How much revenue will SA get from Equinor’s drilling for oil in the Bight?
How much would SA gain, financially, if we allowed Equinor to drill for oil? Research has crunched the numbers, showing we wouldn’t get the better end of the deal.
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South Australia would be short-changed if oil is extracted from the Great Australian Bight, a report claims.
While the Federal Government is forecast to reap $7.4 billion in company and petroleum taxes over 40 years in a “base” case scenario, there is no guarantee the money would be spent in SA.
And according to research by thinktank The Australia Institute, the State Government would claim just $300 million in payroll tax – about $7 million a year.
That pales in comparison with the gain for the Norwegian Government, which owns a two-thirds share in Equinor, the company that wants to drill in The Bight. Norway would bag $8.1 billion, or 27 times the benefit to SA.
The Australia Institute says the figures are based on modelling done by the oil and gas lobby.
The thinktank’s SA director Noah Schultz-Byard said it was a dud deal.
“South Australians are being asked to put some of their most important environmental and economic assets at risk,” he said.
The research says even the billions the Federal Government would reap would take decades to appear, as Equinor would not pay company tax until 2033, and petroleum taxes until the 2040s.
A State Government spokesman said royalties from offshore drilling were determined by the Federal Government. But there would be “substantial economic opportunities” for SA communities should it proceed.
Australian Petroleum Production and Exploration Association director Matt Doman said in a “high” case scenario, the state and federal gain would be a combined $41.4 billion over 40 years.
Equinor’s Australian manager Jone Stangeland said SA could expect new jobs and “rich opportunities for local suppliers”, as well as taxes, if oil was found.
The study comes as the national regulator prepares to decide on Thursday whether to approve Equinor’s drilling proposal. Greenpeace and Doctors for the Environment Australia have criticised the company’s plan for oil spill management that relies on a banned dispersant called Corexit 9500, widely used in the Deepwater Horizon disaster in the Gulf of Mexico.
But Mr Stangeland said that chemical would be used only if there were “shortfalls in the supply chain” of accepted dispersants.
The use of dispersants is set out in the oil pollution emergency plan Equinor has submitted to the regulator for assessment and acceptance before drilling can commence.