a  company currently facing a hefty fine for failing to front a Beetaloo Basin gas grants Senate inquiry — said demand for gas on the East Coast was going to be critical, and conceded it was not a given that investors would invest in the industry.

David Close says 2022 will be a critical year for the Beetaloo Basin.  (ABC Katherine: Roxanne Fitzgerald)

"The risks of being stranded for any number of reasons, the risk of social licence influencing governments, influencing investors, influencing regulators to the point plan holders don't see it in their interest to cooperate … these are just facts that may end up resulting as being stranded," Dr Close said.

"We'll do everything we can to collaborate to reduce that risk."

Wastewater challenges

To extract gas, companies must perform hydraulic fracturing, known as fracking, a controversial well-stimulation technique that produces large amounts of potentially toxic wastewater.

As it stands, there are no disposal points in the Northern Territory for this wastewater, an issue Mr Côté said presented "one of the biggest challenges" the industry wants an answer to.

At the conference, he listed evaporation ponds (currently in use), recycling the wastewater, trucking it to Queensland and injecting it into the Jamison or Moroak deep saline aquifers as some of the "obvious" solutions.

Protesters concerned about the risks of fracking attended the two-day Katherine and Barkly Region Major Projects Conference.  (ABC Katherine: Roxanne Fitzgerald)

In 2018, the landmark Pepper inquiry recommended the reinjection of wastewater into deep aquifers and conventional reservoirs "be prohibited, unless full scientific investigations determine that all risks associated with these practices can be mitigated".

Chief minister, Michael Gunner, committed to implementing the inquiry's full list of recommendations before the industry could move to production, but critics remain sceptical and concerned about the risks to the environment.

Dozens of protesters at the oil and gas conference rallied at the entrance, saying they were concerned about water, land clearing, and carbon emissions, which some projections estimate could generate 117 million tonnes of greenhouse gas.

Graeme Sawyer from the anti-fracking group, Protect Country Alliance said it was very concerning companies were contemplating injecting wastewater into aquifers that are part of one of the last river networks in the world not impacted.

He said earthquakes have increased at an earth-shattering rate in America, where wastewater has been deposited into aquifers, and the practice in the NT runs the risk of contaminating other water sources.

"Whether it's 15 years or 50 years, there's going to be failures," Mr Sawyer said.

"And when that happens, the system has the pressure capacity to push these substances up into the freshwater systems that people rely on."

Stuart Khan says it is critical that the industry has a thorough understanding of aquifers, as adding pressure can cause problems.  (ABC News: Simon Amery)

Stuart Khan, a professor in the School of Civil and Environmental Engineering at UNSW, said a thorough understanding of the interconnectivity of aquifers was critical, as adding to them could create irreversible damage. 

He said injecting water into an aquifer was like adding water to a sponge.

"Eventually, the sponge is going to start to leak," he said. 

"If there are even minor interconnections between one aquifer and another, those interconnections can become much more significant when you change the pressure gradients.

"If you pressurise the saline aquifer, the salty aquifer, the flows could be reversed. So, you might end up pushing saltwater into a freshwater aquifer."

Professor Khan said there were issues with evaporation ponds and transporting wastewater to Queensland as well.

He said evaporation ponds — banned in New South Wales — needed to be carefully designed to avoid any leaks, and as for Queensland, the state was also still looking for a good solution.

"Trucking the waste to Queensland really just moves the problem from one location to another," he said 

A spokesperson for Origin Energy said the company would evaluate each of the options for dealing with wastewater "on their merits whilst maintaining environmental standards and related safety considerations". 

"We are well aware of the Inquiry recommendation, and further studies and pilots would be required for [the re-injection of wastewater into aquifers] to be considered," he said. 

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