Gas finance analyst Kevin Morrison, author of the IEEFA report, said those critics have since been proven correct.

“The government noted it at the time, but they didn’t delve into it,” Morrison said. “There was a lot of hype – but there were also a lot of warnings, people saying prices are going to go up if we start exporting. And that’s what happened.”

Since that time Queensland’s three LNG plants continued soaking up gas that would otherwise be supplied to the east coast either for export or as a feedstock to keep Gladstone’s LNG plants operating. Morrison said this has in turn driven up domestic prices.

The result has been “perennial threats of shortages” and higher gas prices for households, businesses and smaller manufacturers, many of which have been driven out of business, driving down demand for gas as they exit.

With a little under two thirds of the gas exported from Queensland – 60% – bound for China, Morrison said a gas glut anticipated by the end of the decade, caused by worldwide overproduction, is likely to coincide with the renewal of export contracts for the state’s gas.

More strikingly, a review of Queensland’s royalty scheme suggests only a fraction of the income generated from sending Australian gas overseas has been captured by the state. At the time of its creation, industry figures publicly said they anticipated paying $1bn a year in federal taxes and $300m each year in royalties to the Queensland government.

During the first seven years of gas exports, average royalties paid to the Queensland government amounted to $227m, or about 2.27% of LNG export revenue during the period. Recent reforms to the royalty regime introduced in 2021 have since increased that figure to 5%.

For all the promised riches, Morrison said these returns mean less money for the Queensland state government to build and run hospitals, schools and other key infrastructure.

“It’s been a pretty poor investment return,” Morrison said. “The construction of these three LNG plants at Gladstone are textbook for what not to do.”

“There was a lot that was promised, and there’s been many claims made going back to royalties, and employment, and about how this will be a great form of investment – in each case the outcomes have been pretty poor.”

“The clear winners out of this seem to be the gas customers in Asia Pacific, particularly China. It’s left us a poor record domestically.”

Morrison said there were serious questions about whether gas should continue to be redirected from the domestic market for export, and may give reason for caution about large-scale new developments.

“Now they’re trying to make the same arguments about the Beetaloo, so maybe we should be looking at what’s happened here in Queensland,” Morrison said.