Gas Industry Downturn Proves Government Needs to Look Elsewhere to Boost Economy
The Conservation Council of WA has warned that the State Government needs to look elsewhere to boost the economy, with signs the WA gas industry is struggling financially and failing to gain the support of communities.
Woodside Petroleum has announced its Browse Liquefied Natural Gas has been put project on hold due to falling oil and gas prices, while WA-based fracking company Buru Energy has reported a major decline in shareholder value.
“These announcements confirm that the State Government is barking up the wrong tree if it was hoping that the gas industry would save the state budget and boost the economy,” said CCWA Director Piers Verstegen.
“WA’s LNG industry is clearly struggling, while plans for onshore gas fracking are failing to gain the support of communities across the state.
“The Paris agreement on climate change requires fossil fuels to be phased out, so relying on growth in this sector will leave our economy exposed and our environment and communities worse-off.
“It would be far more prudent for the government to throw its support behind the renewable energy industry.
“This is an area where WA can have a real competitive advantage and which also enjoys the strong support of West Australians.”
Woodside’s announcement follows the release this week of Buru Energy’s annual report, which revealed its operating loss after tax has increased from $31.6m to 40.4m.
The company had been due to begin gas fracking at Yulleroo, 70 km from Broome, but has delayed the project by two years.
“There is significant and growing opposition to fracking across the state including in the Kimberley,” said Mr Verstegen.
“97% of Yarwu people, who are the traditional owners of the area Buru is targeting for fracking, have voted to oppose fracking on their land.
“This community opposition is a major factor in the delay of Buru’s fracking projects and the overall poor performance of Buru and other fracking companies.
“These delays are costing the company time and money, and will make Buru’s fracking plans even more financially risky.
“Shareholders’ equity in Buru Energy has declined by $40m over the past year.
“Investors would be well advised to look elsewhere for returns, just as the government should look elsewhere for revenue and employment growth,” he said.