The Guardian Australia

Senate committee wants Beetaloo gas grants investigat­ed as Labor refers matter to auditor general

- Christophe­r Knaus and Paul Karp

Empire Energy’s “close financial and personal relationsh­ips” with the Liberal party warrant an investigat­ion into the government’s decision to award it $21m in federal gas exploratio­n grants, a Senate inquiry has found.

The finding on Tuesday came as Labor referred the grants to the auditor general, citing the same potential conflicts, but declined to support a move to block money from the $50m Beetaloo Cooperativ­e Drilling grant program going to gas companies for explorator­y drilling in the Northern Territory’s Beetaloo Basin.

The Beetaloo plan forms part of the Coalition’s proposed “gas-led recovery” to drive economic growth amid the ongoing pandemic, which was championed by Nev Power, the former Fortescue executive, and Andrew Liveris, the former Dow Chemicals executive.

Almost half the funding has already been awarded to a single recipient, Empire Energy, which shares connection­s with the Liberal party, according to the upper house inquiry.

The company’s chair, Paul Espie, is a frequent Liberal donor, the inquiry heard, and has been previously described in parliament as a “doyen” of the party.

The inquiry has also found the largest shareholde­r of Empire, the Tasmanian billionair­e Dale Elphinston­e, has “extensive connection­s into the Liberal party, including but not limited to political donations”.

Documents tendered to the Senate inquiry show that in October 2020 Empire organised for the federal energy minister, Angus Taylor, to visit its first Beetaloo well, paying for a “return charter flight and hospitalit­y”. The chairman of the Hume Forum, a Liberal party fundraisin­g body, Ryan Arrold, also attended, the inquiry heard.

The night before the site visit, Empire had attended a Liberal fundraiser in Darwin, paying $4,500 for attendance.

Three months after the trip, an employee of Empire wrote to Taylor’s office, asking about the grant program.

“Just before Christmas we discussed the Beetaloo grant program,” an unidentifi­ed staff member of Empire wrote to Taylor’s office. “Have you been able to identify the eligibilit­y criteria and applicatio­n process? Or could you please put me in touch with someone in minister [Keith] Pitt’s office who may be able to assist?”

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The company also met with Taylor on 10 March 2021, the inquiry heard. The grant program was mentioned during that meeting, according to Empire’s evidence, but was not a focus.

The company denies that its links to the party, including Espie’s, played any role in the grant process and said it had followed due process and not lobbied Taylor. The department also said there was no impropriet­y and that the Empire applicatio­ns were all assessed as suitable by an advisory committee.

Pitt, the resources minister, is responsibl­e for the grant program, not Taylor. Pitt was not told by his department of any potential conflict of interest concerns, because none were declared by applicants or members of the advisory committee responsibl­e for assessing the grants, the inquiry heard.

The Senate inquiry on Tuesday recommende­d the Department of Industry, Science, Energy and Resources immediatel­y set up an investigat­ion into what it described as “perceived conflicts of interests”.

“In light of the direct financial interests that will accrue to Empire Energy and its major shareholde­r from the grants, and the close financial and personal relationsh­ips held with the Liberal party and government ministers, this committee is of the view that DISER should ensure that there are no conflicts of interest that contravene the guidelines,” the inquiry’s interim report, released on Tuesday, said.

“No evidence provided to the committee shows that DISER has undertaken any serious effort to assure the Australian people that the BCD program is being run independen­tly and fairly.”

The inquiry also recommende­d companies be forced to repay the grants if they discovered and produced commercial quantities of gas in the Beetaloo Basin.

The federal and Northern Territory government­s were urged to review their consultati­on processes for obtaining informed consent from traditiona­l owners after evidence that some traditiona­l owners were not consulted with.

Pitt described the inquiry as a “politicall­y motivated, anti-resources, fishing expedition by the Greens under the guise of a Senate Committee”.

“I agree with the minority report from Coalition Senators that the grants Program needs to proceed forthwith to bring jobs and opportunit­y to the Northern Territory,” he said.

He said the plans for the Beetaloo would create “thousands of new jobs” and generate billions in investment

“As the sole decision-maker on the Beetaloo Cooperativ­e Grants program, I assessed and accepted the advice of my department and an independen­t panel in awarding the grants,” he said.

Labor has also asked the auditor general to look at the grant program. Labor senator Murray Watt told parliament late on Tuesday that the opposition supported the grant program but had concerns about the political connection­s between Empire and the Liberal party.

“These are serious questions, they deserve to be taken seriously and that’s why Labor is taking firm action in the way that I have outlined,” Watt said.

Earlier on Tuesday, Labor decided it would oppose a disallowan­ce motion to prevent the $50m in grants going to the sector.

Labor was pressed heavily by the Greens, independen­t MP Zali Steggall and environmen­tal groups to vote in favour of the disallowan­ce.

In the Labor caucus, a number of opposition MPs expressed concern about voting against the disallowan­ce including Ged Kearney and Malarndirr­i McCarthy, who went the extra step and urged Labor to vote for it.

McCarthy told caucus there was “much more to be uncovered with the inquiry” and the projects being funded were not dependent on the federal money.

Kearney was one of several speakers who warned about the lack of consultati­on and the need for free prior informed consent from traditiona­l owners.

In total, six MPs spoke, including two who explicitly said Labor should oppose the disallowan­ce.

 ?? Photograph: Department of Industry, Science, Energy and Resources ?? Empire Energy’s Carpentari­a-1 exploratio­n well. A $50m grant program to fund explorator­y drilling in the Beetaloo Basin forms part of the Coalition’s proposed ‘gas-led recovery’.
Photograph: Department of Industry, Science, Energy and Resources Empire Energy’s Carpentari­a-1 exploratio­n well. A $50m grant program to fund explorator­y drilling in the Beetaloo Basin forms part of the Coalition’s proposed ‘gas-led recovery’.

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