Oil and gas firing national growth

June 3rd, 2016

Environmental lobby groups recently told a Parliamentary committee the benefits of the oil and gas industries were “easily overstated”, even going to so ridiculous an extreme as to claim the North-West shelf project had delivered virtually no economic benefits over the past 30 years.

So far this week they have had little to say about the latest figures from Government agencies showing that oil and gas is firing jobs, growth and value-add in Australia.

National figures on GDP growth and the national value-add by sector have blown apart activist claims that oil and gas are not delivering for the nation.

The first quarter GDP figures were better than expected, supported by a big lift in production and export  – with the export element providing a double benefit for the economy.

Not only are the millions of tonnes of LNG from Gladstone new product for the nation, they are value-add to the raw material of natural gas (most of it coming safely from coal seams in south-western Queensland).

As APPEA points out LNG was up 5% in the period, pumping up national GDP by an estimated 1%.

And the terrific news for the Governments of Queensland and Australia, and the nation’s export profile, is that our LNG export production is only just starting its strong ramp-up stage.

The GDP and value-add figures from LNG will continue to rise dramatically as we go into 2016-17, gaining from increased production by Santos and others in Gladstone and Chevron, as it brings on exports from its enormous Gorgon project off the WA coast.

To understand the impact of oil and gas more broadly, the statistics released this week by the Commonwealth Chief Economist are both illuminating and compelling,   as we explain here.

Oil and gas has jumped to the top of the tree in terms of major productive sector value-add to the economy – outstripping food and agribusiness,  mining equipment technology and services, advanced manufacturing, and medical technology and pharmaceuticals

Noting these figures are 2014-15, it can be expected that oil and gas will dramatically stretch its lead at the top of this table in the immediate future.

If the published figures were able to be ‘up to the minute’, this week they would be registering the news of the important kick-off of the second production train at Santos’ GLNG project.

Within a few years, the developments at Gladstone, plus the projects off the West Australian coast  will catapult Australia to the top of world’s list of leading LNG producers.

And that will be great for Australia.

 

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  1. Bruce on 4 June, 2016 Reply

    Energy Quest also released their update of the Quarter and found that LNG shipments out of Queensland alone at 3MT plus was even great than Russia’s for the same period (being approx. 2.2 mt for the quarter.
    Evidence that not only is CSG is an intergral provider of clean energy to Qld. and NSW but is now starting to power Gladstone’s customers in Asia – also contributing to lowering Green House Gas emissions, as many of those Asian customers will be moving away from coal fired power to clean natural gas from Qld’s CSG fields.
    Fantastic New that Chevron’s Gorgon plant is starting to move into production, and as it also fires up, the total LNG exports will zoom.
    As to value, well expect GAS (LNG) to move into top spot as the oil price and the LNG prices also recover.
    These are great LONG TERM projects, and every company involved needs to be congratulated for doing the hard yards to get them to commissioning stage.
    Well done to all.

    To all those activists out there – Lock the Gate, Australian Institute, Friends of the Earth et al – read and weep – the movement to gas is increasing and will not be decreasing – the amazing thing is LNG and natural gas in our homes and industries not only provides abundant jobs and economic growth, not only for direct jobs but many fold indirect jobs, but is it also a catalyst to drive down our emissions – for evidence just have a look at how the uSA managed to drive down their emissions over the last 5 years – through fracking to enhance production, increasing production, driving down the gas price, and becoming cheaper than coal for power generation, which of course has driven down emissions!
    Great news and lets hope all the projects ramp up to full production successfully.

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