Green light for gas project: Narrabri Gas Project tenure to be granted

Despite a successful Federal Court challenge by Traditional Owners (the Gomeroi People), the National Native Title Tribunal (Tribunal) has now determined that four petroleum production lease (PPL) applications may be conditionally granted to Santos NSW Pty Ltd and Santos NSW (Narrabri Gas) Pty Ltd (Santos), in connection with its Narrabri Gas Project (Project).

The Tribunal’s determination highlighted that, while the Project’s contribution to the effects of climate change was a serious matter to be considered, the availability of a domestic supply of reliable, secure energy would offer a net public benefit, which supported the grant of the petroleum tenure.

Background

In 2014, Santos applied for four PPLs relating to the Project, covering approximately 924 square kilometres of land which is wholly within the area of the Gomeroi People’s native title claim.

To secure the grant of the PPLs, Santos was required to negotiate with the Gomeroi People under the Native Title Act 1993 (Cth) (the Act) regarding the terms of the Gomeroi People’s consent to the grants.

Having failed to reach an agreement, the matter was referred to the Tribunal for a determination as to whether the PPLs may be granted. In December 2022, the Tribunal determined that the PPLs may be granted, subject to conditions.

The Gomeroi People successfully appealed this determination in the Federal Court, on the basis that the Tribunal ought to have considered environmental factors (including greenhouse gas emissions) when evaluating the public interest in the granting of the tenements, as is required under section 39(1)(e) of the Act. For further details regarding the Federal Court decision, see our previous article.

Following the appeal, the Tribunal’s original determination as to whether the PPLs may be granted was set aside, and the matter was remitted back to the Tribunal for hearing and determination.

Public interest versus public detriment

The environmental and climate change impacts, particularly in the context of assessing the public interest of the Project, were central to both the Federal Court appeal and the determination which followed.

There was consensus between the parties regarding the relevant climate science, including that there are multiple sources of greenhouse gas emissions, and causes of global warming. As such the Tribunal considered, based on the evidence put forward, the greenhouse gas emissions of the Project specifically, and the consequential effects of those emissions including contribution to climate change, which the Tribunal noted was a “serious detriment to be considered”. This involved an assessment of the environmental impacts of the construction and development of the Project, as well as the impacts of emissions generated by the Project.

The Tribunal weighed this ‘public detriment’ associated with the Project against the overall public interest in granting the PPLs and facilitating the development of the Project, which has been declared a Strategic Energy Project for New South Wales.

Santos argued that if the PPLs were not granted, this may result in a ‘gap’ in the supply of energy on the east coast of Australia, and this would have short-to-medium-term detrimental impacts upon the local and wider community.

Significant weight was placed on this projected shortfall, and the public benefit in increasing the domestic supply of reliable, secure energy through the development of the Project, which is anticipated to meet approximately 47% of New South Wales’s current gas demand.

Upon weighing the ‘public detriment’ and ‘public interest’ evidence, the Tribunal concluded that the Project offered a public benefit overall (provided that the gas produced is supplied to the domestic market) and environmental and social impacts could be managed through the imposition of conditions.

Conditions of grant

The Tribunal determined that the PPLs may be granted, subject to Santos’s compliance with various conditions. The conditions imposed broadly address three matters:

Domestic supply

All of the gas recovered by Santos from the PPLs must be used for domestic supply only, to address the forecasted energy supply gap facing the Australian domestic gas market.

The Tribunal found that this was necessary to ensure that the Project would be in the public interest overall.

Aboriginal cultural heritage

The strengthening of Aboriginal cultural heritage protections was found to be required, including by the implementation and completion of an additional research program to ensure the protection and preservation of cultural heritage.

Notably, the Tribunal agreed with the Gomeroi Peoples’ contention that the current New South Wales heritage protection regime offers insufficient protection to intangible cultural heritage, and similar to other regimes across Australia, it relies on deterrence by penalising harm to cultural heritage, rather than identifying and protecting cultural heritage before harm occurs.

Environmental management

The Tribunal further required the implementation of a Ranger Program to manage Country, protect the environment, and monitor and manage ecological threats, including through weed control, the protection of water, and cultural burns aimed at minimising fire risk and damage. The conditions regarding the Ranger Program are intended to address the issues raised by the Gomeroi People (which were not contested by Santos or the State) in relation to the health, environmental, and ecological risks and impacts of the Project.

Implications

The determination has indicated that the Tribunal remains willing to support the grant of petroleum tenure, notwithstanding the ‘public detriment’ of greenhouse gas emissions and other environmental impacts (provided this is managed appropriately).

This will provide comfort to stakeholders in oil and gas projects, which continue to be targeted by environmental activists through legal challenges to drive climate change reform. However, there is less certainty for those looking to supply oil and gas to the international market.

The Tribunal’s determination has been met with criticism by the Gomeroi People, who have asserted that the Project should only proceed with full free, prior and informed consent, and will continue to oppose the Narrabri Project along with other activist groups.