Direct contributions and handouts to the fossil fuel industry

Several major handouts to the fossil fuel industry were announced in 2020, with several going to the climate-wrecking gas industry as part of the Federal Government’s heavily criticised “gas-fired recovery” from the COVID-19 pandemic:

  • In January 2020, the Prime Minister Scott Morrison announced $960 million in federal funding aimed at massively boosting gas supply.
  • In September 2020, $52.9 million was announced for boosting gas supply and transportation, with $28.3 million committed to five ‘strategic gas basins’.
  • The October 2020 budget saw the Government pledge “$203.7 million to support the construction of new diesel fuel storage”.
  • By Jan 2021, more than $200 million was pledged to support exploration of the Northern Territory’s Beetaloo Basin.

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

Geoscience Australia is a government body that engages in fossil fuel exploration as one of its major operations. One of Geoscience Australia’s major projects named ‘Exploring for the Future’, launched in 2016, attracts $31 million each year in subsidies. The program involves 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 2021, the Government’s UNGI webpage states that 12 projects have been shortlisted, including 5 gas projects and 1 coal upgrade project.

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) considering it for audit in FY2021.

Department of Industry, Science, Energy and Resources

The Australian Government’s Department of Industry, Science, Energy and Resources 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 Carbon Capture and Storage (CCS) Flagships program had received $217 million of its allocated $2 billion.

Meanwhile:

  • 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 earmarked $70 million for the LETFF’s Coal Mining Abatement Technology Support Package, to support the coal mining industry.
  • A further $50 million was earmarked for the LETFF’s ‘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”.

 

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 State Government also announced $50 million for the coal-to-hydrogen project described above.
  • The NSW State Government pledged $1.01 billion in direct funding for programs that would massively boost gas supply.

Meanwhile, the Queensland and Western Australian state governments regularly dole out capital injections to state-owned electricity companies. According to an Oil Change International report, these injections totalled more than $600 million in 2014.

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.

TAKE ACTION

Tell Treasurer Josh Frydenberg: End polluter handouts!


See also:

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: