Direct contributions and handouts to the fossil fuel business

One of the first acts of Keith Pitt as the new Minister for Resources was to provide $4 million to Shine Energy to conduct a feasibility study for a proposed 1 GW coal-fired power station at Collinsville in Queensland. An existing coal power station at Collinsville with generation capacity of 190 MW was decommissioned in 2018 but there's now a push within the federal government to revive it. Meanwhile, since the closure a solar power farm generating 42 MW has been built on adjacent land. Even coal baron Trevor St Baker has questioned whether there is a sound business case for project.

Several federal and state bodies and initiatives directly contribute to the expansion and continuation of the local fossil fuel industry. They are:

Geoscience Australia

Geoscience Australia is a government body that engages in fossil fuel exploration as one of its major operations. With a specific focus on offshore reserve development, Geoscience Australia also provides exploration data and other support to fossil fuel companies. This federal government institution devotes $29 million dollars to exploration annually. This figure is boosted by extra funding from within the national budget.

Department of Industry, Innovation and Science

The Australian Government’s Department of Industry, Innovation and Science runs the low emission technologies for fossil fuels (LETFF) program, which supports the research and development of fossil fuel technologies, including those applied to coal-fired electricity generation and coal mining. This involves providing direct payouts to fossil fuel companies and projects.

The Australian National Audit Office calculates that as of 30 June 2017:

  • LETFF’s ‘National Low Emissions Coal Initiative’ had received $233 million of its allocated $500 million funding;
  • whilst the CCS Flagships program had received $217 million of its allocated $2 billion.

LETFF’s Low Emissions Technology Demonstration Fund has provided six energy projects with $410 million, five of which were fossil fuel projects (representing 82% of funding). The Australian government also earmarked $70 million for the LETFF’s Coal Mining Abatement Technology Support Package, to support the coal mining industry.

State capital injections

The Queensland and Western Australian state governments regularly dole out capital injections to state-owned electricity companies. In 2014, these injections totalled more than $600 million.

The companies include Horizon Power, Verge Energy (Synergy Generation), CS Energy Limited and Stanwell Corporation Limited. Together they produced a total of 37,000 GWh in 2014, most of which came from burning fossil fuels.

Several states also offer capital injections to support port infrastructure developments that enable further coal exports. The worst offender, Queensland, spent over AUD$2.2 billion of public money between 2013-14 on rail and port infrastructure, much of which supports fossil fuels, particularly coal exportation. Works on the RG Tanna Coal Terminal at Gladstone port alone cost the Queensland government $135 million over those two years.*

*The information and figures quoted in this section are guided by the country report on Australia in Empty promises: G20 subsidies to oil, gas and coal production, a joint report by Oil Change International and the Overseas Development Institute.