The Northern Territory government has released its draft code of practice for onshore gas, a year after overturning its fracking ban, but is implementing a fraction of the recommendations for the industry.

The government is implementing 35 of the 135 recommendations made by the inquiry that led to the ban being overturned.

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These cover surface activities, well operations, wastewater management and methane emissions.

The government says it’s also implementing 15 of 31 recommendations required to get exploration under way this year.

Fracking or hydraulic fracturing is the process of injecting special fluids into cracks to force them to open further, making oil and gas easier and cheaper to extract.

The Territory banned fracking in September 2016 while it weighed up the risks. (Several other States retain bans).

An implementation plan was supposed to be done in July — last year — but a month after the ban was reversed, industry executives were already expecting it to be bogged down in red tape.

Already shares in Empire Energy (ASX:EEG), which owns 5.9 million hectares in the Territory’s McArthur and Beetaloo Basins “considered highly prospective for large shale oil and gas resources”, were up 5 per cent on the news to 2.1c.

Blue Energy (ASX:BUL) and Armour Energy (ASX:AJQ), both of which have territory in the Territory, were unmoved by this news.

What’s on and what’s not

The inquiry that led to the ban being overturned made 135 recommendations including setting up codes of practice, prohibiting the use of surface water for fracking, and requiring gas companies to hold a water extraction licence.

The new code does cover aesthetics — wellpads can’t be built where they can be seen from major roads — and wastewater management and monitoring as well as aquifer protection, but doesn’t cover where water for fracking should come from.

Water is a major community concern in fracking, both in the amount required in the process and the risk of contamination of groundwater.

The draft code of conduct doesn’t look at sources of water to be used in fracking, just at how it’s dealt with afterwards.
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In other ASX energy news today:

  • Morgans’ analyst Adrian Prendergast reckons Sundance Energy (ASX:SEA) is a buy but is downgrading its 2019 daily production forecast to 16.5 boe/d (thousand barrels of oil equivalent/day) from 17.9 kboe/d due to a gas processing bottleneck, but one that is due to removed from April.
  • The Clean Energy Council has released its 2018 snapshot of the renewable energy sector, saying 2.3 gigawatts of new capacity was added last year to an industry that now employs 20,000 people. Look out for our deep dive on this report later today.
  • Regal Funds Management has bought 6.34 per cent of Fremont Petroleum (ASX:FPL).

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