Questions from Nationals Senator Bridget McKenzie at Senate hearings on coal seam gas today in Canberra reveal that farmers are getting a dud deal.
Santos has revealed to the Senate that their Gladstone LNG project is set to produce $9 billion a year in revenue. Questioning in the Senate Rural Affairs and Transport Committee today revealed that a landowner can expect on average, at most, $2,500 per year per well. The GLNG project is set to drill 2650 wells meaning that landowners can expect only about $6.6 million of the $9 billion in revenue, or about 0.074%.
“I think if someone was going to come on to my property to make $1000 and offered me 74 cents in return I would consider that grossly unfair” said Senator McKenzie today.
“These outcomes seem to be a consequence of the imbalanced negotiating rights that farmers have. Under current laws, the bottom line is that gas companies can come on to someone’s land if negotiations fall over. There is a gross imbalance in negotiating power.
Senator Barnaby Joyce added “It’s quite obvious that there is an absurd imbalance between what the farmer gets and what the gas company gets, and I think it deflates the image that they are trying to pump up that they are on the farmer’s side.
“What do you call something that lives on your body, takes everything and leaves nothing but a scar? I think it rhymes with beach?
“If you want an effective relationship, 75 cents for $1000 doesn’t cut it. Elastic-sided boots and broad brimmed hats, does not equal empathy, a fair return does.”
Under questioning Santos did not deny the 0.074% figure but instead responded:
You have taken one aspect of our compensation regime, which is a per well amount. There is much more to how we compensate landholders.
It’s not clear what that extra compensation is. Do they provide morning tea?
Queensland Gas Company would not provide the proportion of their revenue that they pay to landholders, stating that "I don't think that is a relevant figure". Many farmers would presumably disagree.
It’s up to the coal seam gas industry to come clean on how much of their revenue is returned to landholders and the community.