There are calls for a review of New South Wales’ key gas policy after it was revealed consulting firm Ernst & Young (EY) contributed to research while working with Santos.
Key points:
- EY accepted a government contract to work on its Future of Gas Statement while also working with Santos
- It has denied any overlap in its work for the two clients and said there was no conflict of interest
- Stakeholders disagree and have called for an independent inquiry into the circumstances behind the statement
EY accepted a $67,000 contract from the former state government to work on its Future of Gas Statement between July 2020 and June 2021.
EY audited energy company and gas provider Santos during that time, and also provided it with other financial services.
But a company spokesperson denied any overlap between EY’s work for the two clients, and said any suggestion of a conflict of interest was “inaccurate”.
“The work we undertook was economic modelling — identifying the impact of gas price changes on the NSW economy,” the spokesperson said.
“The parameters of that modelling were set by the government.”
The EY spokesperson also said the firm did not make any recommendations into gas exploration or production.
“When necessary, EY will notify clients when we identify real or perceived conflicts of interest, and how those conflicts will be managed. In this case, we did not identify a conflict or perceived conflict.”
The Future of Gas Statement renewed several petroleum exploration (PEL) licences in NSW’s north-west “in order to support the future of the Narrabri Gas Project”.
The statement said the Santos project would account for about half of the state’s gas needs across its 25-year lifespan.
The approved project is in the first phase of its operation, which includes preliminary activities such as drilling water monitoring bores and gas wells.
But it cannot progress further until an appeal brought by the Gomeroi Native Title Applicant in the Federal Court, which kicked off today, is finalised, and the route for the Hunter Gas Pipeline to transport the gas is established.
A ‘question of transparency’
Gomeroi woman Sue Ellen Tighe, who campaigned against the Narrabri Gas Project, is from Coonabarabran and does not accept EY’s explanation.
“They were in full knowledge that they were receiving payments from both parties, so it’s a question of integrity and transparency,” she said.
Ms Tighe has called for a full and independent review of the situation.
“We should be holding our government more accountable in this space,” she said.
“I was gobsmacked and I’m really shocked that the disclosure of this only came about through the [Department of] Regional NSW Annual Report.
“An outcome from that [inquiry] should be that all of these consultancy companies, when they’re doing work for the government, they should be fully vetted by an independent body.”
‘Done without consultation’
Paul Nankivell is an economist and farms a property on the border of a reactivated PEL on the Liverpool Plains.
In his mind the conflict of interest is clear.
“The current government would be very wise to take a breath, and to review this Future of Gas Statement, particularly the way it was prepared, and particularly the economics of it,” Mr Nakivell said.
“It was done without any consultation, and a player in the preparation of the statement was working for the proponent [Santos] at the same time.”
Minister for Natural Resources Courtney Houssos was contacted for comment, as was opposition spokesperson for natural resources Dugald Saunders and Member for Barwon Roy Butler.
