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Benefits Of Gas-Based Manufacturing Highlighted In New Report

Central Queensland: Bowen Basin

UPDATE | Business leaders from the Australian chemistry industry have released a new report highlighting the vast economic benefits of gas-based manufacturing in Australia.

The news comes after more land in the coal-rich Bowen Basin opened for exploration.

Mines Minister Dr Anthony Lynham said tenders opened for five areas with high potential for steel-making coal and thermal coal for electricity and industry.

The Chemical Sector Economic Contribution Analysis report, Commissioned by members of Chemistry Australia, details the large and valuable contribution the Australian chemistry sector makes to the economy.

Chemistry Australia CEO Samantha Read said the Australian chemistry sector contributes $38 billion to Australia’s GDP and supports the employment of hundreds of thousands of Australians.

“The sector underpins more than 1,600 full time equivalent jobs for every petajoule of gas it uses. This is important because when you look at other industries that use gas, the number of jobs the chemical industry supports is much higher; 80 times higher than LNG, and 150 times more than the gas-fired electricity generation sector,” Ms Read said.

“We also add $286 million of value to every petajoule of gas used in our sector, which is again much higher than other gas-based industries; 33 times more than LNG, and 68 times more than the gas-based electricity generation.

“Australians receive $277 million more in economic benefit from a petajoule of gas that goes through the chemistry industry than they do from a petajoule of gas going to LNG exports.

“This doesn’t mean these industries are less important to the economy, but it does provide an indication of the value of our sector, and the potential impact of lower chemical sector production on the economy resulting from the current gas crisis.

“The crisis is impacting investment decisions of companies in the chemistry industry today and future investment considerations, which is a significant lost opportunity for Australia.

“In the current climate of slow economic growth and declining economic complexity, we can’t afford to lose investment in an industry that makes such a large and valuable contribution to the economy.”

Ms Read said recent moves by the Federal Government to improve supply of affordable, reliable gas to domestic industries were a step in the right direction, but greater urgency was needed to solve the shortterm challenges that are facing the sector.

“Government intervention is necessary to address the dysfunction in Australia’s gas market, so as not to lose manufacturing capability and further strip complexity from Australia’s economy.”

Ms Read said increased supply also needs to be enabled by state governments.

“The moratoria on onshore gas exploration in Victoria must be lifted, and projects such as Narrabri in NSW need to go ahead to ensure there is sufficient gas available in the markets where the gas is used.”

“We hope the Victorian Government will remove the ban on gas exploration and development as it’s hurting manufacturing, especially in the chemistry sector.

“The Acil Allen Consulting report we’ve released today shows that the chemistry industry contributes $11 billion to Victoria alone, with 65,000 jobs dependant on the industry.

“These jobs are at risk until gas supply and price issues are addressed.

“Like the ACCC, we support taking a science-based, case-by-case approach to gas developments rather than blanket bans in Victoria.

“We urgently need additional supplies of gas to put downward pressure on prices to secure manufacturing jobs.

“It’s time for state governments to act.”

Acil Allen Report – Chemical Sector Economic Contribution Analysis

Released on Tuesday by Chemistry Australia, the Acil Allen Consulting report tables the economic contribution of the Australian chemistry industry, which represents the largest gas based manufacturing sector in Australia.

The report estimates the direct and indirect economic value of the output of the Australian chemical industry during the financial year 2017-2018.

Key data:
• The chemistry sector drives more than $286 million of local economic activity for every petajoule
of gas it consumes
• This is 33 times more than the LNG industry and 68 times more than the gas-fired electricity
generation industry
• The sector also supports more than 1,600 full time equivalent jobs for every petajoule of gas it
uses; this is 80 times higher than LNG, and 150 times more than the gas-fired electricity
generation sector
• Australians receive $277 million more in economic benefit from a petajoule of gas that goes
through the chemistry industry than they do from a petajoule of gas going to LNG exports
• The chemistry industry underpins more than 212,000 full time equivalent jobs across the
economy
• 80 per cent of the chemistry sector is located in Victoria, NSW and Queensland
• The chemistry sector directly employs 61,458 people in full time equivalent jobs with the bulk of
employment concentrated in Victoria (19,550), NSW (19,303) and Queensland (11,372)
• In 2017-18, the chemistry sector contributed $11.2 billion to NSW GSP, $10.5 billion to Victoria
GSP and $6.8 billion to Queensland GSP

EARLIER | More land in the coal-rich Bowen Basin is opening for exploration to fuel the next round of mining jobs.

Mines Minister Dr Anthony Lynham said tenders opened on Friday for five areas with high potential for steel-making coal and thermal coal for electricity and industry.

“The coal industry supports 36,000 jobs across the state and this is an investment in future projects and jobs,” Dr Lynham said.

“Exploration is the lifeblood of the resources sector, and the thousands of jobs and business opportunities it provides, particularly in regional Queensland. “

Assistant State Development Minister and Member for Mackay Julieanne Gilbert welcomed the fresh opportunities for the region and the resources sector.

“Exploration is essential to the next generation of resources projects in our region and to our world class mining engineering and technology sector,” she said.

“This is all about generating jobs and business opportunities for our friends and family – particularly our young people – into the future.”

“The Palaszczuk Government is supporting 2100 jobs in the current financial year in the Mackay Whitsunday region with more than $615 million invested in local infrastructure over the next four years.”

Map showing exploration area.  Image Supplied 

Dr Lynham said Queensland’s metallurgical and pulverised coal injection (PCI) coals were essential ingredients in manufacturing steel.

“That’s steel for building homes, and to manufacture the vast structures of wind turbines and components for the burgeoning electric vehicles industry for the renewables sector,” he said.

“The world needs our metallurgical coal as part of the transition to renewables.”

Dr Lynham said the new blocks also had access to the Bowen Basins world-class existing rail and port infrastructure at Hay Point and Gladstone to get the coal from pit to port cheaper and faster.

The five areas made up of 147 sub-blocks are:

  • one 60 km2 area north-east of Moranbah with potential for metallurgical coal
  • three areas of six km2 each east of Blackwater providing opportunities for thermal coal and/or pulverised coal injection (PCI) coal used in steel manufacturing
  • one 380 km2 area south-east of Emerald with potential for thermal coal.

The bidding companies have to offer cash with their bid.

The preferred tenderers must also meet environmental, native title, and other approvals, as well as land access requirements before on-ground exploration can start.

Tenders open Friday and close on 10 October.