No federal support is on the table for Territory Labor's promise to ensure that all Beetaloo Basin emissions are offset, as the territory cabinet weighs its decision on whether to allow full-scale fracking to go ahead.
After appearing to reject the prospect of support earlier this week, responses from federal climate minister Chris Bowen's office confirm the Commonwealth is not offering any policy changes that will meet the territory government's long-standing requests for help with the ambitious guarantee.
NT Chief Minister Natasha Fyles has also been unable to point to any support that has been secured after taking the question on notice during a live ABC Darwin radio interview.
The territory government promised to secure federal support to ensure all emissions from development of the Beetaloo Basin are offset when it lifted its moratorium on fracking.
On Wednesday, small business minister Paul Kirby was asked whether the plan for onshore gas development in the territory was under threat.
"I wouldn't think so and I'm not sure what else you're asking me to contribute [beyond the statements from Mr Bowen and Ms Fyles]," he told ABC Radio Darwin.
He cited east coast demand for gas as a necessary "transition" fuel from coal-fired power as the reason a way to meet the territory government's commitment is needed.
"We know that the east coast badly needs this world-class gas supply that we've got under the Beetaloo and we know that we're too small a jurisdiction to be able to offset all of those emissions by ourselves here in the Northern Territory, so we have to find a way through," he said.
"That's the simple answer — we have to find a way through it, not just for the territory's sake, but for the nation's sake."
It is currently unclear how much Beetaloo gas would be available for east coast consumers, with a large percentage currently planned for export or use in Darwin.
Both governments say gas companies will be required to cover the costs of offsetting emissions. The territory government says other policy changes are required to ensure there are enough offsets available, but has not publicly detailed any specific proposed changes.
In a statement a spokesperson for the chief minister said discussions with the federal government were ongoing.
Mr Bowen's office continues to decline requests for an interview on the subject of offsets for the Beetaloo Basin.
A spokesperson pointed to reforms to the federal safeguard mechanism and broader changes to carbon credit rules but no other actions when asked to detail the Commonwealth's response to the territory's requests.
Gas revenue needed for "under threat" government services, minister says
On Wednesday, Mr Kirby repeated the territory government's argument about the importance of onshore gas development for the small jurisdiction's under-developed economy.
"I know that for the territory to progress — for us to be able to put roads into remote communities, to have schools, to have health centres, to have the right amount of police in the Northern Territory — we need to find more avenues towards our own own-source revenue," he said.
"The gas industry is certainly one of [those avenues]."
Around two thirds of the territory budget continues to be funded through federal government transfers, which fluctuate according to changes in the annual GST carve-up and political agreements.
Asked if public services are at risk if the territory fails to get a gas industry off the ground, Mr Kirby said they already were.
"Everything's under threat on a daily basis in the Northern Territory with a budget where we rely on 60 to 70 per cent from the federal government," he said.
"It is bloody hard work in cabinet, to be honest with you, to be able to do everything we want to do."
The gas industry has promised to generate hundreds of millions of dollars in economic activity in the territory government and create up to 6000 jobs.
Climate scientists say pushing ahead with any new fossil fuel developments at this point will derail the agreement to limit global warming to well below 2 degrees Celsius.
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Environment groups are now increasing pressure on the territory government to concede that its offsets promise cannot be achieved.
The commitment is known as recommendation 9.8 of the scientific inquiry into fracking commissioned by then chief minister Michael Gunner, who said all 135 recommendations would be implemented if fracking is to go ahead.
"They made a promise that if 9.8 couldn't be met, fracking wouldn't proceed," Kirsty Howey from the Environment Centre NT said.
"If they're going to keep that promise, right now, they could ban fracking in the Northern Territory.
"That would be, I think, a very popular decision with Territorians and very, very good for our climate in the territory and our future livability."
A recently-released CSIRO report, which has been heavily criticised by a prominent offsets expert, found emissions from a small-scale industry in the Beetaloo could be offset if a number of conditions are met.
They include the proofing of carbon capture and storage technology at scale and the use of up to 10 per cent of the carbon credits currently available to all Australian emitters.
Ms Howey dismissed the suggestion that changes to the safeguard mechanism could amount to fulfilment of the promise to offset 100 per cent of Beetaloo emissions.
"It doesn't cover life cycle emissions, so the safeguard mechanism can never meet recommendation 9.8," she said.
"Current federal government policies cannot achieve 9.8 and the fact that Chris Bowen is pointing to them, makes patently clear that they've got no intention of stepping in here."
The Country Liberal Party opposition also weighed in, accusing the Territory government of a conspiracy to "sabotage" development of the industry.
"Both our environment and the Northern Territory economy needs certainty, not more confusion," deputy leader Gerard Maley said.
Earlier this week Ms Fyles said cabinet was now considering final departmental reports on the implementation of the fracking inquiry recommendations.
Last month the Australian Petroleum Production and Exploration Association said it expected the recommendations to be fully implemented within weeks. The association declined to comment for this story.
