Energy productivity, gas consumption and employment: trends in the Australian economy 2008-09 to 2018-19

Hugh Saddler
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Hugh Saddler: Crawford School of Public Policy, Australian National University

CCEP Working Papers from Centre for Climate & Energy Policy, Crawford School of Public Policy, The Australian National University

Abstract: This paper uses the most recent update of Australian Energy Statistics to examine two separate though related questions. First, how is Australia’s National Energy Productivity Plan, launched in 2015, progressing? It finds that primary energy productivity has increased, but the increase is almost entirely attributable to the shift from fossil fuel to renewable generation of electricity, meaning that final energy productivity has been almost static. However, factorisation analysis shows that lack of progress in final energy productivity is mostly caused by recent rapid growth in the very energy intensive production for export of large volumes of LNG. Modest but non-negligible energy productivity improvements have been achieved in most other sectors of the economy. The second question is whether, as the government proposes, increased supply and consumption of gas will boost employment and revive the economy. The paper concludes that it will not, because almost all employment is found and almost all GDP is created in sectors of the economy which use relatively very little gas. Three sectors of manufacturing use about two thirds of total commercial gas consumption in Australia (excluding electricity generation and the LNG industry), but employ less than 2 per cent of the workforce and contribute about 3 per cent of GDP. In fact, most of this two thirds is used at just fourteen large industrial sites spread across Australia.

Date: 2020-11
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