Chief Scientist’s NOPSEMA Audit Flawed Before it Started

22 September 2019

Centre Alliance Senator Rex Patrick has declared Dr Alan Finkel’s report into the NOPSEMA ‘an accurate examination of the wrong issue’.

"I accept the Chief Scientist’s finding that NOPSEMA is a professional and competent regulator, albeit with some shortcomings in terms of transparency, but his report answers the wrong questions," said Senator Patrick. "From the beginning Dr Finkel’s inquiry was set up as a political fix to a political problem."

"The Chief Scientist’s audit was initiated during the May 2019 election campaign in response to concern from South Australian voters. Sadly the audit report does not advise of this fact, instead distracting the reader by reporting that the terms of reference were subsequently passed to the Chief Scientist by Ministers Canavan and Ley in late June 2019. That the Chief Scientist wasn’t up front about this in his report is disappointing," said Senator Patrick.

"The reality is that the Chief Scientist was tasked to look at the wrong question. Had Dr Finkel been asked to conduct a cost benefit analysis of planned drilling the Great Australian Bight, the thing most South Australians are interested in, he would have found that the project doesn’t stack up."

"We should all be asking what will Australia and South Australian’s get out of this project?"

In the 2016-17 Financial Year three of the larger oil and gas exploration and production entities operating in Australia- ExxonMobil Australia, Chevron Australia Holdings and Conoco Philips Australia Gas Holdings - had a combined turnover of $11.6 Billion.

Against that revenue these three companies paid zero corporate taxes. 

They also paid zero in Petroleum Rent Resource Tax.

Why would Equinor be any different? They are a Norwegian state-owned company charged with returning benefits to the Norwegian treasury.

In 2018 they paid in Norway the equivalent of AUD$22 billion in taxes, a further AUD$1B in environmental taxes and AUD$3B in dividends to Norway’s public coffers. It’s hardly likely Equinor will switch loyalty to Australia.

It’s hard to see South Australia will get much from the proposed development. Because the proposed well is offshore, no royalties will flow to the South Australian Government.  And there are no solid proposals on the table for local jobs.

All South Australians will be left with is the risk of a spill. With $400M - $500M in annual fisheries/aquaculture and $270M in annual tourism at stake, there is only down side for South Australians.

"This is a dumb deal for SA," Senator Patrick said, "and it must not go ahead."

Unfortunately, as the Finkel report points out at page 29, when then Environment Minister Greg Hunt signed a delegation, on 7 February 2014, NOPSEMA has been solely responsible for approving Equinor’s drilling operations.

The Minister for Environment has absolved him or herself of responsibility that the company will meet the environmental requirements of the Environmental Protection and Biodiversity Conservation Act.

"This means that the only thing that stands between Equinor’s application to proceed and the project going ahead is the non-elected head of NOPSEMA, and that’s not right," said Senator Patrick.

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