Will taxpayers be hit?
Reports that two fossil fuel companies are struggling to finance the retirement of their offshore gas and oil assets should be of grave concern to Australian taxpayers.
The Energy News Bulletin is reporting that trouble at Jadestone’s Montara and Stagg oilfields off WA has forced the company to re-assess its financing and that it has commenced a redetermination process with its banks.
This is just the latest issue for Jadestone, which could collapse at any time due to problems it has had in recent years.
If Jadestone executives were to walk away from their decommissioning problems, the Australian taxpayer would be lumped with hundreds of millions of dollars in clean-up costs, and trailing liability legislation would be extremely difficult to enforce because its owners reside overseas, out of reach for Australian courts.
Meanwhile shares in Cooper Energy have suffered dramatic falls in recent days, thanks to revised costs announced for the decommissioning of its Basker, Manta and Gummy oil wells off the coast of Victoria.
According to reports, the decommissioning cost estimate has been adjusted from $198m to $280m, prompting shareholders to abandon the company en masse.
Similarly to Jadestone, if Cooper Energy fails completely, it is Australian taxpayers who will be stuck with the bill.
Friends of the Earth Offshore Fossil Gas Campaigner Jeff Waters said it was time the government stepped in to force the oil and gas industry to pay for the full decommissioning and recycling of these huge offshore assets.
“The existing offshore decommissioning levy, which is only temporary, should be increased and indefinitely extended,” Jeff Waters said.
“Then the fossil fuel industry, rather than ordinary Australians, could fund the restoration of our oceans, as well as the recycling of hundreds of thousands of tonnes of steel and other materials.”
According to industry estimates, about 60 oil and gas platforms, 10 floating oil rigs and thousands of kilometres of pipelines need to be safely removed from our oceans in coming years.
