Written by Grant G
I wrote an article several years ago about why all the Australian LNG projects went over budget by huge margins..
Chevron(Gorgon Plant) ..And others operated in a wink wink nod nod arena, inside contractors and elaborate kick-back schemes were rampant, contractors would double and triple bill and more for work done on LNG plants and kickback money to the company
How this scam worked....Australia like British Columbia and Canada offered LNG companies accelerated plant build cost recovery, so..
So companies like Chevron made their operations as expensive as possible knowing the Australian taxpayer would ultimately pay the bill, these contractor kickback schemes...these contractors funneled monies back to the mother corporation..
So....The Australian taxpayer would pay for the LNG plant builds and..And the energy companies would also have in their possession the kickback money from their inside contractors..
British Columbia under Christy Clark and Rich Coleman are attempting to set up the same scenario with Petronas...Hidden tax deals, guaranteed to Petronas, no increases in taxation, royalties or green environmental fees regardless of company profit levels..
Even future BC Government`s hands would be tied, if a future BC Government raised corporate taxes, royalty rates or levied higher carbon taxes, if the British Columbia Government did such a thing Petronas under Christy Clark`s legislation could sue BC`s ass off, take you the taxpayer to court..
That original article from The Straight Goods is here..
Under the agreement, the B.C. government agrees to compensate Petronas, should future governments move the goalposts on things like LNG taxes and credits. For example, if the B.C. government were to increase its LNG tax rate, or introduce some new income or capital tax, Petronas would have the right to be compensated.
It would also be compensated if the province increases an LNG-specific carbon tax. Petronas would also be elgible for compensation if the province decreases the natural gas tax credit.
The agreement also ensures that, should more beneficial agreements be signed in the future with other proponents, companies like Petronas will be able to qualify for the more beneficial agreement.
Christy Clark and the BC Liberals secret deal with Petronas is so insidious for the British Columbia taxpayer ....In that secret deal with Petronas, if British Columbia ever signs another LNG deal with another energy company, if any part of the deal with any other LNG company is detrimental to Petronas they must be compensated...
The deal with Petronas is a two way street, both directions benefit only Petronas...BC Liberals through legislation are tying future Government`s hands, legislating permanent tax and royalty rates and .
And if any other company is offered a better deal(if that is possible), or if the province lowers the rebate on deep-well credits, again, Petronas by BC Liberal legislated law MUST BE COMPENSATED...
Even if another LNG company figures out a way to be more profitable than Petronas, again, the BC taxpayer must PAY PETRONAS...
A rather bold headline atop this post....Read the below information and you will see the extent these LNG companies will go to to screw the people and avoid paying anything to the public...
It will also shine a light onto Christy Clark and Rich Coleman`s British Columbia generational sellout.
While doing more research into the scams and tax avoidance schemes being orchestrated by LNG energy companies I ran across a doozy..
The Australian Government is taking Chevron to for tax avoidance and for running an elaborate tax credit scheme designed to milk the Australian taxpayers dry...
Chevron accused of scam against Australian taxpayers
Oil giant and Gorgon project developer Chevron faces accusations of running an aggressive tax avoidance scheme which derives profits from the Australian Tax Office.
SMH reported the findings of a report commissioned by unions in the United States, which shows the company created artificial interest payments against which it could exploit tax relief benefits.
The report described the Chevron scheme as “a sham” which “actually profited from the act of borrowing money at the expense of the Australian taxpayers”.
“It goes beyond any commercial objective of providing debt finance leverage to the point where the value of its tax benefits from interest deductions exceeds the actual before-tax cost of the loan", the report said.
SMH said the report was yet been made public.
With the ATO(Australia`s version of the CRA) currently pursuing Chevron in the Federal Court for $322 million including penalties, it is alleged the company designed a corporate structure in order to avoid $258 million in taxes from 2004 to 2008.
The scheme involved setting up a US subsidiary of Chevron Australia Holdings Pty Ltd (CAHPL) called Chevron Funding Corporation (CFC), which was established in the US tax-haven state of Delaware.
CFC borrowed US$2.45 billion in several tranches at an initial interest rate of 1.2 per cent and then loaned it to an Australian entity at 9 per cent interest, which it is alleged resulted in $862 million in tax free dividends over five years.
The union report states the interest on those loans “ranged from 8.8 per cent to 10.5 per cent", and that Chevron claimed tax deductions on those interest repayments to the rate of 30 per cent, exempt from withholding tax.
It has also been suggested that the ATO’s court case, in focusing on the margins above base interest rate as being not at arm’s length, has failed to fully tackle the broader issue of tax avoidance intended to make profits at the expense of the taxpayer.
A source said Chevron has recently opted to avoid making media statements
On another note....After construction of Australia`s LNG plants, ....Long term employment from 1/2 dozen LNG plants only numbers 3000 to 3500 long-term full-time jobs...
The LNG operators had low opinions of Australia's services sector's ability to support them as the industry became the world's largest in LNG, according to research from consultants Accenture.Large resources services group WorleyParson's chief executive Andrew Wood defended the industry, saying there should not be any concerns about its expertise or ability to provide labour, considering Australia had been exporting LNG for 25 years.
The massive numbers involved in building the projects were greatly reduced when they were operating - the Australian LNG plants already in production employ only 3,000 to 3,500 people.
Christy Clark and Rich Coleman are aware of the tax scams employed by LNG companies that hurt taxpayers, they don`t care, they are complicit in setting up provincial legislation that opens up the door for the same scams..
Site C Dam push by the BC Liberals is proof positive that the BC Liberals are complicit in GRAFT.
These BC Liberals only care about getting shovels in the ground before the 2017 election..
LNG is no longer about making British Columbia money...LNG is a means to remain in power, to continue to sell present and future generations down the river..
I`m waiting for John Horgan and the BC NDP to start screaming from the rafters, scream HELL NO...We the NDP will filibuster any proposed draconian legislation, we the NDP will hold press conferences, we, the BC NDP refuse to be complicit and robbing the British Columbia people..
We the BC NDP refuse to be complicit in selling out the taxpayer and risking our wild salmon and environment..
I won`t hold my breath..
Time for certain politicians to "walk the walk"
The Straight Goods
Cheers Eyes Wide Open