Gas exports: 56% given to corporations royalty-free

(AAP Image/Marion Rae)

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Australia Institute research has found that 56% of gas exported from Australia attracts zero royalty payments, effectively giving a public resource to multinational gas corporations for free.

Around 80% of Australia’s gas is exported as liquefied natural gas (LNG). Most of this gas is extracted from gas fields in Commonwealth waters, but the Australian Government has failed to levy royalties on gas feeding six of the seven offshore gas LNG export terminals operating in Western Australia and the Northern Territory. Overall, this means over half the gas exported from Australia is royalty free.

Key Findings:

  • No royalties are paid on 56% of the gas that is exported from Australia, including 73% of gas exported from WA.
  • Over the last four years, multinational companies made $149 billion exporting royalty free gas.
  • At least $13.3 billion in revenue could have been raised over the last four years had royalties been charged on royalty-free gas.
  • No royalties are paid on gas supplying major facilities owned by Chevron, Woodside (Pluto), Shell, Inpex and Santos
  • Royalties are only paid by the heavily subsidised North West Shelf and onshore fields.

“Many Australians will be shocked to realise that a large portion of the nation’s gas is given away, essentially for free,” said Mark Ogge, Principal Advisor at the Australia Institute.

“In the words of WA Treasury, ‘a royalty is the purchase price for a community-owned resource,’ and ‘the community expects a fair return for its petroleum resources’.

“However, in many cases Australians are getting no return at all for the sale of their gas.

“If you engaged an agent to sell your house for the best price, but instead they gave it to their mate for free, you would be angry. This is exactly what Australian governments from both political parties have been doing with our gas resources for decades.

“It is no coincidence that the Federal Government’s Future Gas Strategy does not mention the words ‘royalties’, ‘tax’ or ‘return’ in its entire 67 pages.

“Australians have missed out on better healthcare, education and public housing because the gas industry hasn’t been paying for the gas it exports.

“Australians have a right to know how we got into this absurd situation.

“Australia needs urgent reform to the tax and royalty system for resources to end this obscene giveaway.”

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