The Australia Institute has a new report out that should be the headline around the country but barely gets a mention:
Australia’s giant offshore gasfields are paying almost no royalties, create few jobs and are a large and rising source of greenhouse gases, according to a new report from the Australia Institute.
The “Gas-fired robbery” report, released Monday, finds Western Australia receives only a tiny fraction of its revenue from an industry that generated $27bn in WA exports last year.
The report comes just days after a WA heatwave matched Australia’s hottest ever reliably recorded temperature of 50.7C and reportedly caused an outage at a nearby gas plant.
The $430m that ended up in the state’s coffers was a mere 1% of budget revenue, or half as much as it collected from motor vehicle registrations. By contrast, the iron-ore industry tipped $7.8bn into the 2019/20 budget, more than 18 times as much as gas.
This should surprise nobody. Last year, Shell declared it wouldn’t pay a brass razoo in tax forever:
Dutch giant Shell forecasts it will never pay Australia for oil and gas extracted for the Gorgon and Prelude LNG projects that it can sell for up to almost $4 billion a year.
Shell owns 25 per cent of the Chevron-operated $US54 billion Gorgon LNG project and 67.5 per cent of its Prelude floating LNG project that are both liable to pay Petroleum Resources Rent Tax.
Shell’s outlook of no PRRT payments is recorded in notes to the 2020 financial accounts for the global group released last week.
The note may not be apparent to a layperson, but the meaning is plain to an accountant: free gas forever from Australia.
What is the industry response? Playing the Joker card:
…Claire Wilkinson, director of the WA division of the Australian Petroleum Production and Exploration Association, said: “Western Australians know that natural gas creates local jobs and is essential to our community, no matter what this east coast outfit [the Australia Institute] suggests.
There are bugger all jobs in these operations. They were all temporary in the construction phase lasting a few years and are long gone.
Most have break-even costs under $10 and are now shipping roughly half the gas at $30 plus to Asia. We are talking about a robbery in the realms of tens of billions of unpaid tax while much of gas goes to China to build weapons to threaten Australian freedom, keeps the AUD high hollowing out other tradeables, and trashes carbon output targets with failed CCS.
The east coast gas cartel is even worse where the failure to install WA’s domestic reservation regime has added skyrocketing utility bills rendering the net economic contribution of the gas projects negative for living standards.
In all of my days studying the history of costs and benefits of extractive industries, Morrison’s gas cartel is the worst behaved I have ever seen.
It is the stuff of failed states.
