Energy crisis: gas lobby cries wolf at gas export tax

While the Prime Minister was considering a 25 percent tax on natural gas exports, the gas cartel quickly launched a campaign against it. Rex Patrick He calls out to an industry crying “wolf”.

When Russia invaded Ukraine in 2022, oil and gas prices, which were already rising, also increased. This has led to increased profits for energy companies, which has led to calls for an unexpected tax in the UK.

After all, why should energy companies make super profits from the tragedy of war, from oil and gas that do not belong to them?

British industry body Offshore Energies UK (OEUK) warned swiftly and forcefully that the windfall tax would sharply reduce investment in the sector and put thousands of jobs at risk.

The Energy Profits Tax was quickly introduced by the then Chancellor of the Exchequer, Rishi Sunak. It was initially set at 25% and would expire at the end of 2025. In January 2023, then-Chancellor Jeremy Hunt increased the tax to 35%.

In the 2022-2023 financial year, the first year of operation, the levy raised £2.6bn (AUD$3.5bn). It raised £3.6bn (AUD$6.8bn) over the next 12 months.

This is money the UK Government can spend on its citizens who own oil and gas.

The Great Australian Gas Heist

The Australia Institute summarizes the situation very well.

“[Japanese Gas Company] NPEX exports more gas each year than New South Wales, Victoria and South Australia combined. It does not sell gas to Australians except in emergencies. It pays no royalty fees, no Petroleum Resource Rent Tax (PRRT) and no corporate tax for the $21 billion gas exports between 2015 and 2025. I guess it’s not hard to make money when Australia gives you its gas practically for free.

“In fact, you could argue that Japan is better than us at extracting value from Australia’s gas exports. Japan sells imported Australian gas for domestic use, new analysis by (IEEFA) has found. Japanese companies are reselling Australian LNG worth AUD11-14bn in 2024, with profits likely to exceed AUD$1bn, or about the same as the profit Australia collects from the Petroleum Resources Lease Tax.”

We are actually a bunch of trophies.

Inpex and Australia’s gas heist. Billions in revenue, crumbs in taxes

We need a gas export tax

On 17 March the Australian Council of Trade Unions (ACTU) publicly called for a 25 per cent tax on gas exports so that all Australians can benefit from the sale of our LNG.

Taxing Australia’s gas exports at 25% would raise $17.1 billion in the 2023-2024 financial year, and rise much more next year due to wartime price increases.

As working Australians grapple with rising costs due to the war in Iran, giant gas companies are preparing to be decimated by skyrocketing oil and gas prices.

“The government must act urgently to tax our gas exports by 25% or once again multinationals will profit while Australians miss out”, the ACTU stated in a media release.

The government later hinted that it was considering such a tax.

Gas companies open to windfall taxes as costs rise

“Wolf” cried the wolf

The gas industry, in its true and tested form, responded quickly to this news.

Australian Energy Producers Chief Executive Officer Samantha McCulloch came out screaming “wolf” on Friday.

“This would be the worst possible time to impose a new, retroactive tax on an energy sector that is important to the Australian economy and energy security.”

‘Never’ turned out to be their best time.

““Imposing higher taxes on Australian gas producers will halt investment in new gas supply, leading to gas shortages, higher energy prices and the closure of Australian industries that rely on reliable and affordable gas.”

The gas sector constantly makes statements that it will “stop investments”. They have done this several times in response to past calls for a gas reservation scheme. The problem is that the facts contradict the statement. Investments increased when Western Australia introduced its gas reservation programme.

Other countries have gas reservation policies and unexpected taxes. The gas sector continues to invest.

To be fair, there are some studies funded by the Australian Energy Producer (formally the Australian Petroleum Exploration Association) that suggest Western Australia is being punished for its sins.

“Current rising petrol and diesel prices in Australia highlight how important it is that we ensure Australia can meet its gas needs through secure domestic supply.” Miss McCulloch.

Gas shortage claims a fantasy

And of course, the gas shortage claim is nothing but a complete fantasy. there is one Australian Domestic Gas Safety Mechanism This (which I personally negotiated with the Government in 2017 while working as an advisor to Senator Xenophon) prevents gas exports from Australia in the event of a shortage in the domestic market.

There can be no gas shortage in Australia, only export gas shortage. And the thing is, Samantha McCulloch knows it. How do I know this – I discussed this with him in a powerful exchange between Senator Lambie, myself, and Ms. McCulloch in the waiting room of Senator Lambie’s Senate suite in early 2025.

But he gets paid well to say what he does.

He also stated in the Australian Energy Producers press release: “While international gas prices are rising, Australian gas prices remain relatively low and the market is well supplied. We should not take this for granted.”

Allowing Australians to access Australian gas at affordable prices. We must be very lucky; Thank you for your kindness, Miss McCulloch!

McCulloch isn’t the only one shedding crocodile tears.

Shell Australia country president Cecile Wake said energy security depended on continued investment in new supply, and any proposals for more taxes would be ignored. “It undermines investment and erodes energy security“.

“To do so would be shortsighted and opportunistic, especially when the domestic gas market is well supplied and domestic gas prices remain significantly below international prices.

“Imposing a tax on LNG exports now would send the worst possible signals for gas supply investment to the local market and to our regional trading partners who need us more than ever and supply critical fuels to Australia.”

Miss Wake uses the same tactic. Never let the truth get in the way of lobbying efforts.

Better late than never

The government should act on a 25% export tax.

The only problem with the government’s hints so far is that they will probably implement the tax through the budget. That’s over a month left until we hit super profit.

The tax should have been imposed decades ago. All the government is doing by waiting is robbing citizens of another month’s return on the gas they own and exposing themselves to a well-financed campaign by the cartel.

What is fraud, Sam? ASIC is also wondering

Rex Patrick is a former South Australian Senator and formerly a submariner in the armed forces. Known as an anti-corruption and transparency warrior, Rex is also known as “Transparency Warrior“