Australian taxpayers are set to hand back more than $500 million to American fossil fuel giant Chevron – and its partners – to help clean up oil wells near Western Australia’s Barrow Island.
In May, fossil fuel giant Chevron stopped oil production at Barrow Island, off the coast of WA, after 60 years of operation.
The stop to work meant Chevron, and its partners Exxon Mobil and Santos, would be required to clean up and decommission the site.
Over the 60 years of its runtime, there were 900 off-shore wells drilled at the site, producing around 335 million barrels of oil. It works out to about $3 a barrel.
But now it looks like these fossil fuel companies could get over half [$516m] of that $1 billion back.
The deal that explains the pay back
Under the legislation that allowed the Barrow Island project to begin back in the 1980s, both the WA and federal governments will cover 40 percent of the clean-up costs of the project for the first three years.
Independent Journalist Peter Milne, at Boiling Cold, was first to publish the story, after he obtained documents from the WA government under freedom-of-information laws.
According to a redacted WA government email released as part of the request, the state’s regulator claimed that of the estimated $2.3bn total clean-up cost, $1.29 billion will be spent in the first 3 years.
In line with the initial legislation signed in 1985, the fossil fuel companies involved in the drilling will be refunded 40 percent of decommissioning costs until 2028, capped at the total amount of royalties they paid.
This suggests the taxpayer will be subsidizing Chevron’s clean-up bill by $516 million.
Chevron and its partners are still footing the majority of the bill – around $1.7 billion of the total cost is $2.3 billion.
But they only paid a billion to extract Australia's resources in the first place.
It leaves the Australian public wondering: what else could that $500 million have been spent on?