New report covers the wrong territory
November 17th, 2015
Anti-gas industry economists at The Australia Institute are at it again – this time making some big claims about the potential impact a shale gas industry could have on the Northern Territory in a new report called ‘Be Careful What You Wish For’.
Queensland is undergoing an economic renaissance on the back of natural gas development – and the NT would literally be in the dark without gas. But these facts don’t get in the way of the doomsayers at the Australia Institute.
In its latest piece of economic voodoo, TAI completely sets aside the $60 billion of investment in Queensland and the more than 40,000 jobs created, somehow concluding that this is all illusory, and that the Northern Territory should ‘be careful what it wishes for’.
A Territory which literally runs on gas should for some reason fear the very thing which is powering its cities and beware of billions of dollars of further investment in jobs and infrastructure? That’s an odd stance to adopt.
But, as with everything TAI releases, it’s worth looking beyond the headline.
After all, this is the same group who quietly withdrew, corrected and reissued another report on the gas industry after inadvertently killing off a US nurse, and whose ability to interpret figures has been called into question before.
Let’s take a look at what TAI has to say:
TAI Claim 1 – ‘there will be business deterioration in financial capital and local environment’.
- Financial Capital:
- However, any concern over growing inequality in resource regions may be misplaced. An analysis of census data by Fleming and Measham has found that income inequality, measured by the Gini coefficient, has increased on average less in mining regions than non-mining regions between 2001 and 2011 (Chief Economist Report, p. 39)
- The CSG sector, like other resource sectors, tends to pay higher wages than many other jobs in regional economies…Analysis of business income in certain towns showed a five-fold increase in one year. (Chief Economist Report, p. 31)
- Local Environment
- Geological impacts from CSG development have thus far been minimal, in terms of both induced seismicity and subsidence. (Chief Economist Report p. 44)
- As technologies and CSG development practices improve, the size of the footprint per well is likely to continue to reduce. (Chief Economist Report p. 35)
- Numerous in-depth reviews by experts in other countries have found that, subject to the implementation of appropriate controls and standards, the use of hydraulic fracturing does not pose a significant risk to the environment. (Chief Economist Report p. 43)
TAI Claim 2 – Community wellbeing will suffer as a result of CSG.
- Mentions of a recent survey of the Western Downs region by CSIRO. The same survey in the Chief Economist report says “Despite these social issues, a CSIRO survey on wellbeing in the Western Downs found that community spirit was one of the most positively perceived aspects of wellbeing. Survey respondents reported that they felt that they could rely on others in the community to help, they could work together, and that relationships within the community were friendly. Community spirit was also found to have a strong contribution to the overall sense of wellbeing.” (Chief Economist Report p. 42)
TAI Claim 3 – Job Loss: Due to the development of new CSG mines, local businesses and communities will experience job loss.
- “Consistent with predictions, a range of studies find strong evidence that the growth of the CSG industry has provided increases in both direct and indirect employment, particularly in the construction and professional services sectors” (Chief Economist Report p. 27)
- “The expected positive job multipliers across a broad range were evident only in the construction and professional services industries, with 1.4 new construction sector jobs and 0.4 new professional services jobs for each additional CSG job, but no impact on jobs in retail trade or other local services.” (Chief Economist Report p. 29)
Claim 4 – Manufacturing Impacts:
- Contrary to expectations, there was no significant loss of jobs in the manufacturing sector as a result of the growth of CSG in the period covered by the data. (Chief Economist Report, p. 29)