Australian shale gas could boost NT economy by A$22bn

Australia - northern teritorry
Source: DollarPhotoClub

The development of shale and tight gas resources in Australia’s Northern Territory (NT) could generate up to A$1bn per year of state revenue and create an employment boost of 6,300 jobs over a 20 year period, a new report has found.

The report, commissioned by the Australian Petroleum Production & Exploration Association (APPEA) and produced by Deloitte Access Economics (DAE), examined two potential growth scenarios based on the supply of shale and tight natural gas to the NT, east coast and LNG export markets between 2020 and 2040.

The “Success” scenario, which assumes the development of two brownfield LNG trains in the NT
to export shale and tight gas to overseas markets, predicted the territory’s gas production would more than double from 231 PJ per annum now to 586 PJ per annum by 2040. The cumulative increase in the NT Gross State Product (GSP) was estimated to be A$17.2bn, a rise of 26 percent from current figures, and create 4,195 full time employment positions.

The more ambitious “Aspirational” scenario assumed the development of three brownfield LNG trains, a significantly higher supply of gas to the East Coast and a higher supply to the NT domestic market. Production under this scenario was expected to quadruple to 910 PJ per annum by 2040 with a 37 percent increase in GSP at A$22bn, and 6,321 full time positions.

Both scenarios utilised the most ambitious predictions of future demand as developed by the Australian Energy Market Operator (AEMO). “As such, they do not necessarily represent expected outcomes. Rather, they are intended to reflect economic benefits that may accrue if the underlying ‘upper-bound’ assumptions materialise,” the DAE report warned.

APPEA Chief Executive, Malcolm Roberts, said the report confirmed that shale gas had the potential to generate significant long-term economic benefits for the NT.

“The Territory economy is already outperforming much of the nation thanks to the development of the Ichthys liquefied natural gas project in Darwin and investment in other natural gas projects,” Mr Roberts said.

“While still in its very early stages, shale gas could underpin a new wave of investment delivering jobs and economic opportunities for decades to come.”

Chief Minister, Adam Giles, speaking at conference in Darwin said that the royalties from onshore shale gas projects in the NT would be channelled into a fund for vocational training and primary and high school education.

“For all those people that ask those questions, ‘What’s in it for me?’ this is where you start see development in the mining, in the oil and gas sector and something come back to mums and dads and people,” mister Giles said.

However not everyone is convinced of an Australian shale boom. The Australia Institute, a progressive think tank, along with Victorian farmers commissioned a report from the University of Melbourne which estimated that domestic gas consumption could fall by about 50 percent within the next decade.

The Institute’s Rod Campbell said “A big gas project like that will employ a few thousand people for a year or so, or perhaps even less, while it’s being constructed, and after that it employs almost nobody,”.

“Spending a lot of money on measures that assist the mining and gas industry takes money away from schools and hospitals.”

The DAE report can be viewed here.

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