If Oil Drillers Spill In Pristine Australian Bight, Australian Taxpayers Get To Cover The Costs
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In response to a question from Greens senator Peter Whish-Wilson during Senate estimates last year, treasury officials have confirmed that clean-up costs for oil spills from exploration wells would be classified as “exploration expenditure” under the PRRT regime. It means the costs of cleaning up oil spills from exploration wells would be tax deductible, and could be held over and “uplifted” into future years at an annual rate of 17.5%.
“If there was a problem with an exploration well requiring remediation expenditure, to the extent that the expenditure had a close or quite direct connection with the physical activities of the petroleum project, it would be considered exploration expenditure for petroleum resource rent tax purposes and would be available to be carried forward and uplifted,” a treasury official said.
The Australian Taxation Office has independently confirmed that the cost of cleaning up oil spills from production wells – different from exploration wells – could be uplifted by 8% a year, according to Footprint News. It means Australian taxpayers would be forced to subsidise the clean-up of oil any spill in the pristine Great Australian Bight, paid for via a loss of future taxpayer revenue.
In December, oil giant BP officially withdrew its application to drill for oil in the Bight, ending months of uncertainty after it announced it was not pursuing the project but then did not withdraw its application. But Chevron still plans to drill four exploration wells in the area, starting in 2017, with public consultations with stakeholders slated for the first quarter of this year.
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https://www.theguardian.com/australia-news/2017/feb/25/taxpayers-to-pay-for-oil-spill-clean-ups-under-petroleum-resource-rent-tax