In 2018, ACIL Allen was engaged by the Australian Petroleum Production and Exploration Association (APPEA) to undertake a preliminary assessment of the economic potential of successful petroleum exploration and production in the Great Australian Bight.

In that report, successful oil exploration in the Great Australian Bight was forecast to generate more than 2,000 jobs in South Australia and generate over $7 billion in average annual tax revenue to Federal and State governments, over the next four decades.

The indirect benefits of the activity and the associated tax revenue could see almost 5,000 jobs created across Australia in the period between 2020 and 2060.

The study examined two possible production scenarios from the exploration permit areas which were granted by the Australian Government:

• a ‘base’ case production scenario of 1.9 billion barrels of oil equivalent liquids, as was estimated by Wood McKenzie in 2015;
• a ‘high’ case production scenario of 6 billion barrels, a resource potentially equivalent to Bass Strait.

 

The base case development could potentially see the creation of 1,361 jobs in South Australia during the development and construction phase, along with an average of 826 jobs per year over the next 40 years. If resources in the Bight did prove comparable to Bass Strait, that number would rise to 2,116 South Australian jobs during construction and an average 1,521 jobs per year over the next 40 years.

If the ‘base’ scenario was to occur, then the report forecasts that during peak production periods, oil from the development would be South Australia’s largest export and be larger in value terms than the State’s top five exports combined in 2016-17.

If the ‘high’ case scenario was to take place then the report found that the average annual output of $18.4 billion per annum would increase the size of the mining and resources industry five-fold, making it South Australia’s largest industry.

This would mean that oil from the development would become South Australia’s ‘most valuable export’ and would be 25 per cent larger than total exports from the State in 2016-17.

However, a new report has just been released by the Australia Institute which states that any potential benefits of oil and gas production in the Great Australian Bight must be weighed against the risks to other industries from a potential oil spill.

The report indicates that more than 27,000 jobs in South Australia, Victoria and Tasmania could be put at risk if drilling for oil in the Great Australian Bight is allowed to go ahead and a catastrophic spill occurs.

Industries that could be impacted by a spill during exploratory drilling or later production include tourism on the regional coastal areas, aquaculture and wild fisheries.

What does the nation think?

In March 2019, the Australia Institute surveyed a nationally representative sample of 1,536 Australians, and 624 South Australians on drilling in the Great Australian Bight.

Nationwide, the rate of opposition to drilling was 60 per cent. Interestingly, in South Australia, the rate was higher at 68 per cent.

Subsequently, in July 2019, the Australia Institute undertook further representative national polling (1,464 respondents), this time asking what effect Australians thought drilling for oil would have on four socioeconomic and environmental issues: jobs, fishing, tourism and the natural environment.

While many respondents think that companies drilling in the Great Australian Bight will have a positive effect on jobs (57 per cent), most also think the effect of drilling on fishing, tourism and the natural environment will be negative.

Three in five Australians surveyed (60 per cent) think drilling in the Great Australian Bight will have a negative effect on fishing.

One in two Australians surveyed (50 per cent) believe drilling will have a negative effect on tourism.

Two in three respondents (65 per cent) think drilling will have a negative effect on the natural environment.

 

The APPEA-commissioned ‘Petroleum Development in the Great Australian Bight‘ report can be accessed here, and a fact sheet can be found here.

While ‘Oil in the Great Australian Bight Comparative report on employment potential’ by the Australia Institute can be found here.