Media Releases - 29 June 2021
Wilderness Society welcomes the $0.48 per barrel decommissioning levy and calls to make it permanent
The Commonwealth Government has released the details of the sorely needed Laminaria-corallina Oilfields Decommissioning (Northern Endeavour) Levy for consultation. It includes a $0.48 per barrel of oil equivalent, as measured at the well head and it applies to all offshore petroleum licence holders. The levy is not deductible from any Commonwealth royalty, PRRT or taxation regime and is in operation from this Thursday.
Jess Lerch, the National Corporate Campaigner for the Wilderness Society said, “This levy is a good thing and is welcomed but it needs to be made permanent. We know the oil and gas industry still wants to keep its business model of selling off late-life assets and the risk of the taxpayer picking up the tab for more Northern Endeavours isn’t going away.
“The Northern Endeavour won’t be a one-off. With the release of the IEA report saying it’s time to end fossil fuel exploration now and phase out its use rapidly, combined with the poorly funded decommissioning liabilities and failures in standard maintenance, there's a string of ticking time bombs that will cost tens of billions of dollars to the taxpayer if these companies fold.
“This is a global phenomenon. There are decommissioning liability transfers to taxpayers happening in every oil and gas producing country and the Australian Government needs to quickly realise that the faster they get the decommissioning done, the less likely our ageing oil and gas fields will be the ones left rusting into the ocean when these oil majors fail,” she concluded.
Wilderness Society Manager of Policy and Strategy, Tim Beshara added, “This is one issue that Keith Pitt has been good on. He could have rolled over to industry so easily on this but to be honest this is one issue that the industry have brought upon themselves.
“Last year we called for Woodside to simply stump up for the clean up cost themselves as their divestment of these liabilities to a minnow was a total failure of due diligence. It would have been the right thing for them to do.
“But Keith Pitt undertaking a collective punishment approach is also a totally reasonable response in the circumstances where Woodside were simply the first to get busted for an industry-wide practice. So we don’t have any qualms about them sharing the pain.
“Usually we would be pleased with the demotion of the Resources Minister from Cabinet and would agree that it reflects the likely decline of the sector’s role in Australia’s economy. But Keith Pitt has serious policy to work managing the end of the fossil fuel industry and it’s hard to see how you can guide such a process as a junior minister sitting outside Cabinet,” he concluded.
For further comment contact Tim Beshara on 0437 878786