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Barnaby: Last Time I Checked, The War Is Over

7 Oct

Senator Joyce writes for the Canberra Times (my emphasis added):

Resource wealth should deliver benefits to the regions

One of the world’s first billionaires, J. Paul Getty, once remarked that ”the meek shall inherit the Earth, but not its mineral rights”. I find this incongruous coming from a famous industrialist and philanthropist who was a resident in a country where generally the contrary is the case.

Australia, in contrast, has variant forms of ownership between the land title and the mineral rights. Over the past 100 years, there has been the convenient moralising, prior to excising the property rights from the landowner, often without compensation.

The Petroleum Act of 1915 was the mechanism by which the Queensland Labor government removed the petrol and gas rights from farmers. The reading of this act puts the fallacy to the argument that farmers never owned these rights.

The rights were taken away because of World War I, but last time I checked the war is over.

Coal seam gas, with the appropriate environmental checks and a fair return delivered to the landowner, has the capacity, just in Queensland, to deliver the energy equivalent of almost five billion barrels of oil. Managed properly this could be a new resource boom. Badly managed it could tick every box of a social and environmental disaster.

In America private landowners retain the rights to the shale gas on their property. In Louisiana, gas companies recently paid a local church $27 million just for the rights to drill on parish land.

Real estate agent Mike Smith was paid $1.3 million for the right to drill on his 121ha, and a 25 per cent royalty.

There are around one million private owners of mineral rights in America, accruing $21.5 billion in royalty payments each year.

Compare that to Australia. On evidence received by a Senate inquiry, landowners receive about 75c for every thousand dollars of coal seam gas produced. Mike in Louisiana gets over 300 times that level of compensation.

Lately I have found that my involvement in trying to get a better deal for farmers has become slightly more personal with exploration rights being granted over my land. My incentive to swim is extenuated by being dropped in the coal seam gas ocean. If more of this enormous opportunity goes to local landowners, then that money will stay in the town and help develop the town. That money will be spun around the local economy, driving development and spreading further opportunity.

In 1930 came the discovery of the East Texas Field and much of this wealth accrued to ordinary Texans. Some, like the Clampetts, may have left for Beverly Hills, but many stayed. Dallas, once a backwater, boomed. The University of Texas is now in the top 50 universities in the world, a higher ranking than any in Australia. From the desert, Houston emerged to be the fourth biggest city in America.

The East Texas Field was the biggest oil field discovered up to that time at six billion barrels of oil. The gas in the Bowen and Surat basins amount to about five billion barrels of oil.

But that opportunity will only truly create a lasting legacy of wealth if the people of Roma, Chinchilla, Dalby and Gladstone can keep some of the wealth they create. There is no reason Roma can’t be a vastly more substantial town than it is.

There are many in Australia who are disdainfully dismissive that we can develop anything away from the harbour in Sydney. I find this lack of vision restrictive and in some instances noxious. The wealth that is apparent from the current minerals boom should be instrumental in developing new parts of Australia.

In the current discussion that Labor has about ”squandering the minerals boom”, if you dig under the surface what they’re actually doing is propping up the demographic status quo, rather than developing something new. You never hear them talk about delivering the royalties back to the regions from which they emanated.

You never hear them talk about developing new population centres in the north, or more central parts of Australia. You do hear about the minerals wealth of the mining boom building a new electrified rail line from Chatswood to Parramatta, or a new airport at Perth.

Australians are people of vision and want to see our natural wealth invested in a visionary way. Private individuals, who live in an area, will do that and we should be vastly more dubious about the platitudes of those in the political house to deliver an outcome more than a stone’s throw away from the demands of the political franchise.

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