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Regional development
Shale gas is in its infancy in Australia, but evidence from Queensland’s Surat Basin shows how building an onshore gas industry can enhance regional development.
By bringing infrastructure and investment to several rural and regional districts, the oil and gas industry is generating new jobs and strengthening and diversifying regional economies.
A 2013 KPMG study shows that resources developments are not only making regions more prosperous, but also making their communities more stable and socially sustainable.
The study compiles key standard-of-living measures and basic demographic profiles of Australia’s nine main resources regions. It was undertaken for APPEA and the Minerals Council of Australia.
It is clear that resources developments are driving these regions’ economies. KPMG found that in the five years to 2011, the number of people employed in the resources sector across the sampled regions grew by 13,810 – or 50%. The number employed in all industries – including resources – grew by just 14%.
In that same period, the population of Australia’s resources regions had grown at 1.5% per year. This was the same as the national average but greater than the 0.8% for regional Australia more generally.
This shows that while some employees are flying in and flying out, others are relocating to the resources regions.
The Surat Basin, Queensland
Queensland’s Surat Basin is the region with the most onshore gas industry activity.
In the Surat between 2006 and 2011:
- the population increased by 3.2%
- the total number of dwellings increased by 8%
- students finishing Year 12 increased by 4.3%
- residents with tertiary degrees increased by 2%.
The Surat Basin stretches just under 500km east to west and is located south of the Bowen Basin. The major township of Toowoomba is located approximately 100km west of Brisbane. The economic base in the Surat Basin is quite diverse and includes a growing coal seam gas sector.
| Demographic indicator | 2011 | Percentage point change from 2006 |
|---|---|---|
| Total population | 200,750 | 3.2% |
| Total occupied private dwellings | 70,495 | 8.0% |
| Working age population (15-64) | 63% | -0.9 |
| Male | 49% | 0.1 |
| Indigenous | 4% | 0.5 |
| Australian born | 90% | – 1.5 |
| Average household size | 2.52 | -0.04 |
| Year 12 | 43% | 4.3 |
| High income | 4% | 2.1 |
| Couple family with children | 31% | – 1.4 |
| Separate dwelling | 87% | 0.4 |
| Own their home | 67% | – 1.9 |
| Bachelor degree or higher | 14% | 2.0 |
| Unemployment Rate | 4.0% | 0.1 |
| Participation Rate | 62% | – 0.2 |
| Same address five years ago | 46% | 3.3 |
| Largest industry of employment | Health Care & Social Assistance | Retail Trade |
Despite the rise in population, the unemployment rate remained stable at about 4% – well below the Australian and Queensland averages.
The number of residents at the same address that they were living in five years previously increased by 3.3%. So despite an influx of new workers, there are strong indications that locals no longer have to leave the region to find work.
In addition, in the last five years the retail trade sector has overtaken healthcare and social assistance as the region’s largest industry of employment. This rebuts claims that money being made in the region is not being spent there.
Unemployment rate remains low
In January 2017, Toowoomba’s unemployment rate was 4.9%, while the Darling Downs/Maranoa region was 3.6%. The Queensland and national rates were 5.7%.
These figures indicate that the resources sector – which in this case is mostly the gas industry – has made the Surat region more prosperous, stable and economically sustainable.
Shale gas and regional development
A study of the Eagle Ford shale project in South Texas by the University of Texas reported that in 2010 alone, the project added US$1.3 billion to the gross state product, supported 12,600 jobs and added US$2.9 billion in total economic output.
These jobs are not just gas-related. Many local businesses including restaurants, hotels, supermarkets and other commercial activities are booming.
It is too soon to predict the scale of shale gas development in Australia. But US shale operations and Queensland coal seam gas operations indicate that a successful Australian shale gas industry would employ several thousand people in construction, operations, infrastructure and service jobs.
The availability of additional natural gas could also generate thousands more jobs in new industrial, power generation and business activities.
Onshore gas production also generates state royalties – so many of the long-term benefits of new gas production would remain in the state where the gas is produced.