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RUBY:

From Schwartz Media I’m Ruby Jones, this is 7am.

As scientists, and the United Nations, continue to warn about the likely impacts of climate change, the federal government is spending big to help prop up the gas industry.

One company in particular has been the sole beneficiary of a government fund established to help drill for gas in the Northern Territory.

That company, which has links to the Liberal Party, has been quietly lobbying for federal support for months.

Today, national correspondent for The Saturday Paper Mike Seccombe on the question marks around another government grant process, and why Australia continues to subsidise fossil fuels.

It’s Thursday August 26.

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RUBY:

Mike, last year, the federal government announced the creation of a Covid-19 Recovery Commission. Can you remind me about that? What was its purpose and what were they recommending that we do to get out of the crisis?

MIKE:

Well, the group was set up in March 2020, and its purpose was to chart a course of economic development post pandemic. And to be frank, it didn't really achieve much. And in May this year, Scott Morrison congratulated the commission for all its work and announced that the country had moved past the emergency phase.

Archival tape -- Scott Morrison:

“The Australian economy's recovery is, is strong and stronger than almost anywhere else in the world. But it is not immune.”

MIKE:

And added we were on the path to recovery.

Archival tape -- Scott Morrison:

“Our plan for Australia’s recovery from the COVID-19 pandemic is fuelled by keeping taxes low.”

MIKE:

So it sort of came and went without achieving much, except, as I reported, at the time the commission was stacked with a lot of figures involved in the fossil fuel industry. And its one big recommendation was basing Australia's economic recovery on gas mining. This became the so-called gas led recovery.

Archival tape -- Scott Morrison:

“By resetting our East Coast gas market, unlocking additional gas to drive recovery, paving the way ultimately for a world leading Australian gas hub to support high wage jobs.”

MIKE:

And even though the country is most definitely not out of the emergency phase of Covid yet, as you can see from the ongoing lockdowns in the case numbers, the government is proceeding apace with the gas led recovery.

RUBY:

Right. So how is the federal government moving then to support the gas industry right now, what's underway?

MIKE:

Well, in December last year, the federal government announced there would be a publicly funded, taxpayer funded $50 million Beetaloo Co-operative Drilling Programme to help accelerate development of gas projects in the Northern Territory.

Archival tape -- Unknown Person 1:

“Let's get the applications in, $50 million to support companies doing exploration in the Beetaloo…”

MIKE:

The Beetaloo is a big basin in the Northern Territory, around 500 kilometres south east of Darwin, and it's rich in natural gas.

Archival tape -- Unknown Person 2:

“The Beetaloo Basin, once that resource is firmed up, is expected to be one of the best basins in the world for gas and condensate…”

MIKE:

Which is mined via fracking, which is a controversial drilling process that people have complained often has poor effects on groundwater and also leaks methane, which, of course, is a very powerful greenhouse gas.

Anyway, despite objections from the local community, the traditional owners, environment groups, the federal government has been intent on mining the Beetaloo and they're putting their money where their mouth is.

Archival tape -- Unknown Person 3:

“Well, it's great to be here in the Northern Territory, in the Beetaloo Basin. With Empire Energy looking at their new gas developments.”

MIKE:

And on July 7 this year, Angus Taylor, the Minister for Energy and Emissions Reduction and the driving force behind the Morrison government's gas led recovery, announced the first three and so far only exploration grants in the Beetaloo under the programme. And they totalled $21 million.

Archival tape -- Unknown Person 3:

“If we want affordable, reliable energy as we bring down our emissions in this country, we need more gas. We need to unlock the gas supply in this country.”

MIKE:

They were awarded to a company called Imperial Oil and Gas, which is a subsidiary of Empire Energy, a company with links to the Liberal Party and with a history of lobbying federal ministers. And in the months before that announcement, that company Empire actually went on a trip to the region with senior government officials, including Angus Taylor, in tow.

RUBY:

Right. Can you tell me more about that trip, Mike? What do we know about what happened?

MIKE:

Well, it occurred over two days in October last year, so that's about two months before the grants programme was announced. On the first day, October 15, there was a fundraising dinner up there for the Liberal Party and that was attended by representatives of Empire Energy and by Angus Taylor and by various other people associated with the government.

The next day, Empire chartered a flight to the Beetaloo Basin to show it to a number of high profile figures, Angus Taylor was on the flight, as was Empire's chairman and their CEO and a number of other representatives from the company, as well as a couple of Liberal Party politicians from the Northern Territory.

But the two most interesting names on the passenger list, I reckon, were Ryan Arnold and Nick Cater.

RUBY:

Right. So who are Ryan Arnold and Nick Cater, Mike? And why did they stand out to you?

MIKE:

Well, Ryan Arnold and Nick Cater, for a start, would appear to have nothing whatsoever to do with the gas project.

Ryan Arnold is the chairman of the Hume Forum, Hume being Angus Taylor's seat in parliament. And the Hume forum is a fundraising body associated with Angus Taylor. So what it does is basically collects money on his behalf.

Nick Cater is a former editor of The Weekend Australian and is currently executive director of the Liberal Party aligned policy advice vehicle, the Menzies Research Centre.

And this link is interesting because the chairman of Empire also is involved with the Menzies Research Centre. He's been on its board for a decade and he's been its chairman since 2019.

He and his company also have been very generous political donors, having given hundreds of thousands of dollars, I think around $400,000 in total over recent years to the Liberal Party and smaller sums to Labor. And a couple of years ago, he was lauded in parliament by a Liberal politician as, quote, one of the doyens of the Liberal Party and titans of business.

So as you can see, they're very, very close links between this particular mining company or the personnel running it and the Liberal Party.

RUBY:

Hmm, OK, so what we have is a mining company attending Liberal Party fundraisers and flying senior Liberal Party figures to a proposed mining site in the Northern Territory. And it's just a couple of months after that happens that a grants programme is announced for that site, a programme that so far only this company has been a beneficiary of. Has any of this raised alarm bells, Mike?

MIKE:

You betcha.

And while there's no suggestion that any of these business people has acted illegally or improperly within the rules, there's certainly a great deal to criticise about the government process around the setting up of the grants programme and its administration.

And that's why a Senate committee has been examining the issue. And now having heard the evidence, some of the politicians are pushing to scrap the entire grants programme, which, of course, would mean that Empire wouldn't get its money.

RUBY:

We'll be back after this.

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RUBY:

Mike, a Senate committee is examining the grants process that was used to hand millions of dollars to Empire, which is this company that, as you've been saying, has links to the Liberal Party and is trying to mine the Beetaloo Basin. So can you tell me a bit more about this committee and the type of evidence that it's been hearing?

MIKE:

Well, it's chaired by the Greens Senator Sarah Hanson-Young.

Archival tape -- Sarah Hanson-Young:

“Well, this report is a very important one because it talks directly to and has gathered information and evidence in relation to not just the Beetaloo basin.”

MIKE:

And they've heard a number of interesting things.

Archival tape -- Sarah Hanson-Young:

“This interim report went directly to the government's plans to give millions, tens of millions of public dollars over to gas companies to start fracking in the Northern Territory.”

MIKE:

It took evidence from Empire Energy that a week before the grants scheme was even announced, the company had discussions with Angus Taylor without departmental staff present about the shape of the scheme.

Archival tape -- Sarah Hanson-Young:

“The relationships between this company, Empire Energy and the Liberal Party are so thick. You could you just you couldn't you couldn't count the number of ways on one hand. In March this year, the company met with Mr Taylor privately in his ministerial office. No department officials were there…”

MIKE:

Government bureaucrats have said that the scheme operated on a quote, first in best served basis. So this means that Empire essentially got the jump on other potential applicants.

Archival tape -- Sarah Hanson-Young:

“No due diligence was done. The criteria wasn't even met.”

MIKE:

It also heard that Empire provided advice to Taylor about the regulatory regime for gas fracking in the Beetaloo. And further evidence suggests that there were significant concerns about Empire's eligibility for the grant programme.

Archival tape -- Sarah Hanson-Young:

“What we have uncovered is that this company had the inside track. They were mates of the Liberal Party, mates of even the minister, of course, Mr Angus Taylor, members of the Liberal Party, lifetime members of the Liberal Party!”

MIKE:

The selection panel made up of three bureaucrats from the federal and Northern Territory governments raised concerns about it. One of the assessors deemed the application quite unsatisfactory, unquote, on two out of three assessment criteria.

Archival tape -- NAME:

“What I'm worried about is even the process, even the process of handing out this money has been dodgy from woe to go.”

MIKE:

On Wednesday the Greens moved a disallowance motion in the Senate, which would have scrapped the whole $50 million cooperative drilling program, including of course, the money allocated to Empire.

But that motion was defeated with Labor siding with the government to vote it down.

RUBY:

Mm so what drove Labor’s decision here Mike?

MIKE:

Well the party is divided between those on the left who have been pushing for greater action on climate change and those on the right, including the party’s resources spokesperson Madeline King who are keen to support the gas industry.

And my understanding is that there was quite a debate within the Labor caucus on Tuesday about this and that debate of course, about subsidising the fossil fuel industry is part of a bigger issue here which goes well beyond the $50 million being awarded for this specific drilling project.

RUBY:

Let's talk about that larger issue, Mike, because the federal government has subsidised many fossil fuel projects, not just gas, also coal, since it's been in power. And that is obviously despite the environmental repercussions of that investment.

MIKE:

That's exactly right. In a report published earlier this year, the Australia Institute totted up all the various subsidies to coal, oil and gas, you know, for fuel tax rebates, exploration grants, etc, and found that it came to something like $10.3 billion just in the last financial year. And over five years from 2015 to 2019, another examination of the subsidies by Bloomberg New Energy Finance, they found that spending on fossil fuel subsidies had increased by 48 per cent over those five years.

And that's, of course, in stark contrast to the direction where the rest of the world is heading, or at least the rest of the developed world. Just last week, the Biden administration in the United States announced that it would use its voting power, considerable voting power on the World Bank and in other multilateral development banks to oppose almost all new fossil fuel projects around the world. Certainly oil, coal, almost all oil and new gas exploration projects.

And of course, the recent report by the United Nations Intergovernmental Panel on Climate Change underlined that message that, you know, we just had to stop exploiting more fossil fuels over time.

And yet in Australia, the government is pushing new gas drilling operations and directing millions of taxpayer dollars to mates and party donors into the bargain and subsidising fossil fuels in general.

And with the federal opposition not standing in the way of this - it's pretty clear that Australia is deciding to ignore what the rest of the world is doing, and to disregard the climate reports and recommendations, and leading us down a different and dangerous path.

RUBY:

Mike, thank you so much for your time.

MIKE:

Thank you so much for yours.

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RUBY:

Also in the news today,

New South Wales has recorded the highest daily number of Covid-19 cases in Australia so far with a record 919 new locally acquired cases on Wednesday.

The state recorded two deaths from the virus including a woman in her 30’s from Western Sydney and a man in his 80’s. The man's death is the third linked to the Greenwood Aged Care Facility outbreak in Sydney's north-west.

And in Tokyo, the Paralympics have gotten underway with Australian cyclist Paige Greco demolishing her own world record by more than seven seconds in the velodrome on day one of the games.

I’m Ruby Jones, this is 7am. See ya tomorrow.

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