By Chris Johansen
Fossil fuel companies, ably supported by their oil and gas industry peak body, the Australian Petroleum Production and Exploration Association (APPEA), are not only masters of greenwashing, but also of eyewashing.
They claim that the LNG industry of North West WA is a pillar of the WA and Australian economy, and a major provider of employment.
However, when the facts and figures around the contribution of the LNG industry to the WA economy are scrutinized, a different picture emerges.
Such scrutiny was undertaken by The Australia Institute in a recent report entitled “Gas-fired Robbery”.
This report found that “approximately $425 million in gas royalties was collected by the WA Government in 2020/21, making up just 1 percent of Western Australian Government revenue, less than half the amount collected from motor vehicle registration.” This was almost entirely collected from companies operating from the North West Shelf.
Negligible revenues were obtained from other offshore operations ‒ Shell’s Prelude FLNG, Chevron’s Gorgon LNG and Wheatstone LNG and Woodside’s Pluto LNG. These projects paid virtually no royalties to the Western Australian Government and no Petroleum Resource Rent Tax (PRRT) to the Australian Government.
“They have effectively been given the gas for free”.
Companies can avoid paying PRRT or company taxes due to the generous deduction rules that apply. Simply put, creative accountants balance off profits against costs over space and time, and neither state or federal governments seem very bothered about this, on behalf of the citizens they are supposed to be representing.
But it gets worse. On top of the massive gas giveaways, the Australia Institute reports that “the Australian and Western Australian governments continue to subsidise these companies. Taxpayers have long underwritten the development of the LNG industry. To 2010, the WA Treasury estimated the net cost to the state of subsidising LNG developments to be $8 billion.
In 2019-20 the Western Australian Government spent $94 million of public money on subsidies to the gas industry”.
The WA LNG industry paints itself as a major employer in the state. However, figures reveal that the industry employs only 1 percent of the state workforce. Construction generally employs 10 times more people. Further, employment in the LNG industry is very unstable.
The report found that “from May 2020 to February 2021, as Australia’s economy was recovering from the initial shock of pandemic-related shutdowns, the gas industry shed 10.5 percent of its workers, the largest fall in employment of any industry”.
Also, the LNG industry in particular is very capital intensive, substituting labour for machinery and other capital equipment and technology. For each $m sales income it supports only 0.3 jobs whereas private education and training support 14.9 jobs.
But how can it be possible that such blatant daylight robbery, shrouded in dubious claims, can occur in a supposed democracy. The citizens of that democracy are supposed to be the owners of the natural resources within their jurisdiction but these resources are essentially being gifted to already wealthy multinational companies.
Furthermore, the use of this resource, natural gas, is a major contributor to global climate change, to which the citizens of WA are particularly vulnerable (e.g. 20% reduction in rainfall in SW WA over the last 50 years).
Well, this apparent enigma has been explained in full in a 2020 publication by 350 Boorloo Perth, titled Captured State.
This report documents how fossil fuel companies exert their influence over the WA Government and various regulatory bodies, through intensive lobbying, targeted political donations and an extensive revolving door system between politics and the industry.
Join us in our campaign to bring the truth about the fossil fuel industry to light and undermine its social license here in WA!