Economic Risks

To understand the economic implications of Fracking in the Beetaloo basin many aspects and processes need to be considered, especially the changing energy options and the role gas is playing, especially unconventional gas or Fracking. There are a complex set of interacting forces within these processes and they all need to be considered.  These include the cost implications as well as the supposed benefits, and this analysis must include all of the social, cultural, and environmental aspects to these impacts, not just the direct financial and business impacts. There is supposed to be a Strategic Regional Environmental and Baseline Assessment (SREBA) to try to build an understanding these systems and potential impacts before any final decisions are made.  This was the major pillar of the Pepper inquiry report but logic would say you cannot determine whether fracking is safe, economic or viable until after this process is completed.

  • The Fracking business model is flawed and not profit making
  • Massive subsidies are required
  • High risks to other business sectors
  • High health risks
  • Fossil fuels in general are declining and Fracking is the most expensive so the first to go.
  • Significant global trend to decarbonise meaning declining demand for gas


Fracking Gas is really expensive because of all the extra wells that need to be drilled.  The model has been shown to be flawed and this culminated in over $300 Billion US in losses and over 190 bankruptcies in the United states.  An industry with such high cost base is not one to base an economic revival on.

This is especially the case when a major global trend currently is to move to a much cheaper cost base model using renewables to produce energy.

The second key risk is the way this industry breaks other local businesses and industry by distorting local costs.  Tourism and Agriculture are two examples


These implications need to be considered from the stand point of Ecologically Sustainable Development (ESD) principles which includes consideration across time. Many of the purported benefits are short-term, typically tied to the construction phase, whereas many of the risks are longer term. This especially relates to the long-term threat to water systems and aquifers due to the failure of fracking wells over time.  With issues like sulphide reducing bacteria1 and acid water dissolving well casings, and over time local governments and communities will bear the brunt of this risk.  Pennsylvania is a case in point where massive fracking activity has left the state with an number of critical health and pollution problems. Their recent (June 2020) Grand jury report into Fracking explains this and includes elements like testimony from residents who live near fracking sites that included a woman who said her family started getting sores all over and became sick to their stomachs, and had trouble breathing. Others spoke of black sludge or slime clogging well-water pumps that cost homeowners thousands of dollars to fix.They cited more testimony of pets becoming violently ill, farmers seeing horses die, and livestock becoming infertile.

The scenarios also need to be considered in light of the rapidly changing dynamics in the energy space and policy in relation to reductions in carbon emissions.  It is also vital to understand the reality of these processes in play around fracking, not just the theoretical models. Rarely do the economic benefits go to the local communities who see no lasting benefit from Fracking gasfields.

In the 2019 Frack-finding tour organised by tourism operators and PCA groups there were repeated examples where significant community disruption and social impacts were identified by residents living in the Fracking areas of QLD and NSW.  The economic benefits were not apparent to the residents in local communities.  In fact, again negative impacts on local businesses through increased business input costs and competition for staff and resources were noticed.

There are a number of areas of study that highlight the risks to areas from mining booms but fracking has an additional set of risks above and beyond conventional gas extraction.  One example is the boomtown syndrome.  This link provides access to some background to this process.

There are also flow on effects from these processes that impact in a number of ways on the local economy.  As an example, the NT Governments fixation on Gas means it is likely to miss the opportunity to invest in renewable energy and possibilities that a much cheaper energy system offers to the future development of the NT.