How will Australia ensure that its rapidly expanding LNG sector grows sustainably and benefits the whole economy in the years to come? With no time to waste, the question becomes, what is needed to galvanise stakeholders to the dangers of conducting yet more reviews and relying on a naturally-rich resource base to take care of itself while real action is avoided?
The stakes are high: without intervention, Australia will lose out to international competitors and compromise not just new major LNG developments but the development of an efficient, secure and sustainable domestic energy sector, which impacts the entire economy.
At Accenture, we believe long-term, sustainable resource development of LNG is a key priority for Australia. In our report Energy critical: A sustainable growth strategy for Australian gas, created in partnership with The Australian Financial Review, Accenture recommends five interventions needed for Australia to make decisive and comprehensive progress in streamlining and improving LNG development.
An impending increase in LNG production means that by 2020, Australia will become one of the two largest gas producers in the world. The facts are clear – rapid growth is already underway and a series of major projects will reach full production in the next few years.
Recent analysis reveals Australia’s status as a producer is not reflected in other key areas of high performing energy sectors globally. Australia was ranked 26th in the 2014 Global Energy Architecture Performance Index, published by the World Economic Forum (WEF) and Accenture, in delivering an effective and balanced energy system.
The entire Australian energy sector – including mining, oil and gas, and utilities - now faces a looming set of macro and micro opportunities and challenges. There has already been a marked decline of investment in listed energy entities in recent years. Lengthy and uncertain processes for capital project approvals have caused significant delays of capital-related investments.
The importance of getting LNG right – particularly given its impact right across Australia’s economy - is well understood in the wider business community. In February 2014, the Financial Review Business Leaders Panel (FRBLP) was surveyed and asked to focus on energy issues for Australia and particularly the forecast future gas boom.
Survey respondents identified the following as the most pressing issues for the Australian gas sector to resolve:
At Accenture we think there is a clear imperative to take immediate and active steps in a new direction. This point of view is supported by the analysis and research in the business community we have conducted with the Australian Financial Review. Stakeholders in the sector no longer face a question of whether change is needed, but how and when this fundamental transformation must happen.
In our report, we recommend the following interventions:
This research is released in partnership with Accenture Strategy and The Financial Review Group, and is the first in a series of reports examining future trends for key industries in Australia.
The 2014 survey panel comprised 103 business executives from organisations across Australia. Respondents were asked for their feedback on challenges and opportunities in the Australian gas sector and recommendations for how to resolve issues faced by the energy industry.
Managing Director – Accenture Strategy, Australia & New Zealand
Managing Director – Accenture Resources, Australia & New Zealand
Senior Manager – Accenture Resources, Australia & New Zealand