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Linc Energy founder Peter Bond blames the Queensland government over the collapse of his company. Glenn Hunt
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by Mark Ludlow
When one of the world's richest men, Roman Abramovich, flew half way across the world to meet Linc Energy chief executive Peter Bond in 2012, many thought it could not get any better for the up-and-coming rich-lister.
Less than a year later Mr Abramovich, the owner of Chelsea Football Club and valued at the time by Forbes Magazine at $US10.2 billion, had signed a deal to explore adopting Linc Energy's so-called ground-breaking underground coal gasification technology at Chinchilla in south-west Queensland to north-eastern Russia.
The confident, some would say cocky, Bond was on the rise. He was valued at $450 million in the 2013 BRW Rich List. Linc Energy was valued at $1.1 billion and with an island being the ultimate accessory for a millionaire, he had bought Dunk Island on the Great Barrier Reef.
Fast forward three years and Linc Energy is no more. The company, which delisted from the Australian Stock Exchange and moved to the Singapore bourse in 2013, was placed in liquidation on Monday with debts of $320 million.
Bond is bitter and angry about the collapse of his 20-year-old company into which he says he injected $200 million of his own money.
He believes the Queensland government - through heavy-handed regulation and a personal grudge against him - has killed the potential for a new underground coal gasification industry.
The Palszczuk government's decision in April to enforce a ban on underground coal gasification - which involves burning coal seams under the earth's surface to produce gas which can be used for power generation or fuel - was the final nail in the coffin for the fledgling industry.
Bond says he's not going to invest in new projects in Queensland any more and, in fact, he's planning to leave the Sunshine State altogether.
"Why did I bother? If you told me at the start I wouldn't have bothered - 10 years of my life and $200 million I could have thrown elsewhere you idiots," Bond said in an interview with The AFR Weekend.
"They think entrepreneurs grow on trees - go and find them. I get asked every week to invest in projects in Queensland and I'm not doing any of them. I'm based here now but I'm moving. I'm done."
Linc Energy's UCG plant is now the first case being pursued under the Palaszczuk government's controversial "chain of responsibility" laws which were introduced into state parliament last month.
The laws, which were originally aimed at other business tycoon, Clive Palmer and his Townsville nickel refinery, are broad and the industry warns they could be responsible for turning away business from Queensland.
On Wednesday the Queensland government slapped an Environment Protection Order on Bond which requires him to decommission the plant and rehabilitate contaminated soils that remain on site. (Linc is also separately facing five charges in the courts over allegedly breaching the state's environmental laws).
Linc Energy had allocated $3.6 million to rehabilitate the site. The state government says the figure is closer to $30 million and could go much higher.
The Department of Environment and Heritage dangerous levels of carbon monoxide, hydrogen and hydrogen sulphide were found in the soils at the Linc Energy site. Some Linc workers claimed their health was affected by working at the plant.
Bond rejects claims of environmental damage on the Chinchilla site. "There is virtually no damage the environment," he says.
The Linc founder says the minority Labor government was driving business away from the Sunshine State - which used to be home to business people who didn't mind pushing the envelope and taking a risk.
"It's going to curtail business in Queensland for many years and it's going to cost thousands of jobs," says Bond.
"They don't understand that people look at this from overseas and keep saying, 'Why do they keep changing the rules and moving the goal posts'. Eventually this new legislation will end up being the equivalent of Kevin Rudd's mining tax."
Linc Energy's pilot plant at Chinchilla was one of three UCG trials commissioned by the former Bligh Labor government when UCG and coal seam gas (which is converted to liquified natural gas to export) were jostling to be the "next big thing" for the Queensland economy.
While Bond and others believed both technologies could co-exist, he claims successive Queensland government's picked CSG over UCG - eyeing the big royalty revenue promised by the big players such as Origin, Santo and BG via the $80 billion LNG industry in Gladstone.
"It was over money. The CSG industry played the game and we got screwed over it," says Bond.
Linc Energy, like other gas producers, was not helped by the plunge in the oil price and debt refinancing problems, but Bond is adamant the claims of environmental damage was what scared away potential investors and resulted in the financial collapse of his company.
But the Department of Environment and Heritage Protection (EHP) believe the Linc Energy trial is one of the biggest breaches in the state's environmental history. They believe Bond could face personal criminal charges.
Environment Minister Steven Miles rejects claims Bond is being singled out, saying he and Linc Energy are being pursued for not following the law.
"The regulator acts independently here. There is no sense of political interference here," he says.
"The scale of the pollution around the Linc site is such that as a government it was our view that the very real risks that people were experiencing were greater than the potential economic benefit."
Liquidators are now in the process of selling off Linc Energy's assets including the Chinchilla property and gas assets in Uzbekistan and the United States.
Even though problems with two of the three UCG trials was enough for a state-wide ban, Queensland Resources Council chief executive Michael Roche believes the industry was shut down too quickly by the state government.
"I don't think people should lose sight of the fact Peter gave it a go and put a lot of money into testing the technology which had the potential to create a new industry in Queensland," says Roche.
"I think that's a missed opportunity and that technology will be commercialised off-shore. But it became too hot an issue for the politicians. But Peter didn't help himself because he barely hid his disdain for politicians. And clearly the community-side of things went pear-shaped and that was always going to make it difficult."
Former Australian Petroleum Production and Exploration Association executive Paul Fennelly, who now runs consultancy firm Criterion Corporate Advisory, says Bond and UCG created major headaches for the wider gas industry.
"A lot of people thought what he was doing was CSG. He caused sizeable reputational damage to the CSG industry. We were at pains to differentiate between the two and getting that message across was hard," says Fennelly.
Bond is bruised but he vows he'll be back saying he owns or controls "30 other companies". He says the Dunk Island redevelopment is about half-completed, but he won't say how much he's invested or when it will be done.
By his own admission, Bond is a deal-maker and always has potential projects on the go. But they just won't be in Queensland now where he says the economy has tanked.
"No one cares what happens in Queensland, everyone has moved on. There's nothing happening in Queensland," he says.
