Features, Fossil Politics, Oil & Gas Leaks

Oil and gas companies line up for government handouts

Ship-loads of oil and gas, like this LNG tanker, are having trouble finding a buyer for their cargoes. Some are circling at sea.

By Eve Sinton • Fossil Fool Bulletin, 4 August 2020

As Scott Morrison’s hand-picked Covid-19 commission (NCCC) lobbies for a gas-lead economic recovery, the oil and gas industry appears to be very happy with the direction of the commission’s leaked slide presentation.

The Australian Petroleum Production & Exploration Association (APPEA) is apparently engaging with the federal government in a bid to boost exploration investment and cut regulatory hurdles.

According to The Australian, ‘‘quick-start’’ initiatives include accessing government loan guarantees to gain added security for juniors to access debt financing, promoting short-term licence permits, expanding a mining exploration tax credit incentive to the petroleum industry to spur greater investment and cutting overlapping environmental requirements between the states and the commonwealth.

Yet the oil and gas industry is floundering, slashing the value of assets world-wide, while dropping demand for oil and gas leaves laden tankers circling the ocean. Producers are desperate to wrangle deals and off-load their volatile products.

APPEA admits desperation

APPEA chief executive Andrew McConville admitted to The Australian: “The oil and gas industry is facing an enormous challenge in recovering from the economic impacts of the Covid-19 pandemic.

“The current market conditions are arguably the most challenging the industry has ever seen with demand destruction, excess supply and oil prices falling more than 75% over the first four months of 2020. The industry faces the challenge of how to return to growth and best place the industry to respond in supporting Australia’s economic recovery.”

Climate activist organisation 350.org Australia is calling for the Prime Minister to immediately rule out massive public subsidies to prop up dirty industries.

“Creating special rules for the gas industry and throwing public money at them when they are a polluting industry without a long-term future is simply reckless and should be refused.

“The [Covid-19] group is stacked with gas executives so it’s no surprise that they’re recommending support for dirty gas projects, but they are out of step with what the community wants, which is investment in renewable energy and the industries of our future.

Conflicts of interest not declared

A Covid-19 Senate Select Committee hearing on May 13th and documents obtained by 350.org under the Freedom of Information Act suggest that Manufacturing Working Group members who drafted the report have not had to declare or manage conflicts of interest, despite many having links to the petrochemical, oil and gas industries.

This includes one member of the Working Group, James Fazzino, who is a director of gas pipeline company APA. According to 350.org Australia, this is particularly concerning considering the final report appears to promote higher prices for gas pipeline owners and the Narrabri gas project, where APA is proposing to build the Western Slopes Pipeline.

Narrabri gas and pipelines promoted

“It’s extremely concerning that the Narrabri gas project and gas pipelines are being promoted when there are potential conflicts of interest concerns about members of the working group who are making the recommendations.

Taxpayer subsidies and slashing environmental protection from coal seam gas and fracking projects would be a disaster for regional communities, water supplies, and the livelihoods of farmers, according to Lock the Gate.

“The coal seam gas and fracking industries are losing industries – they’re losing money, losing water, losing out on the opportunity to move to cheap clean renewable energy,” Lock the Gate Alliance National Coordinator Naomi Hogan said.

“Let’s be clear, these tired old polluting fossil fuel industries were bleeding money before Covid-19 hit. They are not a solution to the economic crisis we now face.

“If these gas projects and proposed gas pipelines had any economic merit, or stacked up environmentally, they would not be going begging for special treatment and taxpayer’s support.

“They’re using their political influence to squeeze for hand-outs to pollute your kids’ future.

“Our economy of the future could boost fire and drought resilience, and support job intensive industries of all kinds move to cleaner production and manufacturing with solar and green hydrogen.”

Major concerns about NCCC

The NCCC has been plagued by controversy since it was first announced in March. Concerns that have come to light include:

• Multiple members of the NCCC have strong links to the gas industry, including direct interests in the development of gas projects that were later named as priorities in a leaked report by the Manufacturing Working Group under the NCCC.

• Neville Power is being paid $267,345 for his initial 6-month position, comprising his salary and expenses. Other Commissioners are receiving $2,000 a day.

• Neville Power has stepped back from board duties at gas company Strike Energy due to perceived conflicts of interest, but he remains a board member and major shareholder.

• Andrew Liveris has not been required to declare conflicts of interest, despite being on the Board of Saudi Aramco and Worley, as he has been appointed a “special advisor” to the NCCC rather than a Commissioner.

• A number of legal and integrity organisations, and Independent MP Zali Steggal, have raised the alarm about the lack of transparency and governance standards established for the NCCC.

• Environment groups have raised concerns that the NCCC has falsely claimed to have consulted with them.

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