Direct contributions and handouts to the fossil fuel industry
Federal and state governments regularly hand out or contribute vast sums of money directly to the fossil fuel industry. In recent years, the Federal Government has announced plans to dole out hundreds of millions to the climate-wrecking gas industry, much of which is linked to its heavily-criticised and dubious “gas-fired recovery” from the COVID-19 pandemic. A mere handful of these measures, listed in the Government’s 2021-2022 budget, include:
- $173.6 million for roadworks in parts of the Northern Territory to facilitate the development of polluting gas in and around the Beetaloo Sub-basin,
- $30 million backing a proposed gas-fired power station in Port Kembla,
- $38.7 million for gas infrastructure projects to facilitate pumping even more fossil gas along Australia’s east coast,
- $24.9 million to facilitate the use of hydrogen in new gas power stations, even though hydrogen produced from gas and coal is highly polluting, and
- $74.3 million to “unlock Australia’s gas reserves” and accelerate operations in the North Bowen and Galilee Basins.
In addition to isolated announcements such as this, several Australian federal and state bodies and initiatives directly contribute to the expansion and continuation of the fossil fuel industry. They include:
Geoscience Australia is a government body that engages in fossil fuel exploration as one of its major operations. This is a service that it provides to the industry. One of Geoscience Australia’s major projects, named ‘Exploring for the Future’, is a $225 million initiative over the years 2020-2024. The program includes exploring for, and encouraging investment in, oil and gas by publishing data gathered using geophysical surveys, geochemical sampling, hydrological mapping and stratigraphic drilling.
This includes promoting oil and gas exploration in the onshore Canning Basin by commissioning imaging of the large area in Western Australia. Geoscience Australia states “the basin is significantly underexplored for hydrocarbon resource” and points to a report finding it “has the largest shale gas potential in Australia”.
Underwriting New Generation Investments program
The Australian Government’s Underwriting New Generation Investments (UNGI) program aims to provide ‘underwriting’ (a type of financial support) for electricity generation projects. As of Jan 2022, the Government’s UNGI webpage states that 12 projects have been shortlisted, including 5 polluting gas projects.
It’s unclear exactly what support, and how much of it, would be provided to the projects. UNGI has been criticised for lacking transparency, with the Australian National Audit Office (ANAO) having considered it for audit in FY2021.
Funding schemes for carbon capture and storage
The Australian Government announced it would contribute $500 million to the establishment of the ‘Low Emissions Technology Commercialisation Fund’ in November 2021, to be administered by the Clean Energy Finance Corporation (CEFC). While the fund has a positive-sounding name, it’s understood to be predominantly focused on investments in carbon capture and storage (CCS). CCS is an excuse for the fossil fuel industry to ramp up emissions, is eye-wateringly expensive, and detracts from well-established renewable energy technologies.
The Government has a long track record of handouts for CCS, having previously channelled these to the fossil fuel industry via the similarly-named ‘Low Emissions Technologies for Fossil Fuels’ (LETFF) program administered by the Department of Industry, Science, Energy and Resources. As at 30 June 2017, the LETFF’s ‘CCS Flagships’ program had received $217 million of its allocated $2 billion funding. Meanwhile, the LETFF’s ‘Low Emissions Technology Demonstration Fund’ provided $60 million in public funding for a CCS project linked to Chevron’s Gorgon LNG plant, which has been linked to significant emissions increases, was delayed by over two years, and has failed to meet its targets.
State government subsidies
In some instances, state governments have pledged subsidies to the fossil fuel industry alongside those announced by the Federal Government:
- The Victorian Government committed $50 million for the ‘Hydrogen Energy Supply Chain Pilot Project’, which aims to turn brown coal into hydrogen. According to Monash University’s Dr Patrick Moriarty, the project is “a way of making brown coal look green” that “would do nothing for the climate”.
- The NSW State Government pledged $1.01 billion in direct funding for programs that would massively boost gas supply.
- The South Australian State Government contributed $442 million to a broad-sweeping energy fund which would help “unlock gas supplies” in the state, and increase gas supply by 50 petajoules per year.
Meanwhile, in the decade to 2020, the Northern Territory Government doled out $94 million in subsidies and assistance measures to the onshore gas industry.
In 2015, the NSW Government sold Vales Point coal power plant to Sunset Power International for $1 million. By the end of 2020, the power plant was making over $100 million in profit each year for its new owners.
In October 2020, the Queensland Government announced a deal with Adani, allowing the coal miner to defer any royalty payments for an unspecified period.
National tax-based subsidies that encourage fossil fuel production and consumption add up to $12 billion every year.
There are many ways that taxpayer money supports fossil fuel production. Read more here: