November 23, 2021
EY report reveals scale of Western Australia’s future gas growth
Western Australia is the country’s largest gas-producing and consuming region, and the gas industry is an important contributor to the state economy.
Over the last decade, the gas industry has added $220 billion to the Western Australian economy.
A new report from EY, commissioned by APPEA, has confirmed that gas is set to remain a vital part of the WA economy over the next two decades, with figures outlining the enormous potential for the state’s gas market to 2040.
The report found in its high-growth scenario that economic activity could be as much as $35 billion higher in 2027 than 2020 levels, equivalent to around 12% of the current state economy.
Likewise, in the longer term to 2040, EY estimated that unleashing the full potential of the WA oil and gas industry could see an extra $90 billion in new investment, adding around $440 billion in gross state product (GSP) and $115 billion in tax revenue.
That’s roughly equivalent to the gains from hosting the AFL Grand Final in Perth every day of the year for the next 20 years.
High demand for cleaner energy in Asia – as countries look to switch from coal to gas to reduce emissions – will maintain an ongoing need for WA gas exports.
EY has also predicted a boost for industry jobs, stating that since its high-growth scenario reflects a heightened demand for construction of new projects in the near term, the number of new industry workers generated could peak at around 9,700 by 2027, and around 8,300 full-time equivalent staff by 2040.
Which is not to downplay EY’s low-growth scenario either; even using more conservative inputs based on existing projects and those projects with a high level of investor commitment, EY estimated that the industry could generate an additional $236.6 billion in GSP and $57 billion in taxes, in addition to around 3,500 new FTE employees by 2040.
EY’s more conservative estimates also found that even in the near term, economic activity will be more than $16 billion higher in 2025 than 2020, with around 7,100 new workers to be hired at the peak of activity in 2027.
Following on from the similarly positive results of EY’s September report on the future of the Queensland gas industry, this latest report provides further proof that the natural gas industry is set to remain a staple of the WA and wider Australian economy for the foreseeable future.