When Australia’s Woodside Energy Group announced April 29 that it plans to move forward with its Louisiana LNG export terminal, the state hailed the move as the “largest single foreign direct investment and greenfield project in Louisiana history.”

It could also create perhaps the largest single local tax giveaway in U.S. history, under a Louisiana law offering corporations property tax breaks worth billions of dollars, a new Sierra Club study shared with DeSmog finds — representing a massive subsidy from Louisiana communities for exporting fossil fuels from the U.S. to Europe and Asia.

That property tax revenue would normally go to fund schools, libraries, and roads. Instead, it will be pocketed by Australia’s Woodside, which aquired Tellurian Inc. and its Driftwood LNG project located in Calcasieu Parish in October 2024.

Woodside’s deal comes at a dire moment for local municipal budgets. Just three days after its announcement that it will forge ahead with the LNG project, the Trump administration announced massive reductions in federal funding for education, healthcare, and other domestic programs — which would leave communities across the country more reliant than ever on their local tax revenues. 

Louisiana’s state-wide Industrial Tax Exemption Program (ITEP), which gives corporations discounts on their property taxes, has been dubbed “the biggest corporate welfare program in the nation,” and LNG projects are among its largest beneficiaries.

“This project is still the single biggest application that the state has ever received under this program,” Sierra Club analyst Alison Kirsch, co-author of a December 2024 Sierra Club report on LNG subsidies, told DeSmog. 

Sierra Club estimates Woodside’s tax break for that single application could be worth roughly $2.8 billion over 10 years (up slightly from an estimated $2.4 billion in 2018).

That $2.8 billion handout to Woodside Energy could prove be a relative drop in the bucket as a wave of massive LNG export terminals comes online along the Gulf Coast. 

“If all of these terminals are built, together they will cost the residents of Calcasieu and Cameron Parishes $20.2 billion in lost revenue through 2040,” the December Sierra Club report, titled “The People Always Pay,” concluded.

The LNG export boom carries other costs that reach far beyond Louisiana and the Gulf Coast.

Expanding LNG exports will also drive people’s utility bills up across the U.S., a study released in December by the Department of Energy (DOE) found, warning that “unfettered exports” of LNG, which creates more demand for U.S. gas and competition among buyers, could push domestic natural gas prices up more than 30 percent.

Woodside’s Louisiana LNG project alone will consume nearly two percent of all the natural gas produced in the U.S., the company noted as its decision was announced.

Burning that much fossil fuel will add to the impacts of the changing climate, which are being felt worldwide. There are less than 400 coal-fired power plant units left in the U.S., amid a quarter-century-long decline for the highly polluting fossil fuel. But each new LNG export terminal unwinds the climate benefits from dozens of coal power plant retirements.

“Woodside Louisiana, if built, would create carbon emissions equivalent to 51 coal-fired power plants annually,” environmental group Rainforest Action Network found in a report released April 30.

Starting in 2029, Woodside’s Louisiana LNG plant is expected to single-handedly produce over five percent of the LNG on the global market, the company said this week, adding it expects the project will keep exporting fossil fuels for more than 40 years. 

Picking Up Driftwood

On Tuesday, Woodside Energy announced its final investment decision for the Louisiana LNG terminal in a call with analysts. CEO Meg O’Neill began the call with an indigenous land acknowledgement.

“We are presenting from Perth, Western Australia, and I would like to begin by acknowledging the Traditional Custodians of this land, the Whadjuk Noongar people, and pay my respects to their Elders past and present,” she said.

A full hemisphere away, workers had already broken ground in Calcasieu Parish. In fact, construction began years ago — and the project was originally slated to be completed by 2019, its property tax exemption application still shows.

But work on the troubled LNG terminal — then known as Tellurian’s Driftwood LNG — stalled amid a series of setbacks that saw major customers like Shell and Vitol abandon ship in 2022.

By 2024, Tellurian was warning investors of “substantial doubt” that the company could remain a going concern — and later that year, the company sold to Woodside at the firesale price of $1.2 billion, including assumed debts. Former Tellurian CEO Charif Souki, at one time the country’s highest paid corporate executive according to the Financial Times, lost “his luxury Aspen ranch, his yacht, and his shares in Tellurian, the floundering LNG developer he co-founded in 2016.”

The Australian company made fast work of reviving Driftwood, renaming it Louisiana LNG and announcing last month that it had found a major partner, Stonepeak, to take on a 40 percent stake in the terminal for $5.7 billion — money that will be paid out early in the terminal’s construction. Stonepeak calls itself an “alternative investment fund” that manages money for “pensions, endowments, and other large institutions.”

A world away from the hallways of investment funds and luxury Aspen ranches, nearly one in five residents of Louisiana’s Calcasieu Parish live in poverty, U.S. census figures show.

“A quick drive through these parishes shows a harsh economic reality: a key public library still closed four years after a hurricane that devastated the community, damaged churches torn down instead of being rebuilt, and officials in Cameron Parish still working to resume operations at the parish’s only hospital after it was damaged by Hurricane Laura in 2020,” Sierra Club’s “The People Always Pay” report noted. “The dangerous Calcasieu River Bridge is a notorious landmark that highlights the lack of infrastructural investment in the region; the National Bridge Inventory has rated the bridge a 6.6 out of 100 in terms of sufficiency.”

Property taxes when Louisiana LNG is completed could help to fund the parish and restore its infrastructure. But the state’s ITEP program offers corporations like Woodside an 80 percent discount on their tax bill that lasts for a decade — meaning billions of dollars in lost revenue.

“One of the reforms that activists won in 2016 was slightly more local control, because . . . this is local property taxes being exempted,” Kirsch told DeSmog. “But Gov. [Jeff] Landry’s executive order in 2024 did away with the reform, so the decision-making power is largely returned to the state.” 

Woodside did not respond to a request for comment from DeSmog about its expected tax breaks.

The company emphasized to investors that it sees the opportunity to profit from the cheaper cost environment in the U.S.

“The low-cost resource available in the U.S., low capital costs, and Woodside’s operational excellence allow us to generate a substantial return,” Woodside CEO O’Neill said as the decision was announced.

Louisiana officials emphasized Woodside’s voluntary contributions to local communities.

“In October 2024, the company invested $650,000 into Louisiana communities to fund five community grant programs and enable initiatives that support a broad range of needs in communities along the Louisiana Gulf Coast, including environmental preservation, coastal protection, education and workforce development,” the Louisiana Economic Development authority said as the decision was announced.

But the notion that companies should be allowed to substitute voluntary donations for tax contributions drew pushback from Sierra Club’s Kirsch.

“We have ways to ensure that companies pay their fair share, and that’s taxes,” Kirsch told DeSmog. “Let’s also not pretend that the values in dollar amounts are the same and just the mechanism is different.”

“We’re talking about orders of magnitude” in the difference between Woodside’s announced voluntary contributions versus billions in tax breaks, she noted.

$7 million jobs

Woodside isn’t the only LNG terminal to benefit from Louisiana tax breaks. In fact, the Sierra Club’s December report found that some projects have filed multiple applications for ITEP breaks — meaning their total tax relief could add up to even more than Woodside’s.

Supporters of property tax relief often cite the need to create jobs.

But Sierra Club found that most of the jobs associated with LNG projects are temporary — and the permanent jobs carry a high public price tag.

“Under ITEP, LNG export companies promise the creation of 686 permanent jobs in Calcasieu Parish and 2,154 in Cameron Parish,” the report found. “Accounting for the value of the ITEP tax exemptions, this amounts to an astonishing $7.7 million in lost revenue per new job created by LNG companies under ITEP in Calcasieu Parish, and $6.9 million in lost revenue per new job in Cameron Parish.”

The Louisiana LNG’s state filings show they promised to create 350 permanent direct jobs. But earlier this year, an executive order from governor Jeff Landry let some companies “opt out” of those requirements — meaning Woodside’s terminal could potentially be off the hook for mandatory job creation requirements.

“The rules of the program have changed over the years, always very generous to industry but sometimes even more extraordinarily so,” Kirsch told DeSmog.

That, of course, raises the question of whether heavily subsidized LNG projects are in the public interest. That’s the question federal law requires the DOE to answer as it considers whether to authorize exports of LNG to major buyers abroad.

The DOE authorization Tellurian secured for the Driftwood project expires in 2026 — meaning that an extension would need to be approved by the Energy Department during President Trump’s time in office.

Earlier this year, Trump, who has made fast-tracking LNG approvals a central plank of his plans to promote fossil fuels, retracted a Biden-era policy that required the DOE to give extension requests close scrutiny.