Securing access to affordable, reliable and clean energy is a challenge Australia and the US share.
WHEN I visited the US earlier this year, I sensed the growing interest in Australia’s resources among business and political leaders.
With 30 or more nuclear power stations planned for the US, there was great interest in Australian uranium.
And while we don’t expect the US to be a major buyer of Australian gas, there is huge potential for American investors in our LNG industry.
The American share of the Gorgon gas project alone represents an investment of $30 billion; and there are potentially further significant LNG projects on the horizon.
Australian LNG was a $10 billion export industry in 2008-09.
If the Ichthys, Browse, Sunrise, Prelude, Wheatstone, Gladstone LNG and expanded Pluto projects proceed by the middle of the coming decade, exports could be in the order of $50 billion by 2015-2016.
That is a 400 per cent increase in just the next five years.
As a cleaner-burning alternative to coal, LNG has a key role in our region’s transition to a low-emissions economy.
Australia aims to be the world’s second-largest exporter of LNG behind Qatar.
Last month in Beijing, I attended the biggest company-to-company LNG contract signing in Australia’s history.
Under this agreement, at least $10 billion will be invested in Queensland’s coal seam gas industry.
China will receive 70 million tonnes of LNG, making Australia a pioneer in LNG exports from coal seam gas.
To give you some idea of the potential, there is enough coal seam gas in Queensland to power the whole state for 1,000 years.
Australia recognises the important role it plays in our region as a valued and trusted supplier of resources and energy.
We are already the world’s biggest exporter of coal and iron ore, and the second biggest exporter of uranium.
A growing and stable Asia-Pacific region, where countries have access to energy and resources through commerce, enables a focus on growth.
This regional stability is important to Australia and the US alike.
Energy in Aust. 2010
The latest analysis of Australia’s energy production, that I am pleased to launch today, highlights Australia’s abundant energy resources.
Energy in Australia 2010 shows growth in Australia’s energy production has been accelerating for some time.
The value of Australia’s energy exports has increased throughout the past two decades at an average annual rate of 10 per cent.
And in just the five years to 2008-09, the value of Australia’s energy exports increased by 232 per cent.
Australia now exports more than three-quarters of the energy products we produce.
The report also shows:
• energy exports accounted for 33 per cent of Australia’s total exports of goods and services in 2008-09;
• Australia’s known energy resources are expected to last for many more decades with the proportion of economic demonstrated reserves to current production estimated at 490 years for brown coal, 90 years for black coal, 140 years for uranium, 63 years for conventional gas, and 100 years for coal seam methane;
• Australia accounts for around one-third of world black coal trade and that coal is Australia’s largest energy export earner ($55bn in 2008-09), followed by LNG and crude oil; and,
• Australia’s identified conventional gas resources have increased threefold over 20 years.
These findings lend extra weight to our objective of becoming the region’s premier energy supplier.
We are already the world’s ninth largest energy producer.
Given our large energy resources base – Australia is well positioned to continue to supply a significant proportion of the world’s energy needs, while maintaining domestic energy supply.
But my focus looks beyond exports.
Growing demand from our regional neighbours presents great opportunities, however it also presents us with significant skills and infrastructure challenges at home.
Australia cannot afford to let productivity slip, or for skills gaps to open up.
Demand for skilled labour is potentially a significant constraint on economic activity.
It is exceptionally important that we have a sufficiently mobile labour force and skilled immigration to satisfy the demands of the growing resources sector.
If we fail on this front we will see effects such as pressure on wages in the resources sector, but also in other areas such as the service industry, tourism, hospitality and even in agriculture.
Skills are critical for Australia to be the region’s premier supplier of resources.
And they are equally critical to investors.
So the Australian government has set up the National Resources Sector Employment Taskforce.
The taskforce recently released a discussion paper as the first step in helping us develop a plan to address labour and skills issues.
To those investing in Australia’s resources, I also invite you to show leadership in improving skills within our indigenous communities.
Last month, I was very pleased to launch a $4.5 million trade-training centre in Darwin.
This came about through cooperation between the Larrakia people and the Ichthys LNG project’s joint venture partners – Inpex and Total.
The skills indigenous workers learn – in electronics, metalwork and so on – will empower them to benefit from the jobs and business opportunities in the resources sector.
By doing so, they will make a real difference to their communities by providing a stronger economic future.
Having a job – meaningful employment – is a critically important component in taking charge of one’s destiny.
We are making progress.
Nationally, we have driven reforms through training and employment programs to improve the employment participation of Indigenous people and help build the skills they need.
My own department spends $500,000 each year on the Working in Partnerships Program, which allows the mining sector to discuss directly with traditional owners and indigenous communities, how best to address enterprise development and how to maximise indigenous employment.
The Minerals Council of Australia estimates that about two-thirds of Australian mining operations have indigenous neighbours.
The minerals sector is already the largest private-sector employer of Indigenous people – 5 per cent of its direct workforce.
As an emerging energy superpower, we also have infrastructure challenges to resolve.
Australia’s next generation of prosperity must be different to the last.
As global growth returns it is crucial that Australia’s resources sector increases production.
We need the right infrastructure to get our resources to our ports.
This article is an edited extract from Resources and Energy Minister Martin Ferguson’s speech last week to an American Chamber of Commerce function in Sydney, where he launched the ‘Energy in Australia 2010’ report.