Government Investigation of Oil Companies: Uncovering Potential Misuse of Public Funds
- Oil and gas corporations might have utilized taxpayer-funded resources for fracking through a research and development initiative.
- The guidelines of the program explicitly prohibit the use of funds for mineral prospecting, exploration, or drilling.
- Following recent developments, the responsible department has pledged to conduct a thorough investigation into the matter.
The federal government has announced a probe into the allocation of millions of dollars in public funds to oil and gas enterprises under a scheme that specifically excludes support for fossil fuel exploration.
Empire Energy, an oil and gas company, has been a recipient of $28.8 million in funding over the last three years via the Australian government’s Research and Development Tax Incentive Scheme.
Currently, Empire Energy is engaged in gas exploration activities in the Beetaloo Basin of the Northern Territory, with plans for future fracking operations.
During a Senate estimates hearing in Canberra, government officials faced inquiries regarding the legality of the financial assistance provided to Empire through the program.
Senator Penny Allman-Payne of the Queensland Greens highlighted discrepancies in Empire’s financial disclosures, indicating that the company accessed the scheme for gas drilling and fracking activities in the Beetaloo Basin, despite gas exploration being explicitly excluded from the Research and Development tax incentive scheme.
The Beetaloo Basin is anticipated to become a central point for gas production in Australia, as reported by ABC News. According to officials from the Department of Industry, Science, and Resources, the legislation governing the scheme specifies that certain activities, including prospecting, cannot be classified as core research and development activities.
Understanding the Regulations of the Research and Development Tax Incentive Program
The guidelines of the scheme specify that funds cannot be allocated for “prospecting, exploring, or drilling for minerals or petroleum” for the purpose of achieving one or more of the following objectives:
- Discovering mineral deposits
- Determining the precise location of deposits
- Assessing the size or quality of deposits
The guidelines of the Research and Development Scheme explicitly state that funds provided under the program cannot be utilized to support “prospecting, exploring, or drilling for minerals.” This excludes activities aimed at identifying the location of gas deposits or evaluating the size and quality of deposits.
Recently, Empire disclosed to the ASX that it received a $15.6 million grant under the scheme in addition to $7.8 million in 2022 and $5.3 million in 2021.
Empire’s CEO, Alex Underwood, clarified that the company’s activities do not involve exploration to discover gas but rather focus on conducting research and development initiatives to acquire new knowledge for efficient gas extraction.
If the outcomes of Empire’s research and development efforts prove successful, it is anticipated to bring significant energy and economic advantages to residents of the Northern Territory, as well as to households and businesses across Australia reliant on sustainable gas supply.
Empire came under scrutiny previously for various grants during a Senate inquiry into the Beetaloo Basin, particularly after its subsidiary, Imperial Oil and Gas, was granted $21 million by the Australian government.
Government investigation oil companies
Empire Energy aims to commence fracking operations in the Beetaloo Basin down the line. The company provided this information.
Authorities to Investigate Oil Companies
In the midst of a senate hearing, Nick Purtell, the department official overseeing the scheme, expressed his intention to thoroughly examine Empire’s utilization of the funds following inquiries from Senator Allman-Payne regarding the validity and legality of the subsidies.
However, he cautioned that clarifying the outcomes might pose a challenge due to legislative restrictions preventing the department from discussing individual applications, even with the minister’s office.
Purtell emphasized that all applications, averaging around 12,000 annually, undergo scrutiny by either the ATO or the Department of Industry as a fundamental practice to ascertain their eligibility.
Additionally, the federal government pledged to probe oil and gas entities Blue Energy and Galilee Energy concerning their utilization of the funds.
Senator Allman-Payne highlighted that Blue Energy, engaged in gas exploration in Queensland, disclosed in January that it had received $7.05 million through the scheme.
In a recent Senate estimates session, government officials faced scrutiny regarding subsidies, as reported by ABC News. Penny Allman-Payne raised concerns about the validity of the subsidies granted to oil and gas companies under the scheme. She highlighted that Blue Energy had described the program as offering substantial funding for gas exploration projects, which she deemed questionable. Senator Allman-Payne emphasized the need for transparency, stating that basic information should not require probing bureaucrats during estimates.
Following the session, Senator Allman-Payne called on the Labor party to explain why companies like Empire have received significant public funding. She questioned the support for fracking in the Beetaloo region amidst the acknowledged climate crisis. The senator urged for accountability and justification for the allocation of public funds to these projects.
ABC News sought comments from Blue Energy regarding the subsidies but has not received a response yet. Additionally, Federal Minister for Industry and Science, Ed Husic, declined to provide a statement when approached by ABC. Federal Minister for Northern Australia, Madeleine King, cited confidentiality and secrecy provisions under relevant acts to protect the details of individual claims made under the scheme.
In conclusion, the government investigation into subsidies for oil companies during Senate estimates has sparked debates on transparency and accountability in public funding allocation. For more information, please visit our site 60time.com, and don’t forget to follow us on social media at [email protected].
