Gas policy consultants worked for industry and government at same time

A consulting firm hired by the federal government to help develop its Future Gas Strategy was simultaneously doing paid work for the gas industry and did not disclose that conflict of interest to the energy department.

An investigation by advocacy group Climate Integrity found ACIL Allen did not disclose that while it was working on two reports for the government, it was also undertaking work for Gas Energy Australia, the Australian Pipelines and Gas Association and the Business Council of Australia, which represents several gas giants as members.

Consultancy ACIL Allen was commissioned to assess proposed reforms to the east coast gas market in late 2023, at the same time it was working for three gas industry groups to produce reports about the benefit of gas to the economy and its role in Australia's transition to net zero emissions by 2050.

Months later, ACIL Allen was hired by the government again to provide advice on Australia's gas needs, to be fed into the government's landmark Future Gas Strategy — the policy plan for how Australia will transition away from gas towards net zero emissions.

"This will inform an understanding of energy security, whether other sources of firming can perform this role and whether government action is needed," a department official wrote about the ACIL Allen contract, in emails released under freedom of information (FOI) laws.

Tender records and documents obtained under FOI show ACIL Allen's work for government and industry over 2023 and 2024 directly overlapped.

The ABC attempted to reach ACIL Allen, including in questions sent by email. When the ABC spoke to an unidentified ACIL Allen representative by phone, he responded, "Yeah, no, I don't want to talk to you, thank you," before hanging up.

ACIL Allen also did not respond to questions put by Climate Integrity several months ago.

Future Gas Strategy promised plan for gas beyond 2050

The Future Gas Strategy delivered by Resources Minister Madeleine King in 2024 concluded that "the analytical findings are clear … natural gas is needed through to 2050 and beyond", with the policy committing to expand Australia's gas investment.

It prompted a revolt on Labor's back bench, with several MPs at the time telling the ABC they had been blindsided by the policy, and its focus on expanding gas and continuing it beyond 2050.

Climate Integrity executive director Claire Snyder said the gas industry had obvious financial interests in shaping the Future Gas Strategy, and ACIL Allen should have been clear it was also doing work for them.

"The gas industry clients of ACIL Allen have a direct financial interest in the outcomes of the Future Gas Strategy and of the gas policies that ACIL Allen is working on for the government. So to us that is a clear conflict of interest," executive director Claire Snyder said.

"What we have is a consultancy with undeclared ties to the gas industry advising the government on consequential gas policy.

"Our analysis has also shown that the body of work produced by ACIL Allen over that period of time consistently overstated the cost of zero emissions alternatives to gas, and it entirely omitted the climate cost of developing new gas supplies. The result of this is it advantaged the case for gas."

As an example, Climate Integrity pointed to modelling based on up-front capital costs of energy projects, rather than system costs comparing expense over a project's lifetime, as a methodology that advantaged gas.

Greens deputy leader Steph Hodgins-May said the non-disclosure called into question the government's Future Gas Strategy.

"It has no integrity. You cannot develop a gas strategy that is flavoured by … consultancy firms who are simultaneously working for the gas industry," Senator Hodgins-May said.

"It looks like, simply, a closed shop between government, between gas companies and their consultants, and this is exactly why the government won't act on a gas tax for Australians."

'Questions to answer' on how disclosure was missed

Commonwealth procurement guidelines state that a conflict of interest exists where a contractor or consultancy has a competing duty that could affect the way they perform their work.

The government's supplier code of conduct, which was introduced four days before ACIL Allen's first report related to the Future Gas Strategy, requires suppliers to declare and manage conflicts of interest.

Where conflicts of interest are disclosed, companies can take steps to manage them by isolating teams on each project. The ABC asked ACIL Allen what steps it took to manage any conflicts of interest, and did not receive a response.

The combined value of ACIL Allen's work for the government over the two reports was more than $350,000.

The company employs about 60 consultants, and regularly consults on energy, resources, transport, infrastructure and public policy for government and industry clients.

Ms Snyder said the onus was on ACIL Allen to declare any conflicts of interest, but the department had also failed to make sure the rules had been followed.

"One of the most important safeguards we have to make sure that public policymaking is free from industry influence is declaring conflicts of interest," Ms Snyder said.

"The conflict of interest rules show [ACIL Allen] should have declared that, they should have made that clear to government."

The energy department confirmed to the ABC that ACIL Allen "did not declare any conflicts of interest in the procurement process".

Senator Hodgins-May said the government and department must explain why perceived conflicts of interest were missed.

"There is this closed shop that is deeply disturbing and means that decisions aren't being made that are best for our climate, for our planet, for getting wealth back that Australians deserve," Senator Hodgins-May said.

"I would say government probably knew exactly what they were getting [ACIL Allen] to do when they contracted them, but there certainly are questions to answer about why government didn't do that level of due diligence, and why ACIL Allen didn't disclose really important public interest information."