Environmental groups will go to court in an attempt to stop resources minister Keith Pitt handing $21m in grants to a gas company seeking to frack the Beetaloo Basin in the Northern Territory.
The Environment Centre Northern Territory (ECNT) and the Environmental Defenders Office on Thursday launched urgent proceedings in the federal court alleging the minister’s decision to award the grants to gas company Imperial Oil and Gas, a subsidiary of Empire Energy, was unlawful.
According to court documents, it will be alleged that the minister failed to ensure the expenditure was a “proper” use of money and “efficient, effective, economical and ethical”, as required under public governance laws.
The case will argue the minister failed to consider the potential increased risk of climate change if the Beetaloo Basin is opened up to gas companies. It also argues the minister failed to examine the risk of publicly-funding gas projects, when the world is reducing fossil fuel use.
ECNT co-director Dr Kirsty Howey said the groups wanted to see “taxpayers money used wisely and with all the consequences being fully considered”.
“Granting $21 million to a private fossil fuel company should only be done after all care is taken to examine the impacts on climate change, the environment and the community,” Howey said.
Opening up Beetaloo to gas development is part of the Morrison government’s gas-led recovery plan. The Coalition set up the Beetaloo Cooperative Drilling Program to incentivise exploration in the basin, and the first three grants went to an Empire Energy subsidiary.
The groups are now asking for an undertaking that the money will not be transferred to Empire prior to the court deciding on the legality of the expenditure.
The Environmental Defenders Office chief executive, David Morris, said the case was about “whether the proper process has been followed”.
“Our client will argue that before making a decision to grant these funds, the relevant minister needed to make reasonable inquiries into a range of risks, including climate and economic risks, that may arise from the expenditure,” he said.
“We will argue on behalf of our client that the federal government did not make these reasonable inquiries, and thus the minister’s decision is invalid.”
Pitt described the case as another example of “activists using the courts with baseless allegations to try and delay nationally important resources projects”.
“This latest case of green ‘lawfare’ declared on legitimate projects threatens to delay an estimated 6,000 new jobs being delivered for the Northern Territory along with around $37 billion on economic activity,” he said.
“Grants are provided to companies that possess the highly specialised skills to meet the challenges of developing the Basin as determined by an expert assessment panel.”
He said the grants were awarded in accordance with the grant guidelines.
Empire Energy was approached for a response.
Separately, a Senate inquiry into fracking the Beetaloo on Wednesday heard evidence about Empire and other grant recipients.
Empire’s chair is Paul Espie, a frequent Liberal donor and chair of the Liberal-aligned Menzies Research Centre.
Liberal senator Jane Hume has previously described Espie in parliament as a doyen of the party.
The company’s managing director, Alex Underwood, told a Senate inquiry on Wednesday that he had met with the federal energy minister, Angus Taylor, and praised the grants program in March, just prior to the grant guidelines being released.
The company has denied it lobbied Taylor to obtain grants or that Espie’s links to the party played any role whatsoever.
During Wednesday’s hearing senators also heard evidence about two other companies seeking to exploit the basin.
The not-for-profit group Publish What You Pay Australia investigated the corporate structures of both Sweetpea Petroleum and Falcon Oil and Gas Australia, finding both had links to the tax secrecy jurisdiction of Delaware.
Falcon, it told the inquiry, was linked to Russian plutocrat and Vladimir Putin ally Viktor Vekselberg, who held a 16% stake in its parent company.