Zero royalties charged on $111 billion in WA gas sales

by Mark Ogge
(AAP Image/Marion Rae)


Australia Institute research has found that 73% of gas exported from WA attracts zero royalty payments, effectively giving a public resource to multinational gas corporations for free.

Over the last four years, $111 billion worth of liquefied natural gas (LNG) was exported from WA, derived from royalty-free gas.

Key Findings:

  • Around 90% of gas produced in WA is exported as LNG, mainly extracted from Commonwealth waters.
  • No royalties are paid on 73% of the gas that is exported from Western Australia.
  • No royalties are paid by Chevron’s Wheatstone and Gorgon LNG, Woodside’s Pluto LNG and Shell’s Prelude LNG.
  • LNG worth $111 billion was exported from WA, royalty-free, over the past four years.
  • Royalties are only paid on gas from the heavily-subsidised North West Shelf and onshore fields.
  • At least $9.6 billion in revenue could have been made if royalties had been charged on royalty-free gas over the last four years.

“Many Western Australians will be shocked to realise that a large portion of WA’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 Western 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 sixty-seven pages.

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

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

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