Santos CEO Kevin Gallagher

Yesterday’s approval of the Narrabri gas project in NSW was a big win for Scott Morrison’s “gas-fired” recovery plan. It was also a big win for Santos, the company with a remarkable knack for getting what it wants.

For decades, the South Australian company has enjoyed a dream run of approvals for projects that, much like Narrabri, were waved through despite overwhelming opposition from communities, farmers, scientists and environmental groups. 

Santos doesn’t win its battles on its own — it has the backing of Australia’s most powerful political forces, allowing it to kickstart billions of dollars worth of projects even when demand for gas falls.

It now stands to be one of the biggest winners in the government’s COVID recovery plan. Yet it’s just another victory for a company that its critics say has the game rigged.

High-level support

On a corporate scale, Santos is a minnow — not even ranking in the list of the top 50 largest Australian companies. Yet according to a report by UK think tank InfluenceMap, it is the second most powerful corporation blocking climate action in Australia, after BHP. 

The company and its political supporters have put enormous pressure on the NSW Independent Planning Commission (IPC) to endorse the Narrabri project. The NSW government has backed the development fully. Federal Energy Minister Angus Taylor has strongly backed it too.

Even as the commission was deliberating on its verdict, Morrison listed it as one of 15 projects of national significance that should be accelerated under federal environment laws.

“It has had political support at the highest level,” says Mark Ogge, principal adviser to progressive think tank The Australia Institute.

Santos is used to getting its way. Since its origin as the SA-owned Northern Territory Oil Search more than 60 years ago, it has maintained strong connections to government, giving it access to powerful decision-makers.

“It has an incredible amount of support from governments, partly because it spends a lot of money on lobbying and gets access to government ministers and other government officials, but also because it tells a story that gas is needed,” Ogge says. 

One early champion was Martin Ferguson, who as federal resources and energy minister helped spruik Santos’ Gladstone project in Queensland in 2010.

Within months of retiring from politics, Ferguson joined the advisory board of the Australian Petroleum Production and Exploration Association, the lobby group representing Santos and the oil and gas industry.

As the war over coal seam gas heated up, the revolving door continued to spin. By 2015, Santos had hired two former federal ministerial advisers and a former adviser to the NSW resources minister. By 2018, according to one analysis, Santos had hired 16 former senior government staffers, more than any other fossil fuel company in Australia.

Ferguson’s former chief of staff Tracey Winters was one of them, becoming the company’s head of government and public affairs in 2017.

Network of operators 

Santos’ vast network of political operators has allowed it to tap into high-ranking decision-makers and snap into action at every crisis. 

Its political power was famously on display when it convinced the Queensland government to open the Gladstone LNG export terminal in 2010, claiming it would not affect gas prices and would not take gas from Australian consumers. 

Documents obtained by Four Corners at the time revealed an environmental approval process that was “rushed, made with insufficient information, and put commercial considerations above environmental ones”.

Whistleblower Simone Marsh claimed Santos’ application was lacking substance, with little hard data on where the wells or pipelines were going or potential environmental impacts.

“They put huge pressure on the Queensland government at the time, when the project was being approved in 2010,” Ogge says.

“That decision has cost Australian manufacturers and gas consumers billions and billions of dollars. It’s tripled gas prices in Australia.

“For every dollar that is paid for gas, there is now a dollar less for manufacturers and consumers and a dollar more for Santos.”

Guidelines scrapped

The company’s political firepower was also on display last year when it pressured the Western Australian government over new zero-carbon emission guidelines, issued by the state’s Environmental Protection Authority (EPA). 

The guidelines were scrapped just days after a high-powered meeting between oil and gas executives, including Santos CEO Kevin Gallagher and Premier Mark McGowan. McGowan rang the EPA shortly after the meeting imploring it to revisit the guidelines.

It followed weeks of mounting pressure on the EPA to scrap the guidelines, including front-page stories in The West with the environment minister calling the project a “jobs killer”.

Santos declined to comment on its political reach. It said the Narrabri process had been “comprehensive, transparent and inclusive”. But director of climate and environment at the Australasian Centre for Corporate Responsibility, Dan Gocher, said Santos was able to play the game better than most. 

“You’ve got vested interests leaning on what are supposed to be independent bodies,” he says. “It does feel a bit rigged.”

Peter Fray

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Peter Fray
Editor-in-chief of Crikey

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