The development of a shale gas industry in Australia's Northern Territory could drive significant long-term economic growth, creating thousands of new jobs and generating almost AU$1 billion of government revenue, a new study has found.
The study, release Aug. 26, was commissioned by the Australian Petroleum Production & Exploration Association (APPEA) and produced by Deloitte Access Economics (DAE). It's the first comprehensive assessment of how a new shale gas industry could benefit the Northern Territory’s economy.
It examined two potential growth scenarios based on the supply of shale and tight natural gas to the Northern Territory, east coast and export markets between 2020 and 2040.
DAE found that, under the highest growth scenario examined, the cumulative increase in gross state product could reach AU$22.4 billion in net present value (NPV) terms.
The same growth scenario would result in a long-term employment boost of 6300 full-time positions in the state and a cumulative increase in state government revenues of $961 million NPV.
Malcolm Roberts, APPEA’s chief executive, said the report confirms that shale gas has the potential to generate significant long-term economic benefits for the Northern Territory.
“The Territory economy is already outperforming much of the nation thanks to the development of the Ichthys LNG project in Darwin and investment in other natural gas projects,” 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.
“Shale gas could become the industry that reinvigorates regional centers such as Alice Springs and Katherine and provides new training and employment opportunities in Indigenous communities,” he continued. “It also could become a game-changer for future NT governments by delivering a new source of revenue to fund better services and develop infrastructure across the Territory.”
While the benefits could be significant, the successful development of a local shale gas industry cannot be taken for granted,” Roberts said.
The recent collapse in the international oil price had put all gas developments in Australia, and around the world, under pressure. Proponents and governments must now work harder to reduce costs and attract new investment, according to APPEA.
“The NT must provide a stable, secure and competitive investment framework if it wants to turn its shale gas resources into jobs, royalties and exports,” Roberts said.
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