Australia Built a Gas Export Empire. Now the Backlash Is Here

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LNG exporters have been backed by powerful lobbying efforts by groups such as the Australian Energy Producers — an association that represents oil and gas producers. The AEP is among the world’s most “engaged” and “oppositional” associations, according to London-based think tank InfluenceMap, which tracks lobbying groups.

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That influence has also been reinforced through decades of high-profile civic sponsorships, particularly in Western Australia. Woodside’s bright yellow sponsorship vests for junior lifesavers have long been an iconic feature on the state’s beaches.

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To boost supply and curb rising energy costs, the government was able to push forward a scheme to reserve gas for local use — 20% of annual LNG exports — sparking strong opposition from parts of the industry and its lobbyists. Santos Chief Executive Officer Kevin Gallagher warned in May that this will drive prices down for a short period, but kill investment and supply.

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The country’s long-simmering issue over how to tax LNG exports without dissuading investment exploded into a cost-of-living debate during a Senate inquiry in June. Independent Senator David Pocock’s question to a Treasury official elicited agreement that the country’s beer drinkers paid more tax than its LNG exporters. 

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Their exchange has been viewed millions of times on social media.

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“For too long there has been an assumption in Canberra that the gas industry is politically untouchable,” Pocock, who represented Australia at rugby union and was a key instigator of the inquiry, told Bloomberg. “That assumption is beginning to change because Australians can see the gap between record gas exports, huge industry profits and what is flowing back to the public.” 

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The Senator said he was unperturbed the inquiry failed to secure support for a 25% levy on LNG export revenue. “I don’t think it’s a question of whether there will be a tax on gas exports; it’s a question of when,” he said.

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It’s now not just progressive politicians like Pocock calling for gas tax reform — far-right politician Pauline Hanson last month argued for a new royalty and Commonwealth equity model for future gas projects, saying taxpayers should get a better return. 

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The Australia Institute maintains the country’s multinational gas exporters pay “no royalties and minimal tax.” The progressive think tank alleges Japan’s Inpex Corp., which has stakes in the country’s Ichthys LNG, Prelude FLNG and Darwin LNG projects, paid no royalties or corporate tax on A$21 billion of gas exports between 2015 and 2025. 

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The gas industry strongly disputes these claims, and has warned that higher levies or reservation rules threatens supply and risks damaging Australia’s reputation with trading partners. The oil and gas industry contributed almost A$22 billion in taxes and royalties in 2024-25, according to the AEP.

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At the core of the debate is the Petroleum Resource Rent Tax, which lets LNG producers deduct capital and exploration spending — and carry unused deductions forward — before project profits are taxed. A 2023 attempt to tighten the regime stopped short of a broader overhaul, but limited the proportion of assessable income that could be offset by deductions to 90%.

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At least for now, voters appear unconvinced. Members of the ruling Labor party are breaking rank, with former minister Ed Husic warning in April that the country opened the door to others to “plunder our resources” without Australians getting the best outcome.

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“Australians overwhelmingly support a tax on gas exports,” said Fumi Hayashi, an analyst at InfluenceMap. “And momentum is growing.”

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—With assistance from James Mayger.

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