Senate committee wants Beetaloo gas grants investigated as Labor refers matter to auditor general
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?”
Sign up to receive an email with the top stories from Guardian Australia every morning
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.