Empire Energy under scrutiny for use of taxpayer grants in Beetaloo development

Empire Energy says it was awarded the taxpayer-funded grants for research and development projects necessary to frack the Beetaloo Basin.

The federal government will investigate whether millions of dollars paid to oil and gas companies for research and development in the Territory may have been misused for private prospecting.

Empire Energy, one of the principal developers in the Beetaloo Basin, reported receiving $28.8m over the past three years through the publicly-funded Research and Development Tax Incentive Scheme.

The scheme explicitly excludes fossil fuel exploration and does not allow grants to be used to subsidise prospecting, exploring or drilling to discover deposits.

In senate estimates last week, Queensland Greens Senator Penny Allman-Payne raised claims made by the Tax Justice Network and Lock the Gate that Empire Energy used grant money for drilling and gas exploration and appraisal wells in the Beetaloo.

Greens Senator Penny Allman-Payne questioned if Empire’s use of the grant money was ‘valid and legal’. Picture: NCA NewsWire / Gary Ramage

Ms Allman-Payne asked one of the senior Department of Industry, Science and Resources bureaucrats administering the scheme, Nick Purtell, if he would investigate whether this use of the research and development grant was “valid and legal”.

She also questioned grants awarded to two gas companies active in Queensland, Blue Energy and Galilee Energy.

Mr Purtell agreed to look into the cases, noting all 12,000 annual grant applicants were assessed for core research and development activities.

Empire Energy chief executive Alex Underwood dismissed the claims were “yet another example of activists doing or saying anything to oppose the development of the Territory’s natural resources”.

He said that the complex geography of the Beetaloo Basin meant innovative new approaches to drilling, stimulation and completion would be required to frack the area.

Empire Energy's Alex Underwood said it was ‘another example of activists doing or saying anything’ to oppose development.

Under the grant scheme, drilling may be an eligible research and development activity if it’s done in support of other innovations.

“That is clearly the case with our work in the Beetaloo Basin,” Mr Underwood said.

“We know Empire’s EP187 tenement in the Beetaloo Basin contains substantial gas resources. “The activity in question is not exploration to discover gas, but rather undertaking research and development activities with the purpose to generate new knowledge to determine how that gas can be extracted.”

Should the outcome be successful, he said, it would “deliver substantial energy and economic benefits to Territorians, including the local communities and Traditional Owners on whose land development takes place”.

Environmental lobby groups called for more scrutiny of public funds paid to fossil fuel companies.

Lock the Gate welcomed more scrutiny for taxpayer-funded grants.

“Australians’ hard earned money should not be used to bankroll fracking corporations like Empire Energy who want to wreck our water and climate,” national co-ordinator Carmel Flint said.

“Subsidies and handouts for coal and gas companies are costing Australian taxpayers billions every year. So too are the devastating climate disasters like fires, droughts, and floods that fossil fuel companies cause.”

The Tax Justice Network’s Mark Zirnsak said “the Australian public has a right to trust that our public money is being spent wisely and with integrity”.

“There is a history of research and development schemes being rorted, so we don’t want to see genuine innovation missing out because of unscrupulous companies,” he said.

A spokeswoman from the Department of Industry, Science and Resources said a range of measures were conducted to ensure the integrity of the grant scheme, “including education, guidance, and compliance activities”.