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Fossil Cry. Give us hand-outs or you might get black-outs, says EnergyAustralia

by Michael West | Dec 16, 2023 | Energy & Environment, Latest Posts

Whether to rub one’s eyes in utter disbelief or revere the sheer impudence of it? Australia’s fossil fuel juggernauts are calling on the government to give them more subsidies to keep their old coal clunkers going. Tax-scamming foreign gas players have their paws out too. Michael West reports.

One of the nation’s most eminent tax dodgers, the foreign-controlled EnergyAustralia, has planted a story in the AFR demanding “government-backed strategic reserves of coal power”. 

Once again last year, and despite high coal and gas prices, and soaring energy bills, EnergyAustralia managed to pay zero corporate income tax despite raking in $7.7b in total income from its vast energy operations.

They are not alone. Fossil fuel producers dominate the annual MWM Top 40 Tax Dodgers chart, with quite a few paying naught on their billions in income over 9 years of data (check it out below).

Top 40 Tax Dodgers of 2023

The black-out blackmail came hard on the heels of what RenewEconomy described as “AEMO’s jaw-dropping prediction for coal power – all but gone from the grid in ten years”. 

So it was only natural that the fossil fuel lobby would bolt into action with fresh demands for public subsidies. NSW Premier Chris Minns is already putting taxpayers on the hook to keep Australia’s biggest coal-fired power plant, Eraring, shuddering along.

And here it was from the tax haven operator controlled by a Hong Kong billionaire resident in London:

“EnergyAustralia boss Mark Collette has called for states to set up government-backed strategic reserves of coal power,” said the AFR story; reserves “that could be used to avoid blackouts as the build-out of firmed renewables lags behind the accelerating exit of coal plants.

“The investment is made more urgent by AEMO’s forecast that coal power will exit the National Electricity Market much faster than is being assumed, with all coal plants likely to close by 2038, five years sooner than it estimated last year.”

The old ‘keeping the lights on’

“The comments come as the NSW government started on Friday to consult on a so-called “orderly exit management framework” to support the exit of coal power plants from the system, which would involve government-backed extensions of plants if required to keep the lights on,” wrote the AFR.

Good old “industry sources” chimed in with their corporate welfare cry, “back-up is clearly needed”.

The peak lobby group for the likes of Origin, AGL, Shell and a bunch of gas and electricity groups chimed in too. Sarah McNamara, head of the Australian Energy Council, said, “The ISP (AEMO’s Integrated System Plan) had highlighted the important role of gas to help manage peak demand and cover prolonged “droughts” in wind and solar generation.

Not to be outdone in chiming in, the lobby group which represents notable tax dodger Jemena – 60% owned by State Grid Corporation of China and 40% by Singapore Power – chimed:

“Australia has about 11 gigawatts of installed gas power capacity, but with 8 gigawatts set to be retired, about 13 gigawatts of new plants will be needed, calculated the Australian Pipelines and Gas Association, which represents APA Group, Jemena and others.”

When ‘the wind doesn’t blow’

Amid the usual ‘when the wind don’t blow and the sun don’t shine’ rhetoric from the fossil-heavy lobby groups was the age-old, it’s a “wake-up call for governments”.

Also chiming in, “Opposition energy spokesman Ted O’Brien said AEMO’s report showed the country’s energy market was “on the verge of collapse”.

You would think multinational corporations which could not make a profit in 9 years would be on the verge of collapse, too. But of course, they generally don’t make a profit in Australia because then they would be required to pay tax on it. So it is that gas giants Exxon, Santos, BG (Shell), and coal producers Yancoal and Peabody – and these are just the biggest culprits – make their profits elsewhere where the tax rates are lower. 

In years past, EnergyAustralia was near the top of our Top 40 chart. Back then, despite their name, they were owned by a company in the notorious tax haven British Virgin Islands, in turn controlled in Hong Kong. How do they do it? By raking out big wads of interest payments on massive loans from their offshore entities to their Australian entities. Same deal for many of the others.

Last year they, produced total income of $7.7B, accounting for expenses of $9.2B to record a loss in their Australian operations. 

The wind of PR and government lobbying is blowing hard. We can look forward to incessant demands for subsidies as fossil fuels wind down in Australia – and then a humongous remediation bill for the holes in the ground. Yes, there may be a need for public subsidies to sustain the grid transition, but the gale-force winds of fossil fuel demands will require a truly independent, robust inquiry to sift through all the nonsense and the wails of faux desperation and talk of black-outs.

Giles Parkinson in Renew Economy is worth following for a more balanced view of energy policy.

AEMO’s jaw dropping prediction for coal power – all but gone from the grid in a decade

 

Michael West headshot

Michael West established Michael West Media in 2016 to focus on journalism of high public interest, particularly the rising power of corporations over democracy. West was formerly a journalist and editor with Fairfax newspapers, a columnist for News Corp and even, once, a stockbroker.

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