Federal Resources Minister Matt Canavan is not only espousing a A$1 billion taxpayer leg-up for Indian coal magnate Gautam Adani to build a rail line but has now called for public money to be deployed for gas exploration in southeast Australia.

It is not as if Exxon and BHP, which operate offshore gas rigs in the Gippsland basin, or other big gas players for that matter, need help from taxpayers for their exploration. But the minister wants to lend them a hand anyway.

Before readers draw the conclusion that spraying taxpayer funds about on gas exploration is the apogee of corporate welfare, it is worth saying that Geoscience Australia has a good track record of hydrocarbon exploration and one which has encouraged investment in the sector over the years.

Still, the question ought to be asked: is it necessary to spend public money on things that will confer a private benefit? Which brings us to the flip-side of public benefits and tax.

As consumers open up their power bills this winter and stagger across the living room in “bill shock” to turn down the heater, they may well be reminded that the largest oil company in the US, Exxon, has paid almost no tax in three years on more than A$25 billion in revenues in Australia. Meanwhile, domestic gas prices have tripled.

ExxonMobil Australia has got away with this by “debt-loading” itself with A$17.6 billion in related party loans so A$600 million gets funnelled offshore before tax is paid on it. Its auditor is PwC.

Rival oil giant Chevron, whose 2016 financial statements lobbed in recent days, shows an income tax refund last year of US$89.6 million (tax paid last year US$47.5 million).

Interestingly, the revenue for Chevron Australia Holdings is US$1.6 billion and finance charges from its US parent company were just shy of revenue at US$1.4 billion thanks to interest on the leviathan US$30 million in related party borrowings. Its auditor is PwC.

Chevron lost Australia’s biggest ever transfer pricing case in April and was ordered by the Federal Court to pay A$340 million in taxes and penalties. It is seeking leave to appeal to the High Court as much is at stake. The case revolved around a money shuffle in which Chevron borrowed money in the US at less than 2% and lent it to its Australian business at around 9%.

But that was just US$2.5 billion in loans. There is another US$30 billion to be assessed so the stakes are very high. Unlike Exxon, Chevron’s projects are in the ramp-up or development phase and are selling into an oversupplied global market.

There seems no relief on the horizon from rampaging energy costs. A report by gas analyst Bruce Robertson of the Institute for Energy Economics and Financial Analysis demonstrates that even though wholesale gas contract prices have soared as high as A$20 a gigajoule in Australia – the Japanese have been paying a third of that for Australian imported gas – the gas producers are not doing it easy. Such is the debacle of the Gladstone LNG projects.

Santos scrambling to buy gas from other producers – to make good on its Gladstone LNG export commitments – has made it the pariah of the sector. Unfortunately for Santos it may have to tap the market in another capital raising.

Robertson points to the need for a further billion-dollar write-down to the GLNG asset value and says Santos is in a bind. It’s share price is low, at $3, so a capital raising is expensive and dilutive. It has US$2 billion in cash but US$5 billion in debt, operating costs of US$2 billion and equity of US$7 billion.

Equally worrying is the ebullient oil price forecasts that underpin profit estimates. Oil is now trading below US$50 a barrel.

“In 2022, official forecasts (Office of the Chief Economist) are some US$7.10 below those used by Origin and over US$15 below those used by Santos,” says the report.

“If oil prices fall by US$5/bbl in all years, the value of GLNG declines by US$439 million … If Santos used official Australian government forecasts, write-downs of over US$1 billion would need to be made to its GLNG venture.”

This is bad news for beleaguered Santos shareholders who were hit up for a A$2.5 billion rights issue only two years ago. It’s also bad news for Australian gas customers as Santos, and Origin for that matter too, will want to keep domestic prices as high as possible.

This column, co-published by The Conversation with michaelwest.com.au, is part of the Democracy Futures series, a joint global initiative between The Conversation and the Sydney Democracy Network. The project aims to stimulate fresh thinking about the many challenges facing democracies in the 21st century.