Successful oil exploration in the Great Australian Bight could see the creation of more than 2000 jobs in South Australia and generate more than $7 billion in average annual tax revenue over the next four decades, according to a new study, although drilling opponents say the risks are too great.
Commissioned by the Australian Petroleum Production and Exploration Association (APPEA) and produced by ACIL Allen Consulting, the study provides a preliminary assessment of how oil exploration and development offshore in South Australia could benefit the state and national economies, with the potential for 5000 jobs nationwide between 2020 and 2060.
The study examined two possible production scenarios from the exploration permit areas granted by the federal government, a ‘base’ cause production scenario of 1.9 billion barrels of oil equivalent liquids and a ‘high’ case production scenario of six billion barrels, a resource potentially equivalent to Bass Strait.
The base case could see the creation of 1361 South Australian jobs during development and construction, and an average 826 jobs per year over the next 40 years.
In the event that resources in the Bight proved comparable to Bass Strait that number would rise to 2116 state jobs during construction and an average of 1521 jobs per year over the next 40 years.
Federal and state tax payments were projected to be up to $70.6 billion over the 40-year study period in the base case, rising to $314.6 billion if development were as big as Bass Strait.
APPEA’s director of external affairs Matthew Dorman said the report confirmed that Great Australian Bight exploration activity had the potential to generate significant long-term economic benefits for the state.
“While still in its very early stages, successful petroleum exploration and development in the Bight could bring a new wave of much-needed private sector investment in South Australia, delivering jobs, economic opportunities and regional development for decades to come,” Mr Doman said.
“The benefits of this activity would also be widely spread, including in key regional centres such as Port Lincoln and Ceduna, where onshore facilities and services were likely to be based.”
Director of Wilderness Society South Australia Peter Owen said the mining industry had a long tradition of making fantastic claims about the benefits of their projects.
“There are a lot of ‘coulds’ in APPEA’s report which it admits relies on many assumptions, one including a scenario based on oil production from a completely different region in far shallower waters,” he said.
“Any assertions about tax revenue from offshore oil and gas need to be examined very closely, because the industry has racked up so much money in credits for petroleum resource rent tax that the government gets very little revenue.”
Mr Owen said the risks were just too big.
“The oil and gas industry can talk about imaginary numbers all it wants but they are dwarfed by South Australia’s $442 million fishing industry and its tourism industries in coastal regions, worth more than $1 billion,” he said.
“The two industries employ more than 10,000 full-time positions, and both industries would be devastated by an oil spill.”
Mr Dorman said with proper regulatory oversight there could be a safe and sustainable offshore petroleum industry as in other states.