SYDNEY MORNING HERALD
28 March 2016
The maiden cargo of natural gas from the gigantic Gorgon project off the coast of Western Australia set sail for Japan last week. After all the delays and the enormous costs blowouts it was quite a milestone.
Even though this is one of the world's premier resources projects and a marvel of engineering, its contribution to the Australian economy has been overblown, much in the way Indian conglomerate Adani has exaggerated the benefits of its Carmichael coal project, or the Gladstone LNG triumvirate has positioned itself as the nation's next export saviour.
Just before the first Gorgon shipment departed, federal Resources Minister Josh Frydenberg said: "Federal taxation revenue derived from the Gorgon project alone is estimated by ACIL Allen Consulting to total nearly $70 billion by 2040, and the project is expected to contribute more than $440 billion to national GDP."
Real returns from Gorgon are likely to be less than half that. The ACIL Allen report on which oil major Chevron, the operator of the Gorgon project, bases its claims, seems to have become accepted wisdom. Yet its assumptions are old, overly optimistic and ought to be questioned.