Recent analysis has ignited concerns over Australia’s management of its natural gas resources.

Experts say multinational corporations have been given access to vast gas reserves with minimal financial returns to the Australian community, and are calling for an inquiry to find out more. 

According to the Australian Government’s Future Gas Strategy, gas is deemed “critical” to the nation’s economy. 

Yet, the reality of how gas resources are managed starkly contrasts with public expectations. 

A Western Australian Government fact sheet on petroleum resources claims that “petroleum resources are owned by the community and a royalty is a purchase price for the resource.” 

This implies that the community should receive a fair return for the extraction of these non-renewable resources. However, evidence suggests that this is far from the case.

Currently, ten facilities in Australia export gas in the form of liquefied natural gas (LNG). 

Six of these - two in the Northern Territory (NT) and four in Western Australia - pay no royalties at all. These facilities account for 56 per cent of Australia’s gas export capacity. 

Consequently, more than half of the gas exported from Australia, including all gas from the NT, is provided to companies free of charge.

The financial implications of this arrangement are significant. 

In the past four years, the total value of LNG exports across Australia is estimated at $265 billion, with $37 billion coming from the NT alone. 

Of this, a staggering $149 billion worth of gas was exported royalty-free. 

This means that Australian taxpayers have seen no financial benefit from the export of gas that generated billions of dollars in revenue for multinational corporations.

The issue extends beyond just royalties. 

According to the Australian Taxation Office (ATO), the oil and gas industry is a “systemic non-payer” of tax. 

For instance, in the 2020-21 financial year, major corporations like Woodside, Exxon, Shell, Chevron, Inpex, and APLNG collectively reported $34 billion in income, yet paid no tax. 

Even with record revenues of $56.3 billion in 2021-22, these companies contributed a mere $454 million in company tax. 

When compared internationally, the disparity becomes even more apparent. 

Qatar, which produces 50 per cent more oil and gas than Australia, receives six times more government revenue from its resources. 

Similarly, Norway, which exports more oil but less gas than Australia, anticipates a tax revenue of $127 billion from its oil and gas sector in 2023 alone.

Experts say the billions of dollars in potential revenue that Australia forgoes each year could have been directed towards a sovereign wealth fund, akin to Norway’s, or used to fund essential public services like schools, hospitals, and renewable energy projects. 

Instead, these funds have been lost due to what many are calling the country’s “great gas giveaway.”

The Australia Institute, a progressive think tank, is calling for a comprehensive inquiry into the management of Australia’s gas resources. 

The institute recommends (PDF) not only an investigation but also the application of a royalty to all gas produced in Australia to ensure that the community receives a fair return on its natural resources.