Gaslighting Australia: the Australian Government’s Commitment to Expanded Gas Production

On 9 May 2024, a week before the much anticipated Federal Budget, Minister for Resources Madeleine King unveiled the Australian Government’s Future Gas Strategy. This 110 page report sees gas as central to Australia’s domestic energy use and export portfolio “to 2050 and beyond”. As she announced it, Ms King also declared that gas will be central to achieving carbon neutrality by 2050 as it will not only be economically necessary but would help to “firm renewables”. As we heard Ms King’s announcement, and read the report, we felt a sense of déjà vu. What is proposed sounds remarkably like the former Coalition Government’s “Gas Lead Recovery” announced in 2020 by then Prime Minister Scott Morrison.

In our recent article, “Gaslighting Australia: The Instrumental Power of Australia’s Mining and Energy Industries”, we look back on the last decade of Australia’s climate policy inaction. Based on our research, it seems likely that the current strategy, like former strategies, may have more to do with industry-government links than economic realities. It has little to do with achieving carbon neutrality.

Our analysis starts by noting that over half Australia’s greenhouse gas (GHG) emissions come from the extractives and energy industries. Furthermore, it is not so much ‘the industries’ that are responsible but rather a handful of corporations, around ten to be precise. Australia’s biggest GHG emitter is AGL Energy, responsible for 13 percent of Australia’s total 2020 GHG emissions. Others in the top ten include almost household names like Woodside, Chevron and Origin Energy. The Australian Government’s Future Gas Strategy would seem to let these corporations off the hook, rather than drive the changes that they must make to their business models.

It could be contended that this is hardly surprising because fossil fuels are the cornerstone of Australia’s economy. They are, if you like, essential to Australia’s economic interest. For example, last financial year liquefied natural gas was Australia’s second largest export by value. 80 percent of Australia’s LNG that is exported, with China, Japan, and South Korea together consuming more of Australia’s gas than is consumed in Australia. This highlights the point that there cannot be a shortage of gas for ‘firming’ when the vast majority of it is being exported, so it seems more logical that there are economic reasons for further increasing gas production.

Yet, while gas is a huge part of Australia’s export portfolio this does not translate into benefits for Australian taxpayers. The ten corporations that were among Australia’s biggest GHG emitters in the 2020 financial year when Scott Morrison made his announcement paid very little tax. Some, like Origin Energy which earned $14.5 billion and Chevron which earned $12.2 billion, paid no tax at all. And while it is true that mining companies pay royalties – e.g. in 2019 $7.3 billion from coal and petroleum – the International Monetary Fund conservatively estimates that $65 billion is spent every year on fossil fuel subsidies. The Fuel Tax Credit Scheme alone costs the government more than the army or the air force each year. Furthermore, Australian shareholders are not benefiting because the Australia Institute finds that gas exporting companies are on average 96 percent foreign owned.

It seems clear that the corporations are getting a very good deal, but Australian taxpayers and shareholders are not. Neither are Australian workers because only around 0.2 percent of the workforce are employed by oil and gas companies. Whilst former Prime Minister Scott Morrison often claimed that mining is “the backbone of so many communities in regional Australia”, the reality is that Melbourne and Sydney account for the highest density of mining jobs. By comparison, 13.9 percent of the workforce is employed in health care and social assistance, and many more of the jobs in these areas are in regional Australia. In fact, over seven times as many as in extractives industries.

To be clear, Australia’s largest GHG emitters require a lot of public handouts, do not pay dividends to Australians and provide comparatively very few jobs. The economic arguments alone simply do not stack up. Given the enormous amount of gas already being produced for export, ‘firming’ also does not seem a problem on the path to carbon neutrality. Both the economic and environmental links seem tenuous. However, the links between the fossil fuel industry and Australia’s major political parties are clearer. For example, oil and gas giant Woodside, Australia’s 9^th biggest GHG emitter, has disclosed a $110,000 Platinum Corporate Membership to both the Labor and Liberal parties. This membership grants access to events and meetings including the Budget Night dinner, federal parliamentary briefings, boardroom policy forums, and dinners with the party leader/Prime Minister. Neither of the major parties have disclosed Woodside’s memberships, but the company itself has.

Likewise, although there is a considerable lack of transparency when it comes to political donations, what we do know is that gas companies make large donations to both political parties. Again, we tend to know this because the corporations declare what they are spending, whereas the political parties tend not to. In the 2019-2020 financial year Origin Energy declared that it spent A$33,400 on donations to the Liberal Party, but the Liberal Party did not disclose any donations from Origin Energy. The federal political parties did not declare any donations from the Australian Petroleum Production and Exploration Association (APPEA) in the 2020-21 financial year, whereas APPEA declared donations of $107,000. Global lobbying index InfluenceMap lists APPEA as one of the top 20 most obstructive climate lobbyists internationally. Overall, in the 2020 financial year when the Morrison Government’s Gas Lead Recovery was announced, gas donations well outnumbered coal donations. $300,000 came from coal companies and peak bodies compared to $700,000 coming from the gas industry.

Appointments are also commonplace between the fossil fuel industry and government. In 2021, 160 current or former Australian politicians, bureaucrats, and political staffers had direct employment links to the fossil fuel industry. Of the then current or former politicians, all but three served in ministerial roles, and every single one of them occupied key portfolios related to energy and resources. Furthermore, Scott Morrison’s hand-picked National COVID 19 Coordination Commission was chaired in 2020 by Neville Power, Executive Director of Strike Energy, a gas exploration and production company. Many other members had fossil fuel industry links.

Of course, there is no way to prove that party memberships, donations, appointments and other links with the fossil fuel industry produce results. Yet, these links seem more logically consistent in explaining the promotion of gas and other fossil fuels than the economic benefits or the industry’s indispensability to firming renewables. In our article we conclude that continued support for gas and other fossil fuels does not necessarily turn on the political ideology or orientation of the Australian Government, but whether or not the corporations producing these are able to capture it. It seems they may have managed to do so again.