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Potential for shale gas harvesting to re-build the NT economy

Urban Development Institute of Australia (NT) members, as for many other businesspeople in the NT, are currently experiencing very flat economic conditions.  How can this be the case, when economic indicators are strong and we are nearing the completion of the very large Icthys project?

The fundamental reason is that we are currently experiencing limited net population growth and consequently limited demand for new houses and apartments, as well as for many other products and services.  The slow growth is largely because our net interstate migration loss is currently higher than it has been for a long time.

Economic peaks and troughs have a serious effect on the development industry, which is characterised by long time spans (approximately five years as a minimum) between making a decision to build and completing the project.  In recent years we have built housing to cater for an expected market which has not materialised, causing an oversupply in the market.

It seems the Northern Territory is unable to shake off the cyclical, roller coaster nature of our economy, characterised by significant peaks and troughs in employment.  A key reason for this has been periodic major projects, as well as external impacts on the major industries which drive our economy.

These external impacts include terrorism, spikes in fuel prices which affect costs of air travel and freight, fluctuations in the value of the Australian dollar, economic conditions in countries where our tourists originate from, competition from interstate and overseas, peaks and troughs in supply, as well as fluctuating market prices for our agribusiness and mining products.

All of our industries which are here for the long-term help to underpin our economy, and any growth in jobs, for example due to significantly increased Defence spending on infrastructure and equipment, makes an important contribution.

But despite the hard work, innovations and technological changes we have experienced in all of our industries over very long periods, the Northern Territory continues to experience significant fluctuations in our economic conditions.  Can we progressively shift our economy onto a more stable and predictable base? And if so, how could we do this?

One way is to build our population, which could be achieved through a combination of attracting more students and more retirees, as well as more workers.  Demographers see the potential for attracting more overseas migration to the NT to fill new jobs, but we will need more industry to generate those jobs.

Of all our current major industries, onshore gas appears to have strong potential to shift the NT economy towards a more stable pattern, at least in the long term.  The reasons for this include, but are not limited to:

  • Onshore shale gas harvesting produces an energy source and known reserves can provide many decades of supply;
  • The gas reserves belong to the NT and a long-term flow of royalties will stay in the NT when the gas is harvested, providing more money to supplement necessary infrastructure and therefore growth;
  • Onshore gas has many uses which can add value to our economy, such as through providing energy for manufacturing, reducing the costs of power generation on cattle stations and communities, and enabling the establishment of new industries based on by-products from the gas itself;
  • Access to a stable, relatively clean source of energy can help Australia and the NT transition to renewable energy sources over coming decades.


The environmental impacts of large projects should always be a critically important factor in making decisions about industries we allow to operate, because our pristine environment is a fundamentally important part of the unique tourism and recreational fishing opportunities we offer, as well as the lifestyle many of us enjoy.  We need to protect the environments these industries and our lifestyles depend on.

But we also need to build our population, re-build our economy and provide conditions which will enable businesses to operate here, and provide employment sustainably – a position which we believe both major parties support. 

UDIA (NT) recognises that onshore shale gas harvesting is a major point of difference between parties in the lead-up to the election, with Labor announcing a pause in further onshore gas development while an independent review is conducted and the Country Liberals having already decided that onshore gas is a safe industry.  The election will determine which approach is supported by the majority of electors.

We believe a well-managed and properly regulated onshore gas industry has the potential to change our economy significantly over the longer term.  Hence if voters support Labor’s position on this issue, UDIA (NT) will be advocating for a timely, scientifically valid and objective evaluation of the environmental and economic impacts, as well as benefits, of the shale gas industry.