Giant offshore gas fields have been found to contribute less than 1% of Western Australia’s finances and employ less than 1% of the state’s workforce, according to a report by the Australian Institute.

Published today, January 17, 2021, the Authors of the report decried the state’s liquefied natural gas (LNG) sector for its minimal contributions to the state budget- with 2021 seeing only $310 million (AU$430 million) of its $19.5 billion (AU$27 billion) revenue directed to the government in royalties- as well as its high emissions and low employment rates.

According to the report, gas operations on the North West Shelf made up the vast majority of LNG royalties, while Woodside’s Pluto, Chevron’s Wheatstone and Shell’s Prelude reportedly paid no tax or royalties despite making up two-thirds of LNG production in the state.

LNG Industry shed 10% of Workforce

In Western Australia, only a few people, less than 1% of the state’s workforce are employed in the LNG sector. The gas industry shed over 10 per cent of its workforce in Australia from May 2020 to February 2021, highlighting the volatility and poor job creation potential of the industry.

In fact, oil and gas extraction is the least job intensive industry in Australia, with every other industry creating more jobs per million dollars of sales income.

One of the highlights of the report is that “the Australian and West Australian governments continue to subsidise these companies. Taxpayers have long underwritten the development of the LNG industry”.

Mark Ogge, principal adviser at the Australia Institute’s climate and energy program said:

“Oil and gas companies like Woodside and Chevron are being given this valuable and finite resource virtually for free, making huge profits from its sale, creating few jobs and returning almost nothing to everyday West Australians.”

“Ordinary people paying their car registration fees are contributing more to the WA budget than royalties from oil and gas companies; there’s no doubt West Australians are getting ripped off.”
MArk Ogge, Principal Adviser

LNG Majors Rebut Claims

According to state climate action group, Clean State, LNG projects are Western Australia’s largest and fastest growing source of carbon pollution, with current and proposed LNG projects predicted to add 41.6 million tonnes of carbon dioxide equivalent a year, a 61% increase on West Africa’s 2005 emissions total.

The gas majors under scrutiny have come out to stage a rebuttal, stating their economic contributions to the state, with Chevron spokesperson indicating in an interview that it paid about $5 billion (AU$7 billion) in Australian state, federal taxes and royalties since 2009, adding that their contribution goes “far beyond tax”.

According to the government, Australia is the largest LNG exporter in the world, accounting for 21.8% of global LNG exports in 2020, with WA making up 57% of this figure.

“The LNG industry portrays itself as essential to Western Australia’s economy, a sentiment echoed by the Western Australian Government.”
Report

However, LNG industry contributes just 1% of the West Australia state budget and two thirds of Western Australia’s gas is effectively given away by the Western Australian and Australian Governments with almost no royalties or tax being paid.