They have dubbed it “green”, about “clean energy industries” and “environmentally sustainable manufacturing”; yet Darwin’s Middle Arm Sustainable Development Precinct is all about subsidising fossil fuels. Callum Foote reports.
Labor has announced a $1.5 billion Budget hand-out for the Middle Arm ‘Sustainable Development Precinct’ in the port of Darwin.
Public subsidies for fossil fuels already run at a heady clip of $10bn a year, if you include fuel subsidies. And despite all the greenwashing and tricky language over the development of a second port for Darwin, the Albanese government has just slotted the fossil fuel industry another $1.5bn, at least.
Is it a broken election promise? Pretty close. Climate Minister Chris Bowen said the government would not stop new private investment in fossil fuel projects but vowed there would be no government money directed at new fossil fuel developments.
The reality of Middle Arm however is that the precinct will finance the development of fracking in the Beetaloo Basin. That gas will be used to power the manufacturing at Middle Arm. Moreover petrochemicals, a large feature of the project, deploy gas in manufacturing and the Middle Arm LNG plants turn gas into liquids for export.
Then there is the carbon capture and storage (CCS) commitment, another promised feature of the project. CCS has been discredited for not being commercially viable. This project is all about gas. It is not green at all. There are even questions over the hydrogen promises, will it be green hydrogen or brown?
According to Solomon Labor MP Luke Gosling: “This project, which is focused on assisting emerging clean energy industries, will also help our nation find new export opportunities for green hydrogen and critical minerals and environmentally sustainable manufacturing”.
What Gosling didn’t tell Territorians is that since its inception, the Middle Arm project has been designed by gas lobbyists to process and export petrochemical products using gas from fracking the Beetaloo Basin.
The development was originally labelled an “industrial hub” by the NT government as early as 2018 before its rebranding.
In fact, the CEO of fracking company Tamboran Resources, Joel Riddle, recently told a Federal Senate Inquiry that “gas that will be extracted from the Beetaloo will be necessary for a full range of industrial purposes at the Middle Arm Sustainable Development Precinct, near Darwin. This includes ammonia and urea production for fertiliser, hydrogen production, energy-intensive manufacturing, power generation and LNG export”.
The Northern Territory government has been angling for a petrochemical production plant since November 2018, when the NT and Commonwealth governments committed themselves to “establishing the NT as a world-class gas production, manufacturing and services hub”, including “establishing gas-based manufacturing and services”.
The parties agree to “delivery of infrastructure and programs in support of the Northern Territory Gas Industry and gas leveraged industries”.
Two years later, in November 2020, the Tertiary Economic Reconstruction Commission, chaired by former Dow Chemicals boss and Saudi Aramco director Andrew Liveris, released its final report recommending investment in “onshore and offshore gas developments and manufacturing, including low emissions petrochemicals”.
Again, that same month, a Deloitte report commissioned by the Department of Industry into the viability of fracking in the Beetaloo Basin mentioned that “several downstream industries are being considered for Darwin (Middle Arm) that could leverage off large volumes of product coming from the Beetaloo Sub-basin”, including a methanol plant, an ethane cracker, and an ammonia plant.
A draft program for the precinct as well as a report, both released this year, included a list of industries as part of the environmental impact assessment all of which are petrochemical based and describe the development described it as having “a focus on low emission petrochemicals, renewable hydrogen, carbon capture storage and minerals processing.”
During the Minister for Resources Madeleine King’s visit to Darwin in July to re-announce the $1.5 billion funding for Middle Arm, she clarified it was for gas manufacturing and not a defence port. (The Coalition had effectively sold the Port of Darwin to a Chinese company via a long term lease.)
A Northern Territory Government fact sheet released in August 2022 includes a map that shows the industries proposed for development at Middle Arm being predominately gas-based.
There are numerous other examples demonstrating that, at all levels of corporate and government decision-making the Middle Arm development has been designed to support the fracking of the Beetaloo basin.
Co-Director of the Environment Centre NT Kirsty Howey says, “The Minister’s commitment of funding for the Middle Arm Industrial Precinct is simply shovelling huge amounts of taxpayer funds to the climate-wrecking fossil fuel industry. The Albanese Government can’t have it both ways: you can’t take action on climate and fund climate-destroying projects like Middle Arm.”
Subsidy for billionaires
The financial beneficiaries of fracking the Beetaloo are mostly foreigners. One of the direct beneficiaries of the $1.5 billion government subsidy is Texas oil billionaire Bryan Sheffield a keystone investor in Tamboran Resources. Tamboran snubbed the Parliament of Australia by refusing to front a Senate hearing earlier this year.
Another billionaire is the Russian Viktor Vekselberg. The Kremlin-connected billionaire has been on the US sanctions list since 2018 and the UK’s since March this year. He is the biggest owner of Falcon Energy, which is in a partnership with Origin Energy with massive exploration permits to frack the Beetaloo.
What about the hydrogen production?
While hydrogen has been billed as the clean alternative to using gas to produce power for general purposes as well as steel production, where the hydrogen comes from makes all the difference.
Hydrogen made from renewable energy, such as the WA renewable energy project shut down by ex-Environment Minister Sussan Ley last year, is a clean alternative to gas power known as Green Hydrogen. However, hydrogen produced through fossil fuel energy, known as Brown Hydrogen, results in equal to or greater emissions than if the fossil fuels were used for power directly. That is mostly due to the additional leakages emissions in producing and transporting hydrogen.