new gas plant is a field day for party donors

A $600 million subsidy for a gas plant in Kurri Kurri makes no commercial sense for the taxpayer, but there are plenty of windfalls for Liberal Party donors.

Jeff McCloy and Scott Mitchell (Images: AAP)

Has there ever been a project that so neatly fits the government’s political agenda as well as the commercial interests of its mates?

The $600 million subsidy announced for a gas plant in Kurri Kurri makes no commercial sense for the taxpayer, but there are windfalls everywhere you look for Liberal donors.

From the owners of the proposed site through to the Hunter Gas Pipeline and on to the Santos’ Narrabri gas project, there are vested interests as far as the eye can see.

Jeff McCloy

Jeff “walking ATM” McCloy stands to be one of the biggest potential beneficiaries of the plant. The former Newcastle mayor purchased the prospective site, an old aluminium smelter, with John Stevens in 2020.

At the time the pair said the purchase was the biggest of their careers and that the industrial part of the land would be ideal for either a solar farm or a gas peaking plant.

Labor’s Jenny McAllister asked officials from the Department of Industry, Science, Energy and Resources this month whether they were aware that McCloy, a “major Liberal party donor”, owned the prospective site.

“That would be a matter for Snowy Hydro,” department secretary David Fredericks told the Senate estimates hearing.

In response to a question about what Snowy Hydro agreed to pay for the purchase of the land, Fredericks said: “That would be, firstly, a matter for Snowy Hydro; secondly, potentially subject to cabinet in confidence; and thirdly, potentially a matter of current commercial in confidence.”

Hunter Gas Pipeline

The gas for Kurri Kurri will likely come from the Santos Narrabri project, delivered via the Hunter Gas Pipeline.

According to The Centre for Public Integrity, pipeline developers Hilton Grugeon and Graham Burns have both been major donors to the NSW Liberals, donating substantial sums over previous years via Hunter Land Pty Ltd, a company they cofounded and still operate.

Santos

Santos’ Narrabri gas project would also be a potential beneficiary of increased demand for gas in the area.

Santos is a major political donor, handing nearly $2.5 million in donations to both sides of politics in the last 20 years. In 2017-18 it handed over $95,000 to Coalition branches and slightly less to ALP branches.

The company this month welcomed progress on Angus Taylor’s National Gas Infrastructure Plan, which takes in the Kurri Kurri plant.

Snowy Hydro

The government is subsidising the new gas plant through Snowy Hydro, which is fully owned, controlled and financed by the Commonwealth. Its joint shareholder ministers are Taylor and Finance Minister Simon Birmingham.

At the start of last year the government appointed David Knox, former CEO of Santos, to be the new Snowy Hydro chair.

Also on the Snowy board is former federal director of the National Party of Australia Scott Mitchell, who is registered as a lobbyist for major corporations including Rio Tinto, which has been campaigning the government on energy prices. Rio stands to be one of the only companies affected by the shutdown of the Liddell coal-fired power station, as one of the owners of the Tomago aluminium smelter, which has been powered by it.