What will the donors think? Liberal/Labor refuse to act without nod from Big Gas

Energy & Environment, Featured||
Source: Exxon, Bass Strait

Labor claims it’s a safety issue, Liberals say it’s a drafting issue. The bigger issue is how both major political parties have capitulated to the oil and gas industry again, this time voting to keep offshore petroleum production data secret. Callum Foote reports.

The power of money in politics is rarely so blatant as it is in the decisions and outcomes struck by Australia’s politicians to profit the gas industry.

Last month, the Senate debated an amendment to the Offshore Petroleum and Greenhouse Gas Storage Bill, to clean up the mess that the Northern Endeavour platform had caused and avoid the costly wastes of taxpayer money. In short, Woodside had tried to sneak out of its commitment to clean-up a Timor Sea oil rig by flogging the assets to a tiny company which soon collapsed.

Then, making things even worse, the Government awarded Woodside the contract to clean up the mess it had created. Thankfully, this did not escape the notice of the Senate cross-bench – which does not benefit from gas sector donations as do the major parties.

In the wake of the Woodside debacle, Senator Rex Patrick proposed an amendment that would increase the transparency for the offshore petroleum industry by making the monthly production data and CO2 pumping information – data already provided to the Department of Industry, Science, Energy and Resources (DISER) – publicly available.

The purpose of the Patrick amendment was to increase the transparency of oil and gas title/field information which has been shown to be in the public interest by the 2014 Wood Review from the UK and a recent report commissioned by DISER itself.

A market or a cartel?

For years, analysts had been calling into question the very claims by the gas industry that there is a “market” in gas. The gas sector is dominated by effectively four major players: BHP-Exxon (who have joint marketing arrangements), Origin, Santos and Shell. Typically, a market will show buyers and sellers, prices, and “depth”, that is, how much volume is on offer and at what price.

What they call the gas “market” in Australia, critics call the “gas cartel”, because there is no disclosure of buyers, sellers, prices, volume. It is all a secret controlled by four major players. The failure to have an open market has cost ordinary Australians dearly. Despite this country being the world’s biggest exporter of gas, customers pay among the highest prices for gas in the world.

The chief beneficiaries are the four cartel operators, and these and their lobby group proxies, are among the most prolific political donors.

In 2020, DISER commenced a review of the Offshore Petroleum and Greenhouse Gas Storage (Resource Management and Administration) Regulations 2011 (RMA regulations) ahead of the regulations sunsetting in April 2024.

In doing so, they enlisted the services of private economics and policy consulting firm ACIL Allen. ACIL Allen was tasked with determining whether it was in line with the RMA regulations that the geo-scientific petroleum and greenhouse gas data be disclosed in the public interest.

ACIL Allen found that the monthly production reports Senator Patrick wanted made public were not classified as ‘excluded information’ and had only been kept confidential because the National Offshore Petroleum Titles Administrator (NOPTA) had decided it wanted to keep the information under wraps.

“No sound reason”

ACIL Allen’s report was conclusive in asserting that “there do not appear to be any sound economic or ethical reasons for the Government to support permanent confidentiality of most of the information” when referring to the monthly production reports.

“Indeed,” the report continues “it is not apparent why this information should not be released promptly. The information in these categories would be valuable to other explorers and would facilitate better informed activities.”

The report concludes that this information is “clearly in the public interest” and notes that the South Australian government already published analogous data without their petroleum industry going bankrupt.

When it came time to vote on the amendment, both major parties disregarded the advice paid for by DISER, instead choosing to keep the information secret.

Consulting or kowtowing?

Labor Senator Murray Watt criticised Senator Patrick for not “consulting with industry” and revealed to Parliament that “Labor have consulted with industry, who have argued that technical advice should have been provided alongside this proposal to inform the amendment given its complexity.”

Minister Watt went on to argue that the amendment could have “unintended consequences for the safety of these projects and the environment”.

Moments before this, Minister Watt also denied having any knowledge that oil and gas giant Woodside made donations to the Labor party. Woodside has donated $1.4 million to Labor over the last 10 years, and $110,000 in 2019.

Senator Watt refused to answer when asked what safety implications could arise from making production data public, nor how the environment could be impacted from doing so.

For the Liberal Nationals, Senator Ruston claimed that the legislation may have unintended consequences and that “We also need to bring the industry along to make sure we understand the implications for them as well.”

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