Questions have been raised this week about the veracity of the federal government's commitment not to subsidise new greenfield gas projects with taxpayer money.

Established in 2016 to support infrastructure development in northern Australia and the Australian Indian Ocean Territories, the Northern Australian Infrastructure Fund (NAIF) describes itself as the "Australian Government's flagship financing agency for infrastructure in northern Australia."

On its website, NAIF lists projects for which its board has endorsed strategic assessment papers (SAPs) and that are proceeding through ongoing due diligence.

One listing cites $110m for an oil and gas extraction project in Queensland.

At a Senate estimate hearing this week, under questioning from the Greens senator Steph Hodgins-May, NAIF CEO Craig Doyle confirmed his organisation was "actively considering the $110m concessional loan" for Comet Ridge's Mahalo project.

"It's very early on in our stages, so we have given no commitment that we will fund that project and still needs to work through our rigorous processes…There's no commitment been given," said Doyle.

According to Comet Ridge, the Mahalo gas project - located in the Dension Trough, approximately 240km west of Gladstone in the southern Bowen Basin - has been heavily appraised to date, with strong flow rates achieved and reserves independently certified. 

Government assurances

The possibility of Comet Ridge and Santos receiving funding from NAIF appears to fly in the face of assurances made by the government.

In 2021, the climate change and energy minister Chris Bowen strongly criticised the subsidies offered in the Morrison government's "gas-fired recovery," some of which were cut back in Labor's first budget.

In 2022, Bowen was reported to have promised "there would be no government finance for new coal and gas fields" and has repeatedly opposed taxpayer funding to gas power stations. 

Likewise, last year Senator Jenny Macallister, on behalf of Bowen, confirmed public funding would not be available for the Beetaloo Basin, saying: "The Albanese Government has not provided, and has no plans to provide, public funding or financial support (such as underwriting, insurance, loans or equity) for the construction of pipeline infrastructure to deliver gas out of the Beetaloo sub-basin into the existing domestic pipeline network or to LNG export terminals. Investing in any such infrastructure would be a commercial decision for private sector investors."

The government's National Reconstruction Fund also specifically prohibits its funding from being used for coal or gas extraction, a provision missing from NAIF's legislation.

Notably, in 2019, when NAIF was looking to subsidise Adani's coal mine, then-Labor opposition opposed the loan, saying the mine must "stack up on its own".

When Senator Anthony Chisholm was asked about "some kind of taxpayer subsidy, would Labor support that?" He replied: "Absolutely not, Qld people wouldn't want that. It needs to stack up on its own terms."

On notice

When Hodgins-May asked the Minister for Indigenous Australians, Malarndirri McCarthy - who was in the hearing representing the government - for any kind of explanation, she blankly replied that she would take the question on notice.

Speaking exclusively to ENB, Hodgins-May said: "It's becoming increasingly clear the Labor Government cannot be trusted to honour its own commitment not to spend public money on new coal and gas.

"The NAIF even considering a loan of this size for Comet Ridge completely contradicts the government's policy. It risks bankrolling yet another gas project with taxpayer money.

"Public money should serve the public good, not prop up fossil fuel projects that we don't even need.

"The growing disconnect between the Labor Governments' words and its actions on climate is becoming impossible to ignore."